Investment Analysts’ Upgrades for January, 22nd (ABM, AERI, AVY, AZN, GWW, HCG, IR, IVN, LBTYA, MCRN)

Investment Analysts’ upgrades for Monday, January 22nd:

ABM Industries (NYSE:ABM) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “ABM has underperformed the industry in the last three months due to macroeconomic concerns. Strong competitive pressures could limit ABM’s success rate in bidding for profitable businesses and its ability to increase prices in accordance with the rising costs. With the withdrawal of the United States from the Paris accord, the viability of energy-saving projects remains greatly at risk. In addition, catastrophic events like hurricane Harvey and Irma could have an adverse effect on these projects. However, ABM remains focused on driving sustainable profitability by effectively allocating resources to high margin services and business verticals with a strong competitive edge. The company further expects to extend its global footprint and strengthen its position in existing markets through both inorganic and organic growth. Management also reiterated that corporate restructuring initiatives were well on track to yield healthy growth momentum.”

Aerie Pharmaceuticals (NASDAQ:AERI) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “Aerie received a significant boost with the recent approval of lead drug Rhopressa.The approval came ahead of the PDUFA date in Feb. The approval will significantly boost Aerie's prospects as glaucoma is one of the largest segments in the global ophthalmic market.  Aerie is also evaluating Roclatan, a once-daily, quadruple-action fixed-dose combination of Rhopressa and Xalatan. However, Rhopressa faces stiff competition from established branded and generic pharmaceutical companies, such as Novartis’ Simbrinza and Travtan, and Allergan’s Lumigan, as well as other smaller biotechnology and pharmaceutical companies. Valeant Pharmaceutical’s Vyzulta was recently approved for open-angle glaucoma or ocular hypertension. Rhopressa will face a tough time in gaining market share due to competition from these products. Aerie’s shares have outperformed the industry in the last one year.”

Avery Dennison (NYSE:AVY) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $136.00 target price on the stock. According to Zacks, “Avery Dennison projects adjusted earnings per share guidance in the range of $4.90-$4.95 for fiscal 2017. The midpoint of the guidance range reflects year-over-year growth of 23%. The company expected reported sales growth in the range of 8% for the full year. Its consistent execution of strategies continues to enhance competitive advantage while driving profitable growth. Focus on productivity, acquisitions, aggressive cost control and share repurchases will also drive results.  Its segments remain well poised for growth. Moreover, its shares have outperformed the industry year to date. The company has a positive record of earnings surprises in the last few quarters. “

AstraZeneca (NYSE:AZN) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “AstraZeneca’s core products like Nexium, Seroquel and Crestor are facing generic competition, which is hurting sales. The diabetes franchise also faces stiff competition. Nonetheless, AstraZeneca’s newer drugs like Tagrisso and Brilinta should keep contributing to the top line. Meanwhile, cost-cutting initiatives should drive the bottom line. AstraZeneca also has a promising late-stage pipeline that includes immuno-oncology candidates.  Imfinzi, approved for bladder cancer and currently being evaluated for multiple cancers, is a key drug in the pipeline. AstraZeneca announced quite a few positive developments on the regulatory and pipeline front in 2017, which has led shares to outperform the industry in the past one year. Estimate movement has been mixed ahead of Q4 earnings release. The company has a positive record of earnings surprises in the recent quarters.”

W W Grainger (NYSE:GWW) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “Grainger expects sales growth in the range of 1.5-2.5% and earnings per share between $10.40 and $10.90 for 2017. The company projects sales growth of 3 to 7% and earnings per share to lie within $10.60 to $11.80 for 2018. Even though the company remains focused on reducing cost structure in Canada, the segment remains challenged due to higher expenses. Grainger’s pricing actions and a better economy are driving volume growth with large and medium customers. The stock has outperformed the industry in the past six months. The single channel online businesses continued to deliver strong sales growth and improved profits. Revenues will be benefited as digital marketing strategies boost demand. However, increased investment in digital marketing capabilities will impact margins in the near term. “

Home Capital Group (TSE:HCG) was upgraded by analysts at TD Securities from a hold rating to a buy rating. The firm currently has C$21.00 target price on the stock, up from their previous target price of C$17.00.

Ingersoll-Rand PLC (Ireland) (NYSE:IR) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $102.00 price target on the stock. According to Zacks, “Ingersoll is focusing on improving the efficiencies and capabilities of products and services within its core businesses to improve profitability and reiterated its earlier bullish guidance on favorable growth dynamics. The geographic and industrial diversity coupled with a large installed product base provides ample growth opportunities within service, spare parts and replacement revenue streams. Furthermore, a robust operating platform and an efficient management team will likely drive net asset value and dividend growth in future. Additionally, the company’s complementary portfolio of products and services is likely to assist it in strengthening the market position and achieving high productivity. However, Ingersoll has underperformed the industry in the last three months. Operating risks from high R&D costs for technology-driven products are expected to weigh on margins and impair its long-term growth to some extent.”

