Equities Research Analysts’ Ratings Reiterations for August, 26th (AFG, APC, CAT, CELG, CVX, DOX, GERN, HAIN, MCRS, MKC)
American Financial Group (NYSE:AFG) had its neutral rating reissued by analysts at Zacks. They currently have a $62.00 price target on the stock. Zacks’ analyst wrote, “American Financial Group reported second-quarter earnings per share of $1.07, beating the Zacks Consensus Estimate by 12.6%. On a year-over-year basis, earnings increased 11.5% buoyed by higher contribution from the specialty property and casualty group. The company is a niche player in the property and casualty as well as annuity markets and will benefit from the recent launch of Aviation Division and acquisition of Summit Holdings. Improving industry fundamentals such as price strengthening and an increase in renewal ratio will drive overall growth. A strong balance sheet, low leverage and disciplined capital management are the other positives. We, however, expect low interest rates, exposure to catastrophes and a heavy concentration of risky securities in the company’s investment portfolio will pose near-term headwinds. We thus retain our Neutral recommendation on the stock. “
Anadarko Petroleum (NYSE:APC) had its neutral rating reaffirmed by analysts at Zacks. The firm currently has a $118.00 price target on the stock. Zacks’ analyst wrote, “Anadarko Petroleum Corp. reported mixed results in the second quarter of 2014 – while earnings missed the Zacks Consensus Estimate revenues beat the same. On a year-over-year basis, the top and bottom line increased primarily on the heels of higher natural gas, crude oil & condensates and natural gas liquids sales. Going ahead, the premium properties in the Wattenberg, Eagleford and Wolfcamp basins, and steady progress at the Lucius development project in the Gulf of Mexico will likely boost the company’s production. In addition, the start-up of the Lancaster cryogenic plant, several midstream asset acquisitions and a systematic divestiture program are expected to act as catalysts. In addition, increasing capital investments directed towards exploration and development activities will further strengthen its reserve position. However, volatile commodity prices and stringent drilling regulations remain as causes of concern. Thus, we are maintaining our Neutral recommendation on the stock.”
Caterpillar (NYSE:CAT) had its outperform rating reiterated by analysts at Zacks. They currently have a $130.00 price target on the stock. Zacks’ analyst wrote, “We have maintained our Outperform recommendation on Caterpillar with a target price of $130. Caterpillar’s second-quarter earnings per share increased 17% to $1.69 as the company’s incessant efforts to reduce costs mitigated the effect of lower mining-related sales on its profits largely. Caterpillar trimmed its 2014 revenue guidance to a range of $54 to $56 billion but increased its earnings per share guidance to $6.20. Caterpillar will benefit from the recovery in the U.S. construction sector and the macroeconomic stabilization in Europe, both helping to mitigate the impact of a weak mining sector. Furthermore, the share repurchases will provide support to the stock.”
Celgene (NASDAQ:CELG) had its buy rating reissued by analysts at Deutsche Bank.
Chevron (NYSE:CVX) had its neutral rating reissued by analysts at Zacks. Zacks currently has a $134.00 target price on the stock. Zacks’ analyst wrote, “Chevron Corp. – one of the largest integrated energy companies in the world and has an impressive business model reported strong second-quarter results on higher oil prices. The company’s current oil and gas development project pipeline is among the best in the industry, boasting large, multi-year projects. Additionally, Chevron possesses one of the healthiest balance sheets among peers, which helps it to capitalize on investment opportunities with the option of making strategic acquisitions. However, due to its integrated nature, Chevron is particularly susceptible to downside risk from any weakness in the global economy. We are also concerned about the company’s high level of capital spending, which may result in reduced returns going forward. As such, we see the stock performing in line with the broader market and maintain our Neutral recommendation.”
