Investment Analysts’ upgrades for Tuesday, August 22nd:
American Financial Group (NYSE:AFG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $114.00 price target on the stock. According to Zacks, “Shares of American Financial have outperformed the industry year to date. The company is well poised to benefit from impressive inorganic growth and restructuring initiatives. Better industry fundamentals, with strong pricing and a higher renewal ratio, should drive overall growth. Consistent price increase in property and casualty business, combined ratio that compares favorably with industry average, a strong balance sheet, low leverage cost, and disciplined capital management are positives. Based on strong operational performance, it raised core net operating earnings of $6.40–$6.90 per share in 2017. However, American Financial’s exposure to cat loss is a risk to underwriting results. A still soft interest rate environment is expected to weigh on desired upside in investment results.”
Actuant Corporation (NYSE:ATU) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “On the wake of becoming a resilient company, Actuant has been undertaking certain restructuring actions and accelerating lean production efforts within its business. Moreover, stronger Industrial and Engineered Solutions’ performance would likely boost results in the quarters ahead. However, over the last three months, Actuant's shares have underperformed and look overvalued compared to the industry. The company's noted that challenging conditions prevailing in the global energy market is currently hurting its Hydratight business. Headwinds such as dismal oil prices or a stronger U.S. dollar might continue to weigh over the company's top- and bottom-line performances in the upcoming quarters. Over the last 30 days, Zacks Consensus Estimate for the stock has remained unchanged for fiscal 2018.”
BorgWarner (NYSE:BWA) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $50.00 price target on the stock. According to Zacks, “BorgWarner reported better-than-expected adjusted earnings per share in the second-quarter 2017. Revenues also surpassed the estimate. The company has outperformed the industry it belongs to in the last three months. High organic net sales growth expectations are likely to aid BorgWarner going forward. Huge business opportunities in Asia, the Americas and Europe in the next three years are anticipated to contribute to a major portion of growth. Also, a healthy balance sheet and ample cash flows help the company return capital to shareholders and undertake acquisitions. Moreover, BorgWarner is poised to benefit from its expansion strategy. However, the company is facing foreign currency headwinds and pressure from original equipment manufacturers (OEM) to reduce prices, which might pose a threat to the company. Due to foreign currency fluctuations it might face a negative impact on sales.”
Carnival Corporation (NYSE:CCL) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $77.00 price target on the stock. According to Zacks, “Carnival shares have outpaced the industry in the past year. Given burgeoning demand for cruise travel in 2017, the addition of new ships to its fleet bodes well. Carnival believes that it is well positioned for continued earnings growth, given the current strength in its bookings along with pricing trends for the year. Notably, its brand building efforts together with other marketing activities are driving bookings. Its strategy of growing beyond familiar itineraries and capitalizing on fast growing markets also bodes well. New onboard product offerings and strategic initiatives are expected to drive onboard yield gains. Cost containment efforts like lower fuel consumption could also aid profits. However, adverse forex translations, higher costs along with macroeconomic issues in key operating regions remain headwinds. A potential increase in fuel costs can also hamper its profitability.”
Cooper Companies, Inc. (The) (NYSE:COO) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $277.00 target price on the stock. According to Zacks, “The Cooper Companies ended second-quarter fiscal 2017 on a solid note, beating the Zacks Consensus Estimates on both lines. On a positive note, the company outperformed the broader industry in terms of price performance over the past six months. The Cooper Companies have always had an impressive show from its CooperSurgical business segment. The CooperVision segment also delivered strong sales in the last quarter, buoyed by robust performance by Toric. However, the company generates a significant part of its revenues in foreign currencies. Thus, the ongoing unfavorable currency translation is expected to negatively impact the company’s top-line growth in 2017. Furthermore, intensifying competition in the contact lens will continue to increase pricing pressure for the company. Also, the stocks overvaluation reflects a relatively dull scenario that might be a cause for investors’ concern.”
CSRA (NYSE:CSRA) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $36.00 price target on the stock. According to Zacks, “CSRA is the largest pure play government IT service provider. The company’s deep domain knowledge and expertise in next-generation IT services is aiding it to win new contracts on a regular basis. This was evident from the recently announced first-quarter results. Additionally, partnerships with technology companies like Microsoft, Amazon and Oracle is a key growth driver. Moreover, anticipated improvement in federal spending is a positive for the company. However, near-term uncertainty over the renewal of Greenway contract and delay in TSA contract are headwinds. The lower recompete win rate is a concern in our view. Notably, the company has underperformed the industry on a year-to-date basis.”
