Investment Analysts’ Upgrades for September, 12th (AMTD, CCL, CFG, CINF, CLB, COST, DFS, EBKDY, FII, FIT)
TD Ameritrade Holding Corporation (NASDAQ:AMTD) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $49.00 price target on the stock. According to Zacks, “Shares of TD Ameritrade have outperformed the industry in the past year. Yet, the company’s earnings surprise history is not that impressive. It surpassed the Zacks Consensus Estimate for earnings in only one of the trailing four quarters. We remain cautious of the elevated costs, which are likely to weigh on the financials. However, the company recorded a rise in average client trades per day in the fiscal third quarter with the trend continuing in the first month of the current quarter, indicating trading activity improvement. Further, its deal to acquire Scottrade is likely to be accretive to earnings per share (EPS) in double digits. Also, TD Ameritrade’s steady capital deployment activities and revenue growth are encouraging. Moreover, easing margin pressure is another tailwind.”
Carnival Corporation (NYSE:CCL) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $76.00 target price 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 is likely to further drive growth. 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. Meanwhile, estimates have been stable lately ahead of its fiscal third quarter earnings release and the company has positive record of earnings surprises in recent quarters.”
Citizens Financial Group (NYSE:CFG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $37.00 target price on the stock. According to Zacks, “Shares of Citizens Financial have outperformed the industry year to date. This performance was supported by the company’s impressive earnings surprise history. It hasn’t missed the Zacks Consensus Estimate for earnings in any of the trailing four quarters. It remains on track to implement TOP III efficiency initiatives, which are expected to boost earnings performance further. The company also launched TOP IV initiatives which are expected to achieve pre-tax benefit of $90-$105 million by the end of 2018. Following the Fed rate hikes so far, margin pressure seems to be easing. Also, the company continues to benefit from improving loans and deposit balances, and is well positioned to grow further as the U.S. economy is gaining traction. However, higher costs resulting from pending legal hassles remain a major concern.”
Cincinnati Financial Corporation (NASDAQ:CINF) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $86.00 price target on the stock. According to Zacks, “Shares of Cincinnati Financial have outperformed the industry, quarter to date. Moreover, the company witnessed its 2017 and 2018 estimates moving north over the last 60 days. Cincinnati Financial’s low leverage, ample capital, consistent cash flow generation, favorable reserve release, share repurchases and consistent dividend hikes should drive growth. Management is appointing agencies and expanding product offerings to ramp up the business. Moreover, the company continues to see net investment income growth and expects to retain the momentum in the near term as well. However, the company’s exposure to cat losses and a continued turmoil in group benefits associated with the ACA are headwinds. The insurer has replaced its existing catastrophe bond program with a new collateralized reinsurance to mitigate the loss.”
Core Laboratories N.V. (NYSE:CLB) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Core Laboratories boasts of a unique business model, disciplined financial management and technological expertise. We also like CLB's leadership position in the reservoir optimization niche, along with its global footprint and deep portfolio of proprietary products and services. CLB’s low asset intensive operations and limited capex needs allow it to generate substantial free cash flows and operate profitably even in this low commodity price environment. However, we are concerned of the company’s high leverage and paucity of deepwater drilling orders which might hamper the specialized service provider’s near-term results. Therefore until the commodity price environment improves, we take a cautious stance on the prospects of the stock.”
Costco Wholesale Corporation (NASDAQ:COST) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $176.00 target price on the stock. According to Zacks, “Costco continues to be one of the dominant retail wholesalers based on the breadth and quality of merchandise offered. The stock has outpaced the industry in a year. This came on the backdrop of continued sturdy comps performance and upbeat results in third-quarter fiscal 2017, thereby sidelining the woes, which have gripped the brick-and-mortar retailers for some time now. Major chains are grappling with soft store and mall traffic as consumers choose to shop online. But Costco seems somewhat unfazed by tough retail scenario. We believe that the hike in annual membership fees and increased penetration of Citi Visa co-brand card program will also benefit the stock in the near term. We are also encouraged by Costco’s expansion strategy, as it remains committed to opening new clubs and expanding e-Commerce capabilities. However, stiff competition and cautious consumer spending remain causes of concern. Of late, estimates have been stable.”