Amdocs Limited (NYSE:DOX) had its neutral rating reiterated by analysts at Zacks. Zacks currently has a $48.00 target price on the stock. Zacks’ analyst wrote, “Amdocs reported third-quarter 2014 results wherein the bottom line surpassed the Zacks Consensus Estimate while the top line was in line with the same. Amdocs’ opportunities in the U.S. are more visible after business stabilization with its major customer, AT&T, and renewal of long-term contracts with several leading telecom and cable TV operators. The company has also won significant managed service contracts in the economically volatile Europe. We believe that the long-term fundamentals of the company are intriguing owing to the gradual adoption of converged IP solutions by the telecom industry. However, high customer concentration coupled with the continuous consolidation trend in the U.S. telecom industry may act as headwinds going forward. Meanwhile, the stock is trading at a 52-week high price range. We, thus, maintain our long-term Neutral recommendation on Amdocs.”
Geron (NASDAQ:GERN) had its neutral rating reaffirmed by analysts at Zacks. Zacks currently has a $2.50 target price on the stock. Zacks’ analyst wrote, “Geron posted a second quarter loss of $0.06 per share, in line with the Zacks Consensus Estimate and the year-ago loss. Revenues of $341,000 were above the year-ago revenues of $112,000 but below the Zacks Consensus Estimate of $0.5 million. Geron suffered a huge setback in Mar 2014 when the FDA placed a clinical hold on its sole pipeline candidate, imetelstat. What is concerning is the liver toxicity issues raised by the agency. Although the FDA lifted a partial clinical hold on an investigator-sponsored study, the full clinical hold on Geron’s IND remains in place. While Geron is working on getting together the data required by the FDA, we currently have low visibility on the candidate’s future. Even if imetelstat studies continue, concerns about LFT abnormalities could limit the commercial potential of the candidate and restrict its long-term usage.”
The Hain Celestial Group (NASDAQ:HAIN) had its outperform rating reaffirmed by analysts at Zacks. The firm currently has a $106.00 price target on the stock.
MICROS Systems (NASDAQ:MCRS) had its neutral rating reaffirmed by analysts at Zacks. The firm currently has a $71.00 price target on the stock.
McCormick & Company, (NYSE:MKC) had its neutral rating reissued by analysts at Zacks. The firm currently has a $73.00 price target on the stock. Zacks’ analyst wrote, “McCormick delivered better-than-expected earnings in the second quarter of fiscal 2014 but missed revenue expectations by a slight margin. Earnings of $0.64 per share increased 8% from the year-ago quarter owing to top-line growth, cost saving initiatives, higher operating income and lower tax rate and share count. Sales grew 3% year over year, mainly driven by the acquisition of Wuhan Asia-Pacific Condiments. Both the consumer and industrial business segments witnessed an increase in sales in the quarter. However, the Americas region continued to remain soft in the consumer segment due to increased competitive pressure. Nevertheless, McCormick is optimistic on its consumer business over the long term as it expects growing demand for flavors in the coming years. However, we cannot overlook the potential impact of higher input costs, unfavorable currency and ongoing weak demand on the industrial business in the near term. We thus maintain a Neutral recommendation.”
Parker-Hannifin (NYSE:PH) had its neutral rating reiterated by analysts at Zacks. They currently have a $123.00 target price on the stock. Zacks’ analyst wrote, “Parker-Hannifin reported a modest performance in the fourth quarter of fiscal 2014. While earnings per share increased 15.7% year over year, results missed the Zacks Consensus Estimate by $0.01. Revenues increased 3% in the reported quarter. Parker-Hannifin aims to benefit from continuous strategic acquisitions. The company has consistently offered healthy dividend hikes and its industrial sales business is performing well over the last few quarters. However, higher costs for ongoing restructuring activities continue to be a drag on the company’s profitability. Nevertheless, we maintain our long-term Neutral recommendation on the stock with a target price of $123.00.”
