Analysts’ ratings reiterations for Monday, December 30th:
Amgen (NASDAQ:AMGN) had its neutral rating reissued by analysts at Zacks. They currently have a $121.00 price target on the stock. Zacks’ analyst wrote, “Amgen reported third quarter EPS of $1.93, up 16.3% and 21 cents above the Zacks Consensus Estimate. Revenues increased 10% to $4.7 billion, topping the Zacks Consensus Estimate of $4.6 billion. At first glance, Amgen’s third quarter results look impressive with the company beating by a huge margin. However, revenues included a $155 million order from the U.S. government for Neupogen which may or may not recur in upcoming quarters. Earnings also benefited from a lower tax rate and share count. Amgen should be able to deliver on its long-term strategy based on expansion in key markets, launch of new manufacturing technologies, and pipeline development. We are also positive on the Onyx acquisition which should help make help make up for a part of the revenues that will be lost to generic competition. We expect 2014 to be important for Amgen with results on several key pipeline candidates expected.”
Popular (NASDAQ:BPOP) had its underweight rating reiterated by analysts at Stifel Nicolaus. The analysts wrote, “The Government Development Bank for Puerto Rico released its Economic Activity Index (EAI) for November, showing a decline of 5.7% Y/Y (versus 5.4% last month). Changes in this index are highly correlated with the Puerto Rico economy, with an R-squared of 90%, making this a relevant data point for investors in BPOP.” Some highlights from the report included: -”The modest improvement in the economy that we saw during the last two months has essentially stopped.”-”Until we see sustained improvement in the Puerto Rico economy, we see little reason to get more positive on the BPOP shares.”-”We expect increasing provision expense as the economy remains weak, leading to EPS that comes in well below consensus estimates.”
China Telecom (NYSE:CHA) had its neutral rating reaffirmed by analysts at Credit Suisse. The analysts wrote, “The introduction of an asymmetrical interconnect regime, under which China Telecom will pay Rmb0.04/min to China Mobile but still receive Rmb0.06/min will raise FY14 EBITDA by Rmb3.6 bn. Against this, while we would not over-exaggerate the impact of China Mobile’s launch of the iPhone in itself, the expectation of a higher total handset subsidy budget from China Mobile leads us to raise our China Telecom subsidy forecast by Rmb2.0 bn to Rmb35.0 bn and raise FY14 capex by Rmb10.0 bn to Rmb95.0 bn.”
Chesapeake Energy Corp. (NYSE:CHK) had its neutral rating reissued by analysts at Zacks. The firm currently has a $29.00 target price on the stock. Zacks’ analyst wrote, “We are maintaining our Neutral recommendation on Chesapeake Energy shares. The company reported stronger-than-expected third quarter earnings, driven by improved liquids production and higher price realization. Its focus on the liquid-rich plays like Utica Shale is expected to contribute highly to the company’s growth momentum. Going forward, Chesapeake in 2014 expects receding operating costs, lower expected commodity prices, and increased production. Although we appreciate management’s execution and ongoing cost reduction initiatives, we believe billions in asset sales are required to fund this program. Chesapeake also exhibits a weak financial profile with a huge debt balance. Embattled Chesapeake is trying hard to minimize capital expenditure through its divestiture program. As such, we see the stock performing in line with the broader market. “
China Mobile (NYSE:CHl) had its outperform rating reissued by analysts at Credit Suisse. The analysts wrote, “The introduction of an asymmetrical interconnect regime, under which China Mobile will pay Rmb0.06/min but receive only Rmb0.04/min will lower our FY14E EBITDA by circa Rmb9.0 bn. We have also revised up our total FY14 handset subsidy forecast by Rm5.3 bn following China Mobile’s agreement with Apple to sell the iPhone from 17 January 2014.” Some highlights from the report included: -”Given the extent of the FY14E earnings decline now expected, we believe a change in the payout ratio (to circa 49.0% from 43.0%) is crucial to maintain the dividend in absolute terms and support the share price.”-”While the potential for a change in interconnect rates was first mentioned in press articles in October, the Ministry of Industry and Information Technology (MIIT) on 23 December 2013 confirmed that interconnection rates in China will be amended as of 1 January 2014.”-”Following the two announcements we cut our FY14 EBITDA forecast by Rmb14.2 bn, or 5.5%. This in turn feeds through to a 9.1% reduction in our FY14 net profit forecast.”