Discover Financial Services (NYSE:DFS) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Discover Financial’s consistent revenue growth boosts margins. The company’s Direct Banking business continues to deliver strong results. Soaring card sales volume has helped it establish a strong position in the industry. The company’s effective capital management paves the way for several growth-oriented investments. However, its weak Payment Service segment continues to hurt profitability. It has also been incurring expenses in order to compete with other credit card issuers, attract and retain customers, and increase card usage from past many quarters. The company has seen the Zacks Consensus Estimate for 2017 and 2018 earnings being revised downward over the last 30 days. The shares have underperformed the industry in last one year.”
Erste Group Bank AG (OTC:EBKDY) was upgraded by analysts at Kepler Capital Markets from a hold rating to a buy rating.
Federated Investors (NYSE:FII) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $30.00 target price on the stock. According to Zacks, “Shares of Federated underperformed the industry over the last six months. Yet, the company boasts an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in all the trailing four quarters. Rise in interest rates and lower fee waivers are expected to aid top-line performance, moving ahead. Also, Federated’s inorganic growth strategies encourage us. Further, the company’s active involvement in capital deployment activities continues to inspire investors’ confidence. However, strict regulations for investment management companies remain a headwind.”
Fitbit (NYSE:FIT) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $7.00 price target on the stock. According to Zacks, “Fitbit Inc. is a manufacturer of wearable fitness tracking devices. The company reported second-quarter 2017 adjusted loss of 18 cents per share, which was narrower than the Zacks Consensus Estimate. Over the last year, the stock has underperformed the industry it belongs to. Fitbit’s growth has been slowing down with smartwatches outshining the fitness wearable category, influx of new wearables, lack of upgrades among existing users and lackluster growth in the Asia Pacific region. Management has taken some recovery initiatives that include executive shakeup and cost structuring.”
Hess Corporation (NYSE:HES) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Hess is among the leading producers of crude in the Bakken oil shale play in North Dakota. The company has interests in the best areas of the play. With the projection of healthy oil price following the possibility that OPEC might extend the production cut deal beyond March 2018, we believe that Bakken play should contribute to the company’s production growth in the long run. Hess declared new oil discovery from the Payara-1 well located off the coast of Guyana. The project may add significant value in the coming years. However, the firm’s long-term debt has increased significantly since the beginning of 2014 reflecting balance sheet weakness. On top of that, it probably is unfeasible for Hess to fund growth projects as its free cashflow has been negative for almost two years. Moreover, the company has lost 34.4% year to date, underperforming the industry’s 18.7% decline.”
Imax Corporation (NYSE:IMAX) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “IMAX has recently inked multiple deals to expand its global presence. The latest deal was inked with Cineplex with the objective of expanding further in Canada. The company's efforts to expand into China is a further positive. IMAX recently inked a sales agreement with Shanghai Bestar Cinemas Management Co. for seven new IMAX theatres across Tier Two and Tier Three cities in China. The company's decision to announce a new buyback program worth up to $200 million is also impressive. However, the company has delivered a below-par box office performance over the last few months. In fact, shares of IMAX have underperformed its industry on a year-to-date basis, due to soft box office revenues. Additionally, the disappointing Memorial Day weekend turnout has hurt the stock. Also, the substantial presence outside the U.S. exposes IMAX to foreign currency exchange rate risks.”
Martin Marietta Materials (NYSE:MLM) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Martin Marietta is a leading supplier of construction aggregates used for construction of highways, infrastructure projects and residential, commercial and industrial building development. The company’s string of acquisitions, divestitures and attractive shareholder returns are encouraging. Increased activities in the non-residential and residential markets can be expected to boost demand. However, abnormally wet weather conditions in many markets are marring Martin Marietta’s prospects. Also, shares of Martin Marietta underperformed its industry year to date.”
NRG Energy (NYSE:NRG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $27.00 target price on the stock. According to Zacks, “Shares of NRG Energy have gained more than the industry in the last six months. NRG Energy is gaining from its asset drop-down program that is in sync with its long-term growth strategy. Its cost saving measures, debt reduction plans and expansion of renewable operations should further drive growth. It does not depend ona single customer to generate revenues, therefore, migration of customers to other operators have lesser impact on its performance. However, stringent environmental regulations, fluctuating weather conditions and intense competition in the wholesale power markets are headwinds.”