PulteGroup (NYSE:PHM) had its neutral rating reissued by analysts at Zacks. Zacks currently has a $20.00 price target on the stock. Zacks’ analyst wrote, “Pulte’s second-quarter earnings of $0.25 per share lagged the Zacks Consensus Estimate and declined almost 4% year over year owing to soft revenues and higher tax rates. Revenues lagged the Zacks Consensus Estimate and were soft due to order shortfall and lower number of homes delivered. Pulte’s order trends have remained weak for several quarters versus competitors due to lower community count. Pulte is facing supply constraints in many markets, which in turn is lowering its community count. However, gross margins were strong for the second consecutive quarter due to improved pricing, better mix of sales and the company’s strategic pricing initiatives. Though Pulte’s improving profitability is an encouraging sign, lower order trends remains a concern.”
AT&T (NYSE:T) had its neutral rating reiterated by analysts at Zacks. They currently have a $36.00 price target on the stock. Zacks’ analyst wrote, “We maintain our Neutral recommendation on AT&T. The company is likely to witness strong momentum in both its Wireline and Wireless businesses. Continued strength in the smartphone business owing to the mobile share plan is driving the wireless business. Wireline is also improving on consistent enhancement of the U-verse and strategic services. Further, AT&T is the leading provider of WiFi (wireless broadband) connectivity, which is also a key growth driver. The company also expects to complete its LTE deployment by 2014, which could add to its network strength. However, the company faces several limitations in the wireless spectrum division and recently received a restriction from the Federal Communications Commission (FCC) regarding substantial airwave acquisitions in the upcoming auction. On the financial front, promotional costs associated with the Project Velocity IP (VIP) and Agile pose major impediments to the company’s growth trajectory.”
The Western Union Company (NYSE:WU) had its neutral rating reaffirmed by analysts at Zacks. They currently have a $18.00 target price on the stock. Zacks’ analyst wrote, “Western Union reported second-quarter earnings of $0.36 per share, which were in line with the Zacks Consensus Estimate as well as the year-ago quarter earnings. Though higher expenses overshadowed the revenue improvement, a lower share count mitigated the downside. We are optimistic about the company’s long-term growth momentum led by strategic investments in new products, services and technology. However, rapid growth of other cheaper money transfer options may lead to competitive pressure. The company is focusing on three areas -expansion of the existing network by retaining and adding new customers to the consumer money transfer business creation of a digital infrastructure to drive its electronic channels business and development of the business-to-business segment. However, the company is facing compliance-related issues and heightened competition which will weigh upon its profitability in the near term. We thus maintain our Neutral recommendation on the stock. “
Exxon Mobil (NYSE:XOM) had its neutral rating reiterated by analysts at Zacks. The firm currently has a $104.00 target price on the stock. Zacks’ analyst wrote, “We are maintaining our Neutral recommendation on ExxonMobil following its second-quarter 2014 release. The world’s largest publicly traded energy company reported better-than-expected earnings on the back of higher natural gas prices. However, ExxonMobil’s performance was muted due to decreased revenues and lower refining margins. Additionally, due to its integrated functions, Exxon is susceptible to downside risk from any weakness in the global economy. However, we believe that 2014 will look better, with the commencement of Kearl in Canada, the purchase of Bakken acreage from Denbury and the acquisition of Celtic Exploration. Moreover, Exxon is one of the best run integrated oil companies in the world, given its track record of high return on the deployed capital. Therefore, we believe that ExxonMobil is a core holding for investors seeking a defensive name with continued dividend growth. “
Yum! Brands (NYSE:YUM) had its neutral rating reiterated by analysts at Zacks. Zacks currently has a $76.00 price target on the stock. Zacks’ analyst wrote, “Yum! Brands’ second-quarter 2014 earnings and revenues were in line with the Zacks Consensus Estimate. However, earnings were up 30% and revenues grew 10% year over year. The top line was primarily driven by strong comps in the China division, reflecting diminishing concerns related to food safety issues raised in late 2012. While the China division has started to show signs of improvement, it is still not out of the woods, given the economic slowdown in the nation. Also, a new food safety issue in China has put the company in trouble. However, the company has survived such threats in the past. We are also encouraged by the company’s efforts to capitalize on high-growth emerging markets. We maintain our Neutral recommendation on the stock.”
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