Equities Research Analysts’ Ratings Reiterations for May, 30th (ANN, AVGO, BSX, C, CBS, CBSH, CMCSA, CPB, CY, DVN)
Ann (NYSE:ANN) had its buy rating reiterated by analysts at Janney Montgomery Scott.
Avago Technologies (NASDAQ:AVGO) had its outperform rating reiterated by analysts at Zacks. The firm currently has a $85.00 price target on the stock. Zacks’ analyst wrote, “We are initiating our coverage on Avago with an Outperform recommendation as we anticipate the stock to perform well above the broader market. Avago reported strong second-quarter fiscal 2014 results with adjusted earnings well exceeding the Zacks Consensus Estimate. Avago is one of the leading players in the analog semiconductor market with a wide array of products and a well-diversified customer base. Avago expects to further strengthen its position through organic growth across the industry verticals and increased market penetration buoyed by the LSI acquisition. In addition to cost synergies from a combined resource pool, the acquisition is likely to improve the operating margin and create greater scale to further drive innovation. However, operating risks regarding high R&D costs for technology-driven products could weigh on the margins moving forward. “
Boston Scientific (NYSE:BSX) had its neutral rating reissued by analysts at Zacks. The firm currently has a $14.00 price target on the stock.
Citigroup (NYSE:C) had its neutral rating reissued by analysts at Zacks. They currently have a $50.00 target price on the stock. Zacks’ analyst wrote, “Following a disappointing second-half 2013, Citigroup reported impressive first-quarter 2014 results. Driven by prudent expense management, earnings outpaced the Zacks Consensus Estimate as well as the prior-year period earnings. Though fall in revenues was recorded, on the whole, its profit level outpaced expectations. We believe the company’s global footprint and attractive core business are impressive. Yet, a low interest-rate environment and regulatory issues along with litigation risks remain headwinds. Further, the 2014 capital plan rejection is a matter of concern. Considering the tepid economic recovery and expected slump in trading revenues, we believe that robust top-line expansion will remain elusive in the near term. “
CBS (NYSE:CBS) had its neutral rating reaffirmed by analysts at Zacks. Zacks currently has a $63.00 target price on the stock. Zacks’ analyst wrote, “Driven by aggressive share repurchase and higher operating income, CBS Corp. posted better-than-expected first quarter fiscal 2014 earnings. However, shift of Super Bowl broadcast marred its quarterly revenues, which fell short of the Zacks Consensus Estimate and declined 4.6% year over year. Going ahead, CBS Corp. hinted at stronger second half driven by increases in political spending, rising retransmission fees and more syndication deals. But at the same time, the company expects programming costs to rise in the second half due to new agreement with the NFL along with the addition of a Thursday night NFL game. Given the pros and cons, we reiterate our Neutral recommendation on the stock. “
Commerce Bancshares (NASDAQ:CBSH) had its neutral rating reiterated by analysts at Zacks. They currently have a $46.00 price target on the stock. Zacks’ analyst wrote, “Commerce Bancshares’ first-quarter 2014 earnings marginally lagged the Zacks Consensus Estimate. While higher operating expense as well as provision for loan losses was the headwind of the quarter, the negative impact of the same was partially offset by improved revenues. Moreover, growth in loans and deposits, healthy capital and profitability ratios were the positives. Credit quality was a mixed bag. We believe the company is well positioned to enhance capital deployment activities as well as pursue both organic and inorganic growth backed by a sound capital base and solid liquidity level. However, a still low interest rate environment, mounting expenses, sluggish economic recovery and stringent regulatory requirements will likely mar the company’s financials in the near term.”
Comcast (NASDAQ:CMCSA) had its neutral rating reissued by analysts at Zacks. Zacks currently has a $55.00 target price on the stock. Zacks’ analyst wrote, “Comcast reported strong financial results for the first quarter of 2014 wherein both its top and bottom line surpassed the Zacks Consensus Estimate. The company’s Cable business continues to perform well and the NBC Universal segment is also witnessing improvement. Moreover, extension of Olympic telecast rights coupled with launch of innovative services has resulted in video subscriber additions, after a gap of 26 quarters. In addition, the company is planning to acquire rival Time Warner Cable which is expected to strengthen its foothold in the U.S. pay-TV market. However, the U.S. pay-TV market is nearing a saturation level. Moreover, stiff competition from large carriers and other low-cost video streaming companies coupled with mounting programming costs and debt levels may act as headwinds for the company moving ahead. We, thus maintain our Neutral rating on Comcast.”
