Analysts’ Upgrades for July, 11th (AMSF, APEI, BIG, CA, CYH, DIR.UN, DRI, ESS, FMS, LEG)
AMERISAFE (NASDAQ:AMSF) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “Amerisafe’s efficient claims management, good underwriting results, favorable loss and frequency trends, prudent reserve analytics, and improved operating leverage impress. The company’s cash flows and book value per share also reflect prudent capital management. Moreover, the company has maintained a niche market position in the workers' compensation market. However, the company has been facing headwinds from a soft pricing environment and stiff competition. Year to date, the shares of the company have lost nearly 11%, substantially underperforming the Zacks categorized Accident and Health Insurance industry that gained over 10%. Moreover, The Zacks Consensus Estimates for both 2017 and 2018 have also gone down over the past 60 days. It will release its 2017 second quarter financial results on Thursday, Jul 27, 2017 after the market closes,”
American Public Education (NASDAQ:APEI) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “The affordability of the American Public's courses and programs will benefit the company in the long run owing to high price sensitivity among students. The company has taken up several initiatives to boost its top line. It will continue to improve enrollment trends by strengthening its brand, adding new programs and expanding its strategic relationships. However, American Public's sales and enrollment trends are being hurt by persistent volatility and softness in enrollment by students using Federal aid and military tuition assistance. Shares of the company have also underperformed the Zacks categorized Schools industry in the last one year. Moreover, the company’s second-quarter outlook is discouraging.”
Big Lots (NYSE:BIG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $52.00 price target on the stock. According to Zacks, “Shares of Big Lots have declined over the past six months. However, the company's strategic endeavors, recent uptrend in the gross margin and positive earnings surprise streak in the last six quarters, all indicate that stock might recover in the near term. In the first-quarter fiscal 2017, the company not only reported robust earnings but also surpassed the guidance range provided previously. Moreover, following better-than-expected first-quarter earnings the company raised fiscal 2017 guidance and now expects adjusted earnings in the $4.05–$4.20, up from the earlier guidance of $3.95–$4.10. While the company’s dismal top-line performance in the trailing four quarters has been a cause of worry, its furniture financing programs has been consistently gaining traction. Further, the challenging retail landscape, aggressive promotional strategies and waning store traffic might weigh on the performance.”
CA (NASDAQ:CA) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “CA is a leading information technology (IT) management software company. We are optimistic about CA’s acquisition strategy, which has enhanced its IT management, software and services portfolio. Moreover, we believe that the diversity of its products and the increased efficiency offered by them will attract customers across sectors, lending stability to its business model. Additionally, CA’s “go to market” sales strategy integrates the commercial functions of sales, marketing, brand management, pricing and consumer insight, which helps it in lowering costs, thereby improving the bottom line. Nonetheless, intensifying competition from peers, an uncertain economic environment, currency headwinds and the weak IT spending forecast by Gartner are other concerns. Notably, shares of the company has underperformed the broader market over the last one year period.”
Community Health Systems (NYSE:CYH) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $11.00 target price on the stock. According to Zacks, “Community Health Systems’ inorganic growth via accretive acquisitions and strategic divestures has been a major revenue driver over past few years. Well reflective of the company’s strong fundamentals, the stock gained 72% year to date, outperforming the Zacks Categorized Hospitals industry’s increase of 16%. However, the company rising debt level raised concerns and it faces uncertainty over regulatory reforms. Revenue concentration is another major headwind as the company generates a significant part of its revenues from a selected number of states like Florida, Pennsylvania, Texas, Indiana and Tennessee. In addition, the company has also faced discouraging estimate trend over past few weeks. The Zacks Consensus Estimate for the current quarter, current year and also the next year has gone down significantly in the past one month.”
Dream Industrial Real Estate Invest Trst (TSE:DIR.UN) was upgraded by analysts at Canaccord Genuity from a hold rating to a buy rating. Canaccord Genuity currently has C$10.00 price target on the stock, up from their previous price target of C$8.75.
Darden Restaurants (NYSE:DRI) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $100.00 target price on the stock. According to Zacks, “Darden posted solid fourth-quarter fiscal 2017 results with both the bottom line and the top line beating the Zacks Consensus Estimate. In fact, this quarter marked the 11th successive earnings beat for the company. Meanwhile, Darden’s shares outpaced the Zacks categorized Retail–Restaurants industry year to date. Going forward, various sales initiatives and technology-driven moves should boost the top line. Additionally, efforts to attract guests at Olive Garden, LongHorn and other units, along with the cost saving measures bode well. However, a soft consumer spending environment could keep comps under pressure, while rising labor costs and a non-franchised business model could dampen the company’s profits, moving ahead.”
