Analysts’ Upgrades for October, 23rd (AGN, AVP, AWR, BIDU, CL, COL, DVA, GKNLY, KEY, MOH)
Allergan PLC. (NYSE:AGN) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Allergan boasts dominant growth franchises in several areas and is strengthening its product portfolio through strategic acquisitions. Key products like Botox and Linzess and new products such as Viberzi and Vraylar, are supporting sales growth. It also boasts a strong branded pipeline. Biosimilars also represent significant opportunity. However, while we remain optimistic about the company’s growth prospects, it is facing generic competition for legacy brands like Namenda and Asacol HD as well as patent challenges for some of the other products in its branded portfolio, which concerns us. Also, competition for key growth drivers, Restasis and Linzess, is an investor concern. Though Allergan’s shares have declined this year so far, they have performed better than the industry. Estimates have declined slightly ahead of the Q3 earnings release. The company has a mixed record of earnings surprises in recent quarters.”
Avon Products (NYSE:AVP) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $2.50 price target on the stock. According to Zacks, “Avon’s progress on Transformation Plan, which is on track to deliver cost savings goals of $230 million for 2017, is impressive. With significant progress on enhancing cost structure and improving financial flexibility, the company is now keen on investing in growth by implementing strategies to aid in strengthening Avon while driving profitable growth. However, Avon has underperformed the industry in the last three months largely due to its dismal surprise history. The company has lagged top-line and bottom-line estimates for four straight quarters now. Results for the most recent quarter were mainly impacted by strong comparisons with the prior-year quarter. Based on the dismal performance, the company now expects constant-dollar revenue growth for 2017 to be at the low-end of its previous guidance range of low-single digits growth. Nevertheless, estimates have been stable lately ahead of the third quarter earnings release.”
American States Water (NYSE:AWR) was upgraded by analysts at Zacks Investment Research from a hold rating to a strong-buy rating. The firm currently has $64.00 target price on the stock. According to Zacks, “Shares of American States Water have outperformed the industry in the last 12 months. The company’s strength lies in an expanding customer base, extensive water rights and strong credit ratings. Further, it makes systematic investments to strengthen existing infrastructure. In addition, new water rates will help to boost its margins. American Sates Water’s major drawback is its dependence on a single state, California, for the majority of its earnings. Plus its highly regulated operations and risk of water contamination leading to increase in operating costs could adversely impact results.”
Baidu (NASDAQ:BIDU) was upgraded by analysts at UBS AG from a hold rating to a buy rating.
Colgate-Palmolive (NYSE:CL) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $81.00 price target on the stock. According to Zacks, “Colgate has outperformed the sector in the past three months. We remain encouraged by the progress on its 2012 Restructuring Program and expect additional opportunities identified under the program to help reach the higher end of its previously stated cost and savings view. Moreover, the company has been infamous among investors with its meet or beat earnings track record. However, the company’s sales missed expectations for the fifth straight quarter in second-quarter due to continued softness in North America and challenges in Asia-Pacific. Further, the company lagged sales estimates in 16 out of the trailing 17 quarters. Nevertheless, the company remains focused on four fundamentals to boost profits including, increased spending on advertisements; innovation across portfolio; higher spends on e-commerce business and aggressively maximizing productivity. Also, its disciplined capital strategy bodes well. Estimates have been stable lately.”
Rockwell Collins (NYSE:COL) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $151.00 price target on the stock. According to Zacks, “Rockwell Collins continues to be the foremost global supplier of communications and avionics equipment for both commercial and military customers. A diversified portfolio, comprising both commercial and government customers, protects it from risks of reduced orders from either customer class. Notably, Rockwell Collins outperformed the broader industry in last year. Moreover, the company follows a strategic acquisition program, which in turn boosts its inorganic growth trajectory. However, the company derives a major portion of its revenues from overseas, which exposes it to the risk of currency fluctuations.”