Campbell Soup Company (NYSE:CPB) had its neutral rating reiterated by analysts at Zacks. Zacks currently has a $47.00 price target on the stock. Zacks’ analyst wrote, “Despite a soft start in February due to unfavorable weather conditions, Campbell Soup managed to report better-than-expected bottom-line results for the third quarter of fiscal 2014, facilitated by its brand expansion and cost containment strategies. Campbell’s focus on augmenting the North American soup and simple meal business and expanding overseas operations bode well for future growth. We believe that the company’s prudent investment and strategic initiatives toward product innovation and brand building will increase its customer base and profitability. However, we prefer to be on the sidelines because of the rising commodity costs, intense competition and exposure to foreign currency fluctuations, which may undermine the company’s operating performance. Therefore, we maintain our long-term Neutral recommendation on the stock.”
Cypress Semiconductor (NYSE:CY) had its outperform rating reissued by analysts at Zacks. Zacks currently has a $12.00 target price on the stock. Zacks’ analyst wrote, “Cypress develops and manufactures a broad range of digital and mixed signal ICs. The company’s first-quarter loss was lower than the Zacks Consensus estimate driven by solid expense management. Also, management provided a strong forward guidance, indicating robust demand. Though a weak and uncertain macro environment and increased pricing pressure remain concerns, we are encouraged about the company’s advanced technology, momentum in new products, recent design and customer wins and growth initiatives. We therefore have an Outperform recommendation on Cypress shares”
Devon Energy Corp (NYSE:DVN) had its neutral rating reissued by analysts at Zacks. The firm currently has a $78.00 target price on the stock. Zacks’ analyst wrote, “Devon Energy’s earnings per share in first-quarter were higher than the Zacks Consensus Estimate, thanks to strong oil production and better realized prices of the product sold. Devon is working on its strategy to divest non-core assets in the U.S. and Canada and focus on the reserve rich onshore U.S. assets. Devon divested its conventional gas assets in Canada and will utilize net proceeds of $2.7 billion to pay down outstanding debts incurred for acquiring Eagle Ford assets. Devon decided to strengthen its operation in Eagle Ford. In addition, the acquisition of acreage in Cana-Woodford will further boost its liquid production going forward. Formation of the new midstream MLP business with Crosstex will benefit the company given the increasing oil and gas drilling activities in the U.S. However, the cyclical demand for oil, natural gas and NGL, along with volatility in prices, could weigh on its profitability. We retain our Neutral recommendation.”
Dycom Industries (NYSE:DY) had its underperform rating reiterated by analysts at Zacks. The firm currently has a $27.00 target price on the stock. Zacks’ analyst wrote, “We are reaffirming our Underperform recommendation on Dycom Industries with a target price of $27. This specialty contracting firm reported modest third-quarter 2014 results. The company has been benefiting from growing demand for high-speed mobile Internet and 4G/LTE services, along with increasing investments in the fiber industry. However, the company was impacted by lower sales and profit in the wake of a harsher winter since the latter half of the second quarter of 2014. Severe snowfall and exceptionally cold temperatures resulted in lower number of available workdays for most of this quarter as well which had an unfavorable impact on productivity and margins of the company.”
FirstEnergy Corp. (NYSE:FE) had its neutral rating reissued by analysts at Zacks. The firm currently has a $35.00 target price on the stock. Zacks’ analyst wrote, “FirstEnergy Corp. posted unfavorable financial results in the first quarter of 2014 with top and bottom line lagging the Zacks Consensus Estimates. The competitive market challenges offset the positive impact of favorable distribution and transmission returns. FirstEnergy’s expansion of its regulated asset base and steady progress in its large-scale transmission program will help it in the long run. In addition, strong cash flow and healthy liquidity position will support the company’s strategic regulated investments. However, strict government regulations and climate-induced sales variation could act as headwinds. We retain our Neutral recommendation on the stock.”