Ivanhoe Mines (TSE:IVN) was upgraded by analysts at CIBC from a neutral rating to an outperform rating. The firm currently has C$5.25 target price on the stock, down from their previous target price of C$5.50.

Liberty Global plc – Class A (NASDAQ:LBTYA) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Liberty Global continues to grow in the Europe and Central America through several mergers and acquisitions and is looking for more takeover options to expand its footprint. Launch of Telenet Innovation Center will help the company create and test new products focused on new mobile technologies. Liberty Global launched a new customer-friendly app, Connect App. The launch of DOCSIS 3.1 network services, joint venture with Vodafone in Netherlands, buyout of UTV Ireland TV stations from ITV, takeover of Cable & Wireless bode well for the company's growth. Over the past three months, the stock price moved up 18.6% as against the industry's gain of 8.7%. On the other hand, Liberty Global’s predominant operation in Europe remains a major concern. Further, stiff competition in the video, broadband, fixed-line telephony and mobile services business, foreign exchange rate risks and integration risks are major risks. “

Milacron (NYSE:MCRN) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $22.00 target price on the stock. According to Zacks, “Milacron’s year-to-date orders have gone up 10%, reflecting continued strength in high-growth regions and a solid order book. The company had raised organic sales growth guidance to 3.0-3.5%. Adjusted EBITDA guidance was tightened to $222-$224 million range to reflect higher material input costs and operational inefficiencies in Europe. Milacron’s revenue growth will be supported from underlying market growth in key segments, geographic expansion of certain product lines, consistent penetration of hot runners, and incremental share gain from new products. Cost-reduction initiatives will help boost margins. The company has a positive record of earnings surprises over the past few quarters.”

Noble (NYSE:NE) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Noble is a leading offshore drilling firm with a robust portfolio of assets. Though the industry has witnessed a setback in the past few months, the company is likely to be less impacted by it than its peers. This is because Noble Corp. enjoys a strong backlog position ($3.2 billion). With less oil being discovered on land and companies having to dig ever deeper to get to their reserves, Noble is poised to benefit from a market with robust multi-year demand trends, given its technologically advanced and versatile drilling fleet. However, we are concerned about Noble Corp’s high debt level. The company has a heavy debt-to-capitalization ratio of 41.4% compared to the industry’s ratio of 37.9%.”

NiSource (NYSE:NI) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $27.00 target price on the stock. According to Zacks, “Shares of NiSource have returned higher than the industry it belongs to in the last 12 months. NiSource is benefiting from continued execution of its infrastructure investment strategy.  NiSource will annually invest nearly $1.6-$1.8 billion in planned utility infrastructures from 2019 to 2020 and has identified long-term infrastructure investments worth $30 billion. The company is also working actively to reduce its carbon footprint by bringing down the coal usage. Despite investing in upgrade programs, NiSource Inc. faces the risk of disruption in operation from its ageing infrastructure. NiSource’s rising debt level amid increasing interest rates is another concern.”

TriMas (NASDAQ:TRS) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $31.00 target price on the stock. According to Zacks, “TriMas is poised to gain from stable order patterns, investment in new products, cross-currency swap agreement and efforts on debt reduction. Focus on improving manufacturing footprint and strategies will also drive growth. The company has outperformed the industry in the last year. The company has a positive record of earnings surprise in the past few quarters.”

Watsco (NYSE:WSO) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $197.00 target price on the stock. According to Zacks, “Watsco will gain from its industry-leading technologies and estimates the e-commerce sales to touch $1 billion this year. Watsco continues to transform its business into the digital age by investing in scalable platforms for mobile apps, e-commerce, business intelligence and supply-chain optimization. Its technology evolution continues to make progress. Further, its focus on strategic acquisitions, cost-cutting initiatives and growth potential in the replacement market will drive growth.”

Watts Water Technologies (NYSE:WTS) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $90.00 target price on the stock. According to Zacks, “The continued execution of key strategic initiatives, including the transformation and restructuring actions undertaken by Watts Water will benefit fourth-quarter earnings. Watts Water expects organic sales growth rate to improve on a sequential basis driven by consistent growth in Americas from relatively healthy end markets. Europe and Asia-Pacific are also likely to improve over third-quarter levels. The company will also gain from its buyouts and new product development strategies.”

Intrexon (NYSE:XON) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Intrexon the company's expanding portfolio of technologies has enabled it to develop a robust pipeline of candidates targeting a broad range of diseases including cancer and others. We are also positive on Intrexon’s efforts to expand through acquisitions, exclusive channel collaborations (ECCs) and joint ventures. Additionally, it announced the formation of a wholly-owned subsidiary-Precigen, Inc. as part of its structural alternatives so that it can take better decisions of its health business.However, the company largely depends on ECCs and license, and collaboration deals for revenues. Any unfavorable outcome from the development of these might be a major setback and hurt the company’s prospects too. Furthermore, shares of the company have underperformed the Medical Services industry in a year’s time. Estimates have remained stable ahead of the Q4 earnings results.”

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