DaVita HealthCare Partners (NYSE:DVA) was upgraded by analysts at Wolfe Research from a market perform rating to an outperform rating.
GKN plc (NASDAQ:GKNLY) was upgraded by analysts at Liberum Capital from a sell rating to a hold rating.
KeyCorp (NYSE:KEY) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “KeyCorp’s shares have significantly underperformed the industry over the past six months. Yet, the company has an impressive earnings surprise history, not lagging the Zacks Consensus Estimate in the trailing four quarters. The company’s third-quarter 2017 results benefited from a rise in revenues and lower credit cost while an increase in expenses was a headwind. The bank remains well positioned to benefit from rising rate environment, increase in loan and deposit balances and improving economic stability. However, persistently increasing expenses owing to investments in franchise and acquisitions are likely to hurt bottom-line growth. Also, significant exposure to real estate loans continues to be a major concern.”
Molina Healthcare (NYSE:MOH) was upgraded by analysts at Wolfe Research from a market perform rating to an outperform rating.
MGIC Investment Corporation (NYSE:MTG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $15.00 price target on the stock. According to Zacks, “MGIC Investment’s third-quarter bottom line beat estimates on lower losses incurred. Insurance in force improved while claims declined year over year. Also, expense ratio remained low. Shares of MGIC Investment have outperformed the industry, since it posted better than third quarter earnings. The company remains well poised to deliver improved earnings banking on declining delinquency, lower claims payments and improving housing market. The company expects to write about the same amount of new business as 2016, and also estimates insurance in force to improve in 2017. This apart, the company remains focused in enhancing shareholders’ value. Also, positive credit trends, low expense ratio are tailwinds. However, a competitive environment and pressure to maintain capital at required level will reduce the company’s capital flexibility.”
Maxim Integrated Products (NASDAQ:MXIM) was upgraded by analysts at Zacks Investment Research from a hold rating to a strong-buy rating. Zacks Investment Research currently has $58.00 target price on the stock. According to Zacks, “Maxim is an OEM of analog and mixed signal ICs. The company's first-quarter earnings surpass the Zacks Consensus Estimate on the back of solid performances by industrial and automotive segments. On a year to date basis, the stock has outperformed the industry to which it belongs to. Maxim has a solid portfolio that generates steady design wins, a highly profitable and well-diversified core business, a policy of maintaining efficiency that has led to cost cutting measures and regular cash returns. Maxim’s exposure to the consumer and communications markets increases risks. However, the diversification of the consumer revenue across a variety of tablets, wearables, peripherals and smartphones is adding stability to the company’s business profile.”
SAP SE (NYSE:SAP) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $127.00 price target on the stock. According to Zacks, “SAP’s third-quarter 2017 earnings beat the Zacks Consensus Estimate by 4.4%, and surged 35% from the year-ago tally. A flourishing Cloud subscriptions and support business, along with consistent strength in Cloud and software business, drove earnings. SAP’s Customer Engagement and Commerce solutions once again achieved double-digit growth in new cloud bookings as well as software revenue. Going forward, SAP remains bullish about the prospects of its cloud business. This apart, exceptional traction of SAP S/4 HANA — the company’s proprietary offering — has been fueling growth. Moreover, robust traction of human capital management is adding to the sales momentum. Additionally, continuous expansion of SAP's business network is supplementing key financials. However, stiff competition in the IT services industry and dull prospects for global IT industry may weigh on the company’s profits.”
Skechers U.S.A. (NYSE:SKX) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Greater emphasis on new line of products, cost containment efforts, inventory management and global distribution platform have helped lift Skechers’ performance. After witnessing a negative earnings surprise in the second quarter of 2017, Skechers made a sharp come back in the third quarter with the bottom line outperforming the Zacks Consensus Estimate by 37.2%. Following the sturdy performance, shares have been on a bull run and have outpaced the industry in a month. Net sales also beat the estimate for the fourth quarter in row gaining from solid performances at the international wholesale business and company-owned global retail operations. Management now expects both the top and bottom lines to increase year over year during the final quarter. However, higher general & administrative expenses remain a matter of concern. Nevertheless, Skechers expects the rate of increase to decelerate going forward.”
