Analysts’ Upgrades for September, 21st (AVY, BMI, CLB, DGX, HMY, HRC, HWAY, IMBBY, KS, MAT)
Avery Dennison Corp. (NYSE:AVY) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $87.00 target price on the stock. According to Zacks, “Following the strong operating performance in the second quarter 2016, Avery Dennison raised its adjusted earnings per share guidance to a new range of $3.80–$3.95 for full year 2016. Its endeavor to reduce fixed costs, localize material sourcing and responding more quickly to changes in customer needs by decentralizing decision making will aid growth. The company's recent acquisition of Mactac will add capacity to support growth for both graphics and tapes. Further, Avery Dennison will gain from constant focus on productivity and capital discipline. Continued focus on execution of strategies, cost control and share repurchases will also drive results. The company has a positve record of earnings surprises in the recent quarters.”
Badger Meter (NYSE:BMI) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $37.00 target price on the stock. According to Zacks, “Badger Meter is making progress on the expansion of its sales channels, which will benefit Flow instrumentation sales in the coming quarters. This will help in balancing stronger municipal sales with weaker flow instrumentation sales. Badger Meter expects robust results over the balance of 2016. The company will also benefit from continuous investment in new products and product enhancements and momentum in residential and commercial municipal water products. Further, the recent increase in dividend and stock split will also drive growth.”
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Core Laboratories NV (NYSE:CLB) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $120.00 target price on the stock. According to Zacks, “Considering Core Laboratories' unique business model, disciplined financial management and technological expertise, we are taking a bullish stance on the company. We like Core Labs’ leadership position in the reservoir optimization niche, along with its global footprint and deep portfolio of proprietary products and services. Furthermore, the company’s low asset intensive operations and limited capex needs allow it to generate substantial free cash flows. Providing core sample and fluid analysis to oil and natural gas producers in managing their reserves, Core Labs have been able to operate profitably even in this low commodity price environment. In fact, the existing 'lower-for-longer' oil price scenario, have made CLB's services even more important for energy companies that look to utilize every dollar that they spend. Consequently, we think CLB offers substantial upside potential from the current price levels.”
Quest Diagnostics (NYSE:DGX) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $93.00 price target on the stock. According to Zacks, “Quest Diagnostics exceeded the Zacks Consensus Estimate for earnings as well as revenues for the second-quarter 2016. Keeping in line with its five-point strategy, Quest Diagnostics is refocusing on core diagnostic information services business through product launch and strategic alliances and is working on disciplined capital deployment. We are looking forward to the company’s recent partnerships with Safeway and HealthOne Systems of HCA Healthcare. We are also encouraged about the company’s newly launched three cancer tests that will provide clinically actionable insight into an individual's risk of developing hereditary cancer. Most importantly, after suffering through several quarters of low volume environment, the company has finally strated to witness improvement in terms of both volume and pricing. However, sustainability of this improvement is still a matter of question. Besides, reimbursement concerns remain.”
Harmony Gold Mining (NYSE:HMY) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Estimates for Harmony Gold have been stable lately. Harmony has a diverse portfolio of gold development projects spread across South Africa and PNG. The company is making a good progress with its Wafi-Golpu project. The company is also progressing well with its cost reduction program. Moreover, it remains focused on improving gold grades. However, Harmony is exposed to geopolitical risks associated with potential mine shut downs and labor strikes. Its operations are also likely to be impacted by a slower-than-expected ramp-up in production at mines and gold price volatility. “
Hill-Rom Holdings (NYSE:HRC) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $66.00 target price on the stock. According to Zacks, “Post a promising third quarter by Hill-Rom, we are upbeat about the company to remain on a solid growth trajectory over the near term. The company’s year-over-year outcome was impressive along with record level of gross margin. Based on several positive catalysts, we expect the company to expand geographically in the coming quarters. Notably, in the last reported quarter, Hill-Rom posted strong growth in both Asia-Pacific and the U.S. While we remain impressed with the company’s increased bottom-line guidance for fiscal 2016, the revenue guidance was quite discouraging. Moreover, Hill-Rom’s persistent poor performance in the International front, especially in the Middle East and Latin America keeps us concerned. Unfortunately no near term improvement can be expected in the existing capital crunch condition that eventually led to economic and political downturns in these economies.”