Essex Property Trust (NYSE:ESS) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $283.00 price target on the stock. According to Zacks, “Shares of Essex Property outperformed the Zacks categorized REIT and Equity Trust – Residential industry in the past three months. Additionally, funds from operations (FFO) per share estimates for second-quarter and full-year 2017 moved north over the past 30 days. Moving ahead, with a strong property base and solid balance sheet, Essex is likely to leverage on favorable demographic trends in its markets. Moreover, the company has a 23-year history of increasing cash dividend. Also, backed by solid growth in revenues, Essex Property delivered a better-than-expected core FFO per share for first-quarter 2017. Performance remained solid in the Seattle portfolio. The company raised its guidance for 2017 as well. However, there have been consistent apartment deliveries in its markets. Amid this, pricing power is anticipated to moderate and aggressive rental concessions are likely to continue.”
Fresenius Medical Care Corporation (NYSE:FMS) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $54.00 target price on the stock. According to Zacks, “Fresenius Medical Care has set up a strong long term objective called the ‘Growth Strategy 2020’, where it aims to increase its revenue to $28 billion by 2020, corresponding to an average annual growth rate of around 10%. Fresenius Medical Care reported a solid first quarter of 2017, beating the Zacks Consensus Estimate for both top line and bottom line. Furthermore, an upbeat guidance instills our confidence on the company’s stock. A wide range of dialysis products, deliberate initiatives for attaining market traction, solid international foothold, strategic acquisitions & divestments are major growth catalysts for the company at the moment. However, Fresenius Medical Care stock looks overvalued at the moment. Apart from this, the company has had a disappointing run on the bourse over the last one year. A tough regulatory environment, difficulties in attaining a solid profit margin in foreign legal-paradigms & competition in the niche markets are headwinds.”
Leggett & Platt, (NYSE:LEG) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Leggett has been progressing well on its long-term strategy and remains on track with achieving 2019 targets. Further, management’s reiterated view reflects its confidence in achieving sales growth of 5–8% in 2017, which in turn is expected to generate solid profit margins and increased EPS. Also, strategic initiatives and a disciplined capital allocation strategy bode well. However, the company has underperformed the broader industry in the last three months. Much of this could be attributed to the fluctuation in raw material prices, particularly steel. Moreover, management expects the inflationary pressure on steel prices to persist in 2017, which may hurt Leggett’s earnings. Further, currency woes and stiff competition pose significant threats. Estimates have been stable lately ahead of the second quarter earnings release. The company has a postivie record of earnings surprises in recent quarters.”
lululemon athletica inc. (NASDAQ:LULU) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $66.00 price target on the stock. According to Zacks, “Lululemon stock has made notable recovery, outperforming the broader industry in the last three months, after delivering top and bottom line beat in first-quarter fiscal 2017. Further, the company is all set to utilize its capabilities built in fiscal 2015 over the next five years. In fact, by 2020, the company aims to double its revenues to about $4 billion and more than double its earnings. Moreover, the company’s eCommerce growth initiatives and ivivva remodeling bode well. We note that the company’s eCommerce comps improved in the low-double digits range so far in the fiscal second-quarter. This led the company to provide solid comps guidance for the second quarter and fiscal 2017, reflecting further strengthening of eCommerce business. However, in-store comps continue to suffer. The company also tweaked revenue forecast for fiscal 2017, which indicates further weakness.”
Masimo Corporation (NASDAQ:MASI) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Over the past one year, Masimo has outperformed the broader industry with respect to price. Going forward, we believe the company's expanding product portfolio is a key catalyst. Wider adoption of its non-invasive patient monitoring technology will help the company gain market traction. Masimo’s SET pulse oximetry business represents considerable growth opportunities in international markets. Moreover, the FDA 510 (k) approval for the Radius 7 wearable and the O3 regional oximetry device are significant positives. On the flipside, unsatisfactory performance by the Rainbow product segment in the first quarter is a concern. Masimo also looks a tad bit expensive at the moment. Furthermore, the company faces fierce competition from OEM distributors and medical devices bigwigs that might mar its top line over the long haul. However Masimo reported solid first-quarter of 2017 results, beating the Zacks Consensus Estimate for both the counts.”
ServiceNow (NYSE:NOW) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “ServiceNow is rapidly penetrating the non-ITSM markets like customer service, human resource and security. The company is benefiting from growing adoption of its platform and tools in the Global 2000 (G2K) companies, as defined by Forbes. We believe that the company’s expanding product portfolio, increasing multi-product customer base and strong renewal rate will help the company easily achieve its long-term revenue growth target of $4 billion. ServiceNow has outperformed the Zacks categorised IT services industry on a year-to-date basis. Estimates have been stable lately ahead of the company's Q2 earnings release. The company has a negative record of earnings surprises in recent quarters. However, stiff competition in the non-ITSM market and modest growth at professional business service segment are major concerns. Moreover, the company is yet to report profit, which doesn’t augur well for investor confidence.”
Philip Morris International (NYSE:PM) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $132.00 target price on the stock. According to Zacks, “Shares of Philip Morris have outperformed the Zacks categorized Tobacco industry on a year-to-date basis, primarily due to its strong portfolio of tobacco brands and pricing power. We note that the company is aggressively investing in creating smoke-free products called reduced risk products, such as heatsticks and iQOS products. Notably, it has a bright potential to make Britain smoke-free via its IQOS. Furthermore, the marketing and technology-sharing agreement between Philip Morris and its peer Altria Group is also boosting the businesses of both the companies and will help them maintain the market share. However, strict government regulations, declining demand for cigarettes and currency headwinds remain major concerns for the company. Nevertheless, estimates for 2017 have increased in the last seven days.”