Deutsche Bank AG (NYSE:DB) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $18.00 price target on the stock. According to Zacks, “Deutsche Bank underperformed the industry over the past year. The company’s second-quarter 2017 earnings significantly improved on a year-over-year basis. Low expenses and reduction in provisions were positives. However, lower revenues due to trading slump were an undermining factor. Though profitability remains threatened by a stressed operating environment and sluggish growth of the European economy, the capital raising initiative will enable the banking giant to meet regulatory requirements, investment targets across core businesses, enhance its competitiveness and ease revenue growth challenges. Though the bank’s margins continue to remain under pressure owing to low interest rates and litigation burden to result in a rise in expenses, strong capital position remains a driving factor.”
E.I. du Pont de Nemours and (NYSE:DD) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $92.00 target price on the stock. According to Zacks, “DuPont’s adjusted earnings for second-quarter 2017 topped the Zacks Consensus Estimate. Revenues also rose year over year and beat expectations. DuPont has outperformed the industry it belongs to over the past three months. DuPont is well placed to gain from its cost-cutting and productivity improvement measures. The company's aggressive actions to cut operational costs should continue to lend support to its earnings. Its agriculture business is also gaining from new product launches. The company has numerous new products in its pipeline that should contribute to top line growth. DuPont is also moving forward with its planned mega-merger with Dow Chemical, which is expected to create significant synergies.”
Diageo PLC (NYSE:DEO) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $149.00 price target on the stock. According to Zacks, “Shares of Diageo have outperformed the industry in the last six months, primarily due to its strong fundamentals, continuous innovation and focus on expansion. Also, the company’s strategic endeavors including growth via acquisitions remain noteworthy. In fact, the buyout of the U.S. fastest-growing premium tequila brand, Casamigos, is expected to boost its market share in the category. Also, the addition of Casamigos is likely to capitalize on the company’s presence in the high-growth international markets. Alongside, its existing Don Julio brand has strengthened Diageo’s position in the tequila category. Also, the company has been putting greater thrust on high-margin products to improve its overall profitability. However, currency headwinds and other macroeconomic concerns might subdue its performance, going forward.”
Estee Lauder Companies, Inc. (The) (NYSE:EL) was upgraded by analysts at Zacks Investment Research from a hold rating to a strong-buy rating. They currently have $122.00 price target on the stock. According to Zacks, “Estée Lauder continued to impress investors with better-than-expected earnings for 12 straight quarters, with the fourth-quarter fiscal 2017 being no exception. Results for the fourth quarter were mainly driven by the acquisitions of BECCA and Too Faced. The quarter also depicted strong online sales growth and an increase in almost all the brands, geographic regions and product categories. Its Leading Beauty Forward initiative has also aided inducing efficiency in cost and resource allocation. Estée Lauder also has a strong presence in emerging markets which insulates it from the macroeconomic headwinds in the matured markets. Such solid fundamentals of the company are well reflected in its share price performance, which outpaced the industry over the past one year. However, slower retail growth in Hong Kong owing to political issues has been posing worries for the company for a while now.”
Lennar Corporation (NYSE:LEN) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $58.00 target price on the stock. According to Zacks, “Lennar is one of the best-positioned homebuilders to capitalize on the housing recovery, courtesy of the diverse revenue mix, steady top-line performance, above-average order growth and improving SG&A leverage. Moreover, the company’s ancillary platforms — Rialto, Multi-Family, FivePoint and Financial Services — are evolving and should improve further. Lennar remains focused on continued improvement in the SG&A line from operating leverage and investments in technology. Also, the acquisition of WCI Communities is expected to generate strong gross margin given its portfolio of high quality, low cost land and 51 communities. Although Lennar shares underperformed the industry year-to-date, estimates have moved north for fiscal 2017 in the last 60 days.”
MGIC Investment Corporation (NYSE:MTG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $13.00 price target on the stock. According to Zacks, “Shares of MGIC Investment have outperformed the industry, year to date. 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 and be a major contributor to housing finance policy. Also, positive credit trends, low expense ratio are tailwinds. Moreover, an improving housing market and declining delinquency will boost the company’s earnings in the coming quarters. However, a competitive environment and pressure to maintain capital at required level will reduce the company’s capital flexibility. With respect to quarterly results, MGIC Investment’s second-quarter 2017 earnings beat our expectations and also improved year over year, driven by higher insurance written.”
PACCAR (NASDAQ:PCAR) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $71.00 price target on the stock. According to Zacks, “PACCAR’s earnings and revenues beat the Zacks Consensus Estimate in the second quarter. Compared with the year-ago figures, the company’s earnings per share were lower, whereas the revenue was higher. A strong balance sheet has been enabling it to invest in the development of new technologies, enhanced manufacturing facilities and after-market support. A stable market has also enabled PACCAR to project an increase in volume sales for 2017 in comparison to the previous year. However, a decline in used truck prices and a tough competition among peers in the commercial truck market remain a concern. The company’s shares have also significantly underperformed the industry it belongs to.”