Hanesbrands (NYSE:HBI) had its outperform rating reaffirmed by analysts at Zacks. Zacks currently has a $101.00 price target on the stock. Zacks’ analyst wrote, “We maintain our Outperform rating on Hanesbrands following its remarkable first-quarter fiscal 2014 results and raised outlook for the year. Earnings per share of $0.76 beat the year-ago results and the Zacks Consensus Estimate by 49% and 31%, respectively. Profit was driven by higher margins backed by the increased supply chain operating efficiencies, lower selling, general and administrative costs, and successful integration of the Maidenform Brands. Although sales slightly missed the Zacks Consensus Estimate, it surpassed year-ago results by 12%. The company is also benefiting from favorable pricing and successful implementation of the “Innovate to Elevate” strategy. Under this strategy, the company focuses on high-priced, high-margin products that can be supplied at lower costs. Overall, we are impressed with the company’s strong brand portfolio and its continuous innovations. Moreover, it is gaining shelf space at major retail stores through deals with retail giants. “
Hewlett-Packard Company (NYSE:HPQ) had its buy rating reaffirmed by analysts at Citigroup Inc.. The firm currently has a $40.00 target price on the stock. The analysts wrote, “enormity” of the company’s supply chain efforts. Every minute, Hewlett-Packard ships 105 personal computers, 88 printers and 880 ink & toner cartridges. In his second takeaway, the analyst emphasized the company’s streamlined enhancements leading to lower inventory and strong cash flow. Adding onto this point, he included the financial impact of the enhancements on EPS in his third point. Suva wrote, “The financial impact of these efforts is impressive with a positive EPS impact of $0.04-$0.07 for PCs and $0.07-$0.11 for Printers for FY14.” In Citi’s concluding takeaway, Suva focused on the discrepancy of printing inventory. In the call, Simonnet said printing inventory is at “all-time low levels.” In the recent conference call on May 24, though, the CFO and CEO of Hewlett-Packard reported elevated printing inventory is due to soft EMEA demand. Suva concluded, “We see meaningful upside to share price given 1) cost savings are underappreciated, particularly after the announcement on additional headcount cuts, 2) upside to free cash flow estimates, 3) low downside risk to revenue and margin expectations for FY14-15, and 4) valuation is compelling at 8-9x reflecting negative sentiment with less than 45% Buy ratings.”
j2 Global (NASDAQ:JCOM) had its outperform rating reissued by analysts at Zacks. Zacks currently has a $57.00 price target on the stock. Zacks’ analyst wrote, “j2 Global reported first-quarter 2014 financial results wherein the bottom line significantly surpassed the Zacks Consensus Estimate while the top line was in line with the same. Record revenue growth, low churn rate, high EBITDA and free cash flow are likely to act as tailwinds going forward. The improved performance can primarily be attributed to the company’s diversification into cloud business, installation of a media business and initiation of the intellectual property program. j2 Global provided a strong financial outlook for 2014. We believe that the company’s strong financial position will allow it to pursue acquisitions and its diversified pipeline will help foster growth. Hence, we maintain our Outperform recommendation on j2 Global.”
L Brands (NYSE:LB) had its neutral rating reaffirmed by analysts at Zacks. They currently have a $60.00 target price on the stock.
The Medicines Company (NASDAQ:MDCO) had its neutral rating reaffirmed by analysts at Zacks. They currently have a $29.00 target price on the stock. Zacks’ analyst wrote, “The Medicines Co.’s first quarter EPS of $0.22 was below the year-ago EPS of $0.24 but better than the Zacks Consensus Estimate of a loss of $0.13 per share. Revenues rose 13.8% to $177.2 million, missing the Zacks Consensus Estimate of $179 million. Although Angiomax should continue growing, we remain concerned about the earlier-than-expected entry of generics. Meanwhile, we are encouraged to see that management is actively pursuing in-licensing deals and acquisitions to drive long-term growth. We are pleased with the company’s co-promotion deal with AstraZeneca. The Recothrom, ProFibrix and Incline deals also look good to us. The Tenaxis acquisition indicates the company’s efforts to diversify its portfolio and reduce its dependence on Angiomax. We remain Neutral on the stock.”