Occidental Petroleum Corporation (NYSE:OXY) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Year to date loss of Occidental Petroleum is narrower than the industry it belongs to. Occidental will benefit by producing more oil from the Permian Resources and concentrating on high margin production region. The company generates stable cash flow and its Chemical plant will further improve its cash flow. However, the recent weakness in oil prices could jeopardize Occidental‘s plans to achieve cash flow breakeven. Occidental, like other oil and natural gas companies, faces the risks of cost overruns and development interruptions due to delays in drilling and other approvals, property or border disputes, and equipment failures. The company also had to shut down operation in Texas to ward off the impact of Hurricane Harvey that will adversely impact its earnings.”
Restaurant Brands International (NYSE:QSR) (TSE:QSR) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $73.00 target price on the stock. According to Zacks, “Restaurant Brands shares have widely outpaced its industry over the past year. Going forward, various sales-boosting initiatives like improving services, reimaging restaurants, menu innovation along with continued expansion should drive the top line. In fact, the company believes that there is opportunity to grow both the Tim Hortons and Burger King brands across the world. The acquisition of Popeye’s also bodes well as it adds a solid brand to its portfolio, which should further ramp up unit growth and aid in reducing costs. Moving ahead, the company aims to continue focusing on guest satisfaction and franchisee profitability, which it believes will drive long-term growth of brands. However, rising costs along with negative currency translation might dent the company’s profitability, while a soft consumer spending environment could keep comps under pressure.”
Royal Dutch Shell PLC (NYSE:RDS.A) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Royal Dutch Shell shares are up 4.5% in the year-to-date period vs. the 3.3% loss for the broader industry. The integrated behemoth's upstream unit have benefited from the steady oil price recovery, while production contribution of BG assets continues to be strong. The Hague-based supermajor has also able to reduce operating costs and progress on its large divestment program. Importantly, the Anglo-Dutch company generated a surge in cash flows during the most recent quarter, allowing it to cut debt and cover its cash dividend. However, with oil staying below the psychologically-critical $50 threshold, Shell's near-to-medium term revenue outlook remains cloudy. We are also apprehensive that the group's disposal program could affect production, which fell 11% sequentially in second quarter. Hence, we advise investors to wait for a better entry point before buying shares in Europe's largest oil company.”
Sodexo SA (OTC:SDXAY) was upgraded by analysts at Citigroup Inc. from a neutral rating to a buy rating.
Smurfit Kappa Group PLC (OTC:SMFKY) was upgraded by analysts at Goldman Sachs Group, Inc. (The) from a neutral rating to a buy rating.
Synovus Financial Corp. (NYSE:SNV) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $48.00 price target on the stock. According to Zacks, “Shares of Synovus outperformed the industry year to date. This price performance is backed by impressive earnings surprise history. The company has surpassed the Zacks Consensus Estimate for earnings in all the trailing four quarters. We believe the company’s organic and inorganic growth strategies position the company well for the future. Further, Synovus’ focus on balance-sheet growth encourages us. The company’s impressive capital deployment activities reflect its strong capital position. Though escalating expenses remain a concern, the margin pressure also seems to be easing on the back of gradually improving rate scenario.”
Suncor Energy (NYSE:SU) (TSE:SU) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “Suncor Energy's shares have gained 26.8% over the last 12 months, handily outperforming the Zacks Canadian Oil & Gas Integrated industry, which was up just 2.7% over the same time period, as well as key rival Canadian Natural Resources. SU's last reported quarter saw production rising strongly on the back of its transactions to gain a majority stake in the massive Syncrude oil sands project. Importantly, SU's success in reducing cash costs have magnified the effects of rebound in oil prices. An attractive dividend yield and plans for share buyback are other positives in the Suncor story. However, the operational challenges and unplanned outages in its Syncrude project, may affect its cash flows adversely. As it is, extracting crude from the oil sands is a costly affair and as such, hampers profit margins. Therefore, we see limited upside for SU scrip.”
Tahoe Resources (TSE:THO) (NASDAQ:TAHO) was upgraded by analysts at BMO Capital Markets from a market perform rating to an outperform rating. BMO Capital Markets currently has C$10.00 target price on the stock, up from their previous target price of C$7.00.
Zurich Insurance Group (OTC:ZURVY) was upgraded by analysts at J P Morgan Chase & Co from a neutral rating to an overweight rating.
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