SL Green Realty Corporation (NYSE:SLG) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “SL Green’s third-quarter 2017 funds from operations (FFO) per share of $1.67 missed the Zacks Consensus Estimate. Same-store cash net operating income (NOI) improved in the third quarter, while mark-to-market on signed sub-urban office leases was lower compared to the previously fully-escalated rents on the same spaces. The company reiterated its FFO per share outlook for full-year 2017. SL Green enjoys high-quality office properties, diverse tenant base and has solid balance-sheet strength. Notably, in September the company acquired stake in Worldwide Plaza through a partnership with private investment manager RXR Realty. However, stiff competition from other market participants remains a concern. In addition, the company’s shares have underperformed the industry it belongs to, year to date.”
Synchrony Financial (NYSE:SYF) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “Synchrony Financial’s third quarter earnings surpassed the Zacks Consensus Estimate by 9.4% but declined year over year due to higher expenses. In the last three months, shares of the company have outperformed the industry. The company is well positioned for long-term growth on the back of consistent increase in revenues driven by its rapidly growing interest income and inorganic growth strategies. Moreover, its CareCredit platform continued to perform well over past many quarters. Synchrony Financial’s healthy balance sheet remains a major positive. However, the company has been witnessing a steep rise in its expenses since 2013 that has weighed on its bottom line. It also suffers from increasing allowance for loan losses that has been increasing due to the rapid growth in its loan portfolio. The company also suffers from rising fraud-related losses.”
Universal Forest Products (NASDAQ:UFPI) was upgraded by analysts at Zacks Investment Research from a hold rating to a strong-buy rating. The firm currently has $125.00 price target on the stock. According to Zacks, “In the last three months, shares of Universal Forest Products have outperformed the industry. We believe that strengthening demand in the U.S. construction market, addition of customers, new product launches and synergistic benefits from acquired assets will bode well for the company in the long run. It posted record results in third-quarter 2017, with positive earnings and sales surprises of 14.7% and 6%, respectively. Also, the company recently announced a three-for-one stock split, to be made effective by issuing two additional common shares for each common share held by the shareholders. Also, a 13.3% increase in semi-annual dividend rate was declared.”
Valero Energy Corporation (NYSE:VLO) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $87.00 price target on the stock. According to Zacks, “Among independent refiners, Valero has the most diversified refinery base. The company has been consistently reviewing its refining portfolio and enhancing its asset base by acquiring refinery assets, which help in boosting its operating performance. Also, Valero’s dividend yield is attractive and is much higher than the industry. It is to be noted that improving throughput volume on the back of higher refinery utilization rates has been rewarding Valero over the past four quarters. Following this development, the company managed to surpass the Zacks Consensus Estimate in each of the prior four quarters. Also, Valero’s price performance looks lucrative as reflected by the company’s 14.6% gain as compared with 9% improvement of the industry over the last three months.”
Waters Corporation (NYSE:WAT) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $211.00 price target on the stock. According to Zacks, “Year to date, shares of Waters Corp. have slightly underperformed the industry’s average return. Going forward, the company believes that stable demand from pharmaceutical business, steady recurring revenues, strength in Asia and modest recovery in industrial markets will accelerate its momentum. Based on these dynamics, the company is expecting strong mid-single-digit constant currency sales increase in 2017. The Industrial business of the company is also proving to be a major profit churner. Even the government and academic markets have returned to the growth track after sustained weakness. Waters Corp. has been benefiting hugely from both of its LC and LC/MS platforms. However, the company’s growth will likely be hindered by contracting demand in the Americas.Further, currency headwinds are expected to somewhat hinder the company’s sales, going forward.”
Receive News & Ratings for Allergan PLC Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Allergan PLC and related companies with MarketBeat.com's FREE daily email newsletter.