M&T Bank Co. (NYSE:MTB) had its neutral rating reissued by analysts at Zacks. The firm currently has a $127.00 price target on the stock. Zacks’ analyst wrote, “M&T Bank’s first-quarter 2014 operating earnings outpaced the Zacks Consensus Estimate. However, this compared unfavorably with the prior-year quarter earnings. Improvement in credit metrics and strong capital ratios were the positives for the quarter. However, higher expenses and lower revenues were the headwinds. We believe the company with a solid business model, sturdy capital position and strategic acquisitions, is well poised for future growth. While the sluggish economic recovery, regulatory issues and low interest rate environment remain headwinds, growth in core deposits will benefit it in the long run. “
MWI Veterinary Supply (NASDAQ:MWIV) had its neutral rating reiterated by analysts at Zacks. The firm currently has a $146.00 target price on the stock. Zacks’ analyst wrote, “MWI Vet recorded EPS of $1.32 in the second quarter of fiscal 2014. While EPS surpassed the year-ago number by 10.9%, it missed the Zacks Consensus Estimate by 2.9%. However, revenues surged 28.1% to $721.3 million, exceeding the Zacks Consensus Estimate of $714 million. Despite severe weather conditions, the company posted healthy growth in the quarter. Considering the positive momentum over the past few quarters, the company has reaffirmed its strong guidance for fiscal 2014. Notably, MWI Vet has the strength to deliver consistent growth performance amid a low-growth environment. Moreover, its strategy of selective acquisition should keep the momentum going over the long haul. However, vendor dependency is a cause of concern. Currency headwinds also remain an overhang. Further, a tough competitive landscape, and macroeconomic uncertainty keep us on the sidelines. Accordingly, we remain Neutral on the stock.”
NiSource (NYSE:NI) had its neutral rating reiterated by analysts at Zacks. They currently have a $39.00 target price on the stock.
OmniVision Technologies (NASDAQ:OVTI) had its outperform rating reissued by analysts at Zacks. They currently have a $24.00 price target on the stock. Zacks’ analyst wrote, “OmniVision is an OEM of CMOS image sensors and support circuitry used within handsets, notebooks and other mass markets. Its fourth-quarter earnings beat the Zacks Consensus by a penny and guidance was also encouraging. The company has a strong position in the handset market and is also expanding into other areas. We like its product roadmap, growth prospects, mix shift to higher-resolution sensors, strengthening position in the fast-growing Chinese market and management execution and believe that it will be able to deal with the short product life cycles, increased competition, North America challenges and price pressures. We are therefore maintaining Outperform rating on OmniVision shares.”
Pall Corp. (NYSE:PLL) had its neutral rating reaffirmed by analysts at Zacks. The firm currently has a $90.00 target price on the stock. Zacks’ analyst wrote, “Pall Corporation is a leading manufacturer and marketer of filtration, separation and purification products. We are reaffirming our Neutral recommendation on Pall with a target price of $90.00. Pall had a decent second quarter with year over year earnings growth of 9.5% and revenues growing 6.4% year over year. Despite economic headwinds in some of Pall’s industrial end markets, the company reported profits attributable primarily to improved operational execution and favorable impact of structural cost actions. The company is expected to have a positive fiscal 2014 driven by strong LifeSciences segment and recovering economic conditions and the strategic initiatives taken by the company including increased investments in R&D and innovation. However, currency volatility remains a headwind. “
QEP Resources (NYSE:QEP) had its neutral rating reaffirmed by analysts at Zacks. Zacks currently has a $34.00 target price on the stock. Zacks’ analyst wrote, “We are initiating coverage on QEP Resources with a Neutral recommendation and a target price of $34. With a diversified asset base, exposure to emerging plays, and quality acreage in multiple basins, this mid-cap onshore-focused E&P offers compelling value. Since its split from Questar Corp. in 2010, QEP has established a strong track record of production growth, while maintaining a competitive cost structure. The potential split of its midstream segment is expected to further enhance shareholder worth. However, the natural gas-heavy production mix currently clouds QEP’s value and is the main factor behind our cautious stance. This will remain a major headwind over the next few quarters, in our view, offsetting most of the positives. We are also concerned by the company’s high leverage.”