Dave & Buster’s Entertainment (NASDAQ:PLAY) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $67.00 target price on the stock. According to Zacks, “Dave & Buster's shares have outpaced the industry over the past year. The company’s unique business model with increased dependence on gaming sets it apart and we expect the company’s entertainment business to carry the growth story forward. Consistent efforts to build sales and improve margins through various initiatives have also been key growth drivers. In this regard, continual opening of stores, menu innovation, launch of games, and the Fun American New Gourmet and beverage options are expected to continue boosting its top and bottom lines. In fact, the first quarter of fiscal 2017 marked the tenth successive earnings beat for the company. Estimates too have been going slightly up ahead of its fiscal second quarter earnings release. However, rising labor costs and a non-franchised business model might hurt profits, while a soft consumer spending environment in the U.S. restaurant space could impact comps.”
Royal Caribbean Cruises (NYSE:RCL) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $134.00 target price on the stock. According to Zacks, “Royal Caribbean shares have outpaced the industry year to date. The company expects strong revenue growth in 2017 given solid booking trends. Notably, the company’s sailings in the U.S., Europe, Alaska, Baltic and Asia, are likely to continue performing strongly, going forward. Royal Caribbean thus remains positioned to witness another record year and achieve its targets under the Double-Double program. While, its capacity growth should aid in meeting increased demand, ship innovation and technology investments should lead to higher yields. The company has also been successful in dealing with the volatility in fuel prices given its environmental efforts. Yet, higher costs in the near-term and adverse forex translations might hamper its profitability. Despite growth opportunities, lingering global uncertainties in key operating regions are also likely to affect its international profits.”
Shinhan Financial Group Co (NYSE:SHG) was upgraded by analysts at HSBC Holdings plc from a hold rating to a buy rating.
Peak Resorts (NASDAQ:SKIS) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Peak Resorts, Inc. is an owner and operator of ski resorts in the U.S. The resorts under the company’s umbrella offer a breadth of activities, services and amenities, including skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction and mountain biking and other summer activities. Its ski properties are located throughout the Midwest, Northeast and Southeast United States. Peak Resorts, Inc. is headquartered in Wildwood, Missouri. “
Summit Financial Group (NASDAQ:SMMF) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $24.00 price target on the stock. According to Zacks, “Summit Financial Group operates thirteen banking locations through its three wholly owned subsidiary banks, Summit Community Bank headquartered in Moorefield, West Virginia, Capital State Bank, Inc. headquartered in Charleston, West Virginia, and Shenandoah Valley National Bank in Winchester, Virginia. Summit also operates Summit Financial, LLC, a residential mortgage loan originator located in Herndon, Virginia. “
Sundance Energy Australia (NASDAQ:SNDE) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Sundance Energy Australia Limited is focused on the acquisition and development of oil and gas. Its asset primarily located in premier North American resource plays. Sundance Energy Australia Limited is headquareted in DENVER CO. “
Schneider National (NASDAQ:SNDR) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Schneider National, Inc. is a transportation and logistics services company. It provide portfolio of premier truckload, intermodal and logistics solutions. The company operates primarily in Canada, the United States and Mexico. Schneider National, Inc. is based in Green Bay, United States. “
Southern Company (The) (NYSE:SO) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “SO is one of the largest and best-managed electric utility holding companies in the U.S., dominating the power business across the southeastern region. With good rate base growth and constructive regulation, we expect it to generate steady earnings and dividend growth in the coming years through its long-term power contracts. Additionally, the utility's $12 billion AGL Resources has significantly increased its customer base and diversified its offerings. However, continued timing and cost overrun issues over two large construction projects – Vogtle and Kemper – are major overhangs. While the $20 billion Vogtle nuclear plant has gone well over budget and is years behind schedule, Southern's Kemper project suffered yet another setback with the suspension of all coal gasification operations amid additional cost burden. The interplay of these factors account for our conservative investment thesis.”
State Street Corporation (NYSE:STT) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $103.00 target price on the stock. According to Zacks, “State Street's shares have significantly outperformed the industry, over the last six months. The company remains on track to improve efficiency through its multi-year restructuring plan. Though mounting expenses (owing to higher compensation and employee benefit costs) might hurt profitability, new business wins, synergies from GE Asset Management deal, easing margin pressure and potential lesser regulations will aid top-line growth. Further, given a solid liquidity position, the company is expected to continue with its capital deployment activities.”