Healthways (NASDAQ:HWAY) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $29.00 price target on the stock. According to Zacks, “We believe that Healthways has a substantial pipeline of potential contracts with new and existing customers in both domestic and international markets, which should drive growth. The recently completed organizational restructure is expected to generate cost savings from full-year 2017, which will boost profitability. Meanwhile, estimates have been going up after posting stable second-quarterly results. We note that the company has positive record of earnings surprises in recent quarters. Thus we feel the Healthways stock offers investors a pocket of opportunity to benefit from Zacks wisdom.”
Imperial Tobacco Group PLC (OTC:IMBBY) was upgraded by analysts at Jefferies Group from a hold rating to a buy rating.
KapStone Paper and Packaging Corp. (NYSE:KS) was upgraded by analysts at BMO Capital Markets from a market perform rating to an outperform rating.
Mattel (NASDAQ:MAT) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $35.00 target price on the stock. According to Zacks, “Mattel’s increased focus on improving its point of sale through introduction of more products, brand innovation and strategic initiatives like entering new categories and strengthening of the Girls portfolio bode well. We believe the company’s renewed contracts for toy franchisees of Cars 3 and Toy Story 4, set to release in 2017 and 2018, respectively, will significantly boost revenues. Also, efforts to achieve cumulative cost savings and enhanced margins are added positives. Estimates have been stable lately ahead of the company’s third quarter earnings release and the company has mixed record of earnings surprises in recent quarters. However, it will take time for all the brands to show consistent improvement. Moreover, negative currency translation remains a major headwind. Also, costs related to sales boosting initiatives may keep profits under pressure while macroeconomic concerns might continue to hurt revenues.”
Nektar Therapeutics (NASDAQ:NKTR) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Nektar, a biopharmaceutical company, is focused on the development of drugs utilizing PEGylation and advanced polymer conjugate technology platforms. The company received a huge boost when Movantik became the first oral PAMORA to gain approval in both the U.S. and the EU. Nektar stands to receive significant sales milestone and royalty opportunity for Movantik under the AstraZeneca license agreement, which is expected to boost its financial position significantly. Moreover, if Nektar’s other partnered programs are successful, they could contribute to the company’s royalty streams as early as 2017. Nektar also has a robust pipeline. However, the company relies heavily on its partners for top-line growth. Stiff competition is another concern. It has several pipeline-related updates coming up over the next several quarters, which could act as catalyst. Any hiccup could pull down the stock significantly.”
OceanaGold (TSE:OGC) was upgraded by analysts at Scotiabank from a sector perform rating to an outperform rating. The firm currently has C$6.50 price target on the stock, up from their previous price target of C$6.25.
Pacific Gas & Electric Co. (NYSE:PCG) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “PG&E Corporation’s systematic investments in infrastructure projects, backed by a stable financial position, will allow it to improve service reliability and meet increasing customer demand. Further, steady growth in the customer count is expected to boost the company’s top line. PG&E Corporation’s stable financial position allows the company to pay regular dividends, which in turn, help it to retain investor interest. However, cost of compliance to new and stringent regulations is a major concern for PG&E Corporation. Moreover, penalties levied for the San Bruno case and changes in environmental mandates could impact the company’s financial performance.”
RBC Bearings (NASDAQ:ROLL) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “RBC Bearings' revenues and margins are currently being weighed by several headwinds. Factors like weak energy resource prices, U.K.’s Brexit vote, slow domestic demand of emerging markets and a stronger U.S. dollar has been weighing over the demand for manufacturing and industrial companies in the U.S. like RBC Bearings. Moreover, other issues such as extensive industry rivalry and increasing costs, if left unlocked, remain major causes of worry for the company. Over the last 60 days, the Zacks Consensus Estimate for the company has been revised downwards for both fiscal 2017 and 2018. However, improved aerospace business and higher marine sales are expected to boost the company’s revenues in the near term. The acquired Sargent Aerospace & Defense business is also likely to reinforce results in the upcoming quarters. RBC Bearings also intends to improve its margins on the back of greater operational efficacy.”
Scana Corp. (NYSE:SCG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $81.00 price target on the stock. According to Zacks, “SCANA Corp. is a stable, relatively strong and regulated electric utility, supported by regional demographics and a favorable electric utility rate. SCANA is well positioned in a positive regulatory environment, having a low risk business with outstanding customer growth and operational efficiency. The company also has an attractive and consistent dividend payout. Going forward, we expect modest growth to continue, thanks to the utility’s improving electric margins and rate increases. We are also bullish about the steady progress of new electric generation plants and nuclear expansion projects. Consequently, we think SCANA offers substantial upside potential from the current price levels and view it as an attractive investment.”
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