Everest Re Group (NYSE:RE) had its neutral rating reaffirmed by analysts at Zacks. The firm currently has a $168.00 target price on the stock. Zacks’ analyst wrote, “Everest Re Group Ltd. reported first-quarter 2014 operating earnings of $5.93 per share, which surpassed the Zacks Consensus Estimate by nearly 14% and improved from the year-ago earnings by 0.9%. Several strategic initiatives and significantly higher underwriting income boosted the results. Additionally, the company has a strong balance sheet profile, a seasoned management team and huge market share in the insurance and reinsurance industry. Everest Re is witnessing improving rates in its insurance lines of businesses. The company’s overseas business is also performing strongly and the trend is expected to continue in the future. Everest Re’s 10-year average combined ratio has remained below break-even levels leading to underwriting profitability. It has also been generating stable cash flows from operations. However, the company has exposure to catastrophes that lend volatility to its earnings. Also, declining net investment income due to low interest rate environment, and decreasing limited partnership income and low reinsurance rates remain primary concerns. Everest Re presently has a Neutral recommendation. “
Charles Schwab Corp (NASDAQ:SCHW) had its neutral rating reiterated by analysts at Zacks. Zacks currently has a $27.00 target price on the stock. Zacks’ analyst wrote, “Schwab’s first-quarter 2014 earnings marginally surpassed the Zacks Consensus Estimate. Results benefited mainly from a rise in revenues and prudent expense management, partly offset by lower benefit from provision. Higher total client assets and increase in new brokerage accounts were the other highlights for the quarter. Also, Schwab’s trading activities strengthened as indicated by growth in daily average trades. Moreover, synergies from acquisitions and a stable capital position will continue to boost the company’s financials going forward. However, we remain concerned about the sluggish economic recovery, elevated expenses and a still low interest rate environment.”
StanCorp Financial Group (NYSE:SFG) had its neutral rating reiterated by analysts at Zacks. They currently have a $63.00 price target on the stock. Zacks’ analyst wrote, “StanCorp Financial’s first quarter earnings per share missed the Zacks Consensus Estimate. Lower net investment income, higher operating expenses and lower Employee Benefits premiums limited the upside. Top line missed out estimate and deteriorated from the prior-year quarter. While pricing actions started bearing fruit, efficient expense management has lowered operating costs. The Employee Benefit ratio for seven straight quarters showed improvement. Though results at Asset Management slid in the first quarter, it was still in line with management expectation. Investment income also witnessed a decline due to lower yields at both fixed maturity securities and commercial mortgages loans. Management envisions investment income to remain depressed through 2014. Conservative underwriting practices and a strong capital position bode well for the company’s future growth levels. StanCorp remains focused on enhancing shareholder value via both dividend hike and share buyback. It also scores strongly with the credit rating agencies. We retain our Neutral recommendation.”
SanDisk (NASDAQ:SNDK) had its neutral rating reiterated by analysts at Zacks. They currently have a $101.00 price target on the stock. Zacks’ analyst wrote, “SanDisk posted solid first-quarter results. Not only did its top and bottom lines beat the Zacks Consensus Estimate, but the company also provided an encouraging guidance. We also remain positive on management’s expectation of a strong secular demand for its storage products. For fiscal 2014, management remains positive about SSD revenue growth, favorable product mix and better supply/demand metrics. Moreover, the acquisition of SMART Storage Systems is expected to expand SanDisk’s offering in the Enterprise SSD segment. However, continued lackluster PC sales, European issues, competition from Micron Technology and currency fluctuations remain the headwinds. Thus we reiterate our Neutral recommendation on SanDisk. “
Timmins Gold Corp (NYSE:TGD) had its sector perform rating reissued by analysts at Scotiabank. They currently have a C$2.25 target price on the stock.
Wisconsin Energy Corp (NYSE:WEC) had its outperform rating reaffirmed by analysts at Zacks. Zacks currently has a $54.00 target price on the stock. Zacks’ analyst wrote, “Wisconsin Energy continued its good run by reporting healthy earnings and revenue beat in the first quarter of 2014. Harsh winter generated additional electricity demand which in turn drove natural gas sales. Going ahead, the company is poised to gain from consistent customer additions and systematic infrastructure investments. The start-up of Oak Creek and Port Washington facilities as well as the biomass plant in Rothschild will help Wisconsin Energy to sustain its performance going forward. Other positives include its share repurchase program and attractive dividend payment, which will retain investors’ attention on the stock. We retain our Outperform recommendation.”
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