Sohu.com (NASDAQ:SOHU) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Sohu.com's results continues to suffer from stricter regulations, sluggish Chinese economic growth rate and intensifying competition. All these have been reflected in the stock price movement. In the past one year, shares of Sohu grossly underperformed the Zacks Internet Services Industry. However, anticipated robust performance from the legacy Tian Long Ba Bu (TLBB) game is expected to positively impact results. Meanwhile, estimates have been stable lately ahead of the company's Q2 earnings release. We also note that the company’s strength in search and mobile businesses is a positive. Moreover, the online video business has some decent growth potential in the long run. “
Steris Plc (NYSE:STE) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $92.00 target price on the stock. According to Zacks, “Over the last three months, STERIS is trading above the broader Medical Instruments industry. We are impressed with the company’s persistent strong organic growth performance across most of its segments. Notably, Synergy Health continues to be one of the contributors to the company’s top line growth. The company’s last reported fourth-quarter fiscal 2017 results were also encouraging. Further, the company’s strong cash position buoys optimism. However, the year-over-year decline in sales was disappointing. Also the lowered guidance for fiscal 2018 revenue hints at a gloomy operating scenario in the days ahead. We note that, governments and insurance companies’ consistent efforts to curb the rising healthcare cost, has been putting pressure on the stock for quite some time. Additionally, currency and market headwinds continue to woe the company.”
Symantec Corporation (NASDAQ:SYMC) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a buy rating. They currently have $32.00 price target on the stock. According to Zacks, “Estimates have been stable ahead of Symantec’s first-quarter fiscal 2018 results. The prospects of cybersecurity companies look bright as the recent global hackings, like WannaCry and Petya, have started to adversely affect the top- and bottom-line results of various organizations like Mondelez, FedEx and Merck & Co. The silver lining in this entire episode will be the rise in demand for security-related products among companies and governments, in our opinion. We believe that this could bring Symantec back into the limelight. Moreover, the recent deal to acquire Israel-based Fireglass will further strengthen Symantec’s leadership position in Secure Web Gateway and Email protection, both delivered on premises and in the cloud. Nonetheless, smaller companies like Kaspersky are consistently launching comparable products. These, along with competition from the likes of Microsoft, remain headwinds.”
TransAlta Corporation (NYSE:TAC) (TSE:TA) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “TransAlta is Canada’s largest non-regulated electric generation and marketing company. “
Triumph Bancorp (NASDAQ:TBK) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $28.00 target price on the stock. According to Zacks, “Triumph Bancorp Inc. is a financial holding company with a diversified line of community banking, commercial finance and asset management activities. It serves its local communities through its two wholly owned bank subsidiaries, Triumph Savings Bank, SSB and Triumph Community Bank, N.A. These operations include a full suite of lending and depository products and services focused on meeting the needs of its customers in its community banking markets. It serves a broad national customer base through its commercial finance brands, which include discount factoring through Triumph Business Capital, equipment lending and general asset based lending through Triumph Commercial Finance, healthcare asset based lending through Triumph Healthcare Finance, commercial insurance through Triumph Insurance Group, institutional asset management services through Triumph Capital Advisors. Triumph Bancorp Inc. is headquartered in Dallas, Texas. “
Texas Capital Bancshares (NASDAQ:TCBI) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $87.00 target price on the stock. According to Zacks, “Texas Capital’s shares outperformed the Zacks categorized Southwest Banks industry in the last one year. The company’s diversified fee income sources should continue driving its top-line growth. Moreover, Texas Capital’s strong capital position keeps it well poised for opportunistic expansions. Further, the recent Fed interest rate hike expected to ease the pressure on margin. However, lack of geographical diversification and significantly mounting expenses keep us apprehensive. Nevertheless, the expectation of lesser regulations will act as a tailwind for the company in the medium term.”
Thermo Fisher Scientific (NYSE:TMO) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $199.00 target price on the stock. According to Zacks, “Over the last three months, Thermo Fisher is trading above the broader Medical – Instruments industry. The company’s last reported first quarter 2017 was quite impressive. The increased 2017 guidance is all the more encouraging indicating the fact that this overall bullish trend will continue through 2017. Moreover we remain encouraged by the company’s series of product launches and acquisitions along with strong growth in emerging markets and better management observed in its customer value proposition. Thermo Fisher’s acquisition of FEI has already started to boost the company’s analytical instruments portfolio. Its recent decision to acquire Pantheon is to expand its biopharma services in Europe. On the flip side, competitive pressure and currency headwinds add woes.”
TherapeuticsMD (NYSEMKT:TXMD) was upgraded by analysts at Oppenheimer Holdings, Inc. from a market perform rating to an outperform rating.
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