Crocs (NASDAQ:CROX) had its buy rating reissued by analysts at Stifel Nicolaus. The analysts wrote, “While we view terms of the partnership as favorable to Blackstone, we expect their positive influence on the direction of the company (board influence with two seats, influence on recruitment of a new CEO, strategic guidance, etc.) and influence on long-run margin potential more than outweighs the earnings dilution,” the report said. “This dilution could be tempered by use of cash on hand for additional share repurchases (we estimate $200mn plus after repatriation taxes).”
Fidelity National Information Services (NYSE:FIS) had its neutral rating reiterated by analysts at Zacks. The firm currently has a $55.00 price target on the stock.
Gilead Sciences (NASDAQ:GILD) had its buy rating reiterated by analysts at Bank of America Corp.. The firm currently has a $74.45 price target on the stock, down from their previous price target of $107.00.
Hancock Holding (NASDAQ:HBHC) had its neutral rating reiterated by analysts at Zacks. They currently have a $38.50 target price on the stock. Zacks’ analyst wrote, “Hancock’s third-quarter operating earnings marginally beat the Zacks Consensus Estimate. Results were primarily aided by a marginal rise in fee income and reduced provision for credit losses as well as operating expenses. However, decline in net interest income was the downside. Further, the credit quality and capital ratios were mixed, while profitability ratios deteriorated. Going forward, we expect Hancock to be successful with respect to its organic and inorganic growth strategies, backed by a stable liquidity position. Moreover, enhanced capital deployment activities and prudent expense management are anticipated to enhance investors’ confidence in the stock. However, persistently rising operating expenses, a still low interest rate environment and increased regulations are likely to dent the company’s performance in the near term.”
Kimberly-Clark Corp. (NYSE:KMB) had its neutral rating reissued by analysts at Zacks. Zacks currently has a $110.00 price target on the stock. Zacks’ analyst wrote, “Kimberly-Clark’s third-quarter 2013 earnings of $1.44 per share beat the Zacks Consensus Estimate by 2.9% and the prior-year quarter earnings by 7.5%. The upswing in earnings was driven by organic sales growth, cost savings, favorable tax rates and lower share count, which made up for increased input costs and currency headwinds. Organic sales increased 5% on the back of volume growth and better pricing. The restructuring and cost savings program also boosted profitability. We are encouraged by the company’s decision to shed its health-care businesses to focus on its consumer and professional brands. In addition, the company’s efforts to streamline the European facilities by dissolving the diaper segment of Western and Central Europe should optimize resources. Further, the company’s regular innovations, growth initiatives and a strong international presence make the stock attractive. However, slow economic recovery, increased input and marketing expenses and currency headwinds keep us on the sidelines with a Neutral recommendation. “
Lions Gate Entertainment Corp. (NYSE:LGF) had its outperform rating reiterated by analysts at Barrington Research. The firm currently has a $41.00 target price on the stock. The analysts wrote, “The second film will likely top the domestic total and settle in at around $450 million overseas, bringing its global aggregate figure to around $875 million, in a range of $850-900 million, a more than 25% gain over the original,” the report said. “The film could potentially crack the all-time top ten domestic films.” Some highlights from the report included: -”We are slightly increasing our third quarter figure to $0.63 and full-year figure to $1.20 to reflect the success of The Hunger Games: Catching Fire.”-”Lionsgate’s one-third interest in EPIX, with EBITDA potential increasing to roughly $100 million from about $80 million with this deal, implies a substantial contribution to corporate targets and overall value.”-”Our $41 price target now assumes an EV/Sales multiple of 2.3x our fiscal 2015 estimates and corresponds to an EV/EBITDA multiple of about 15.5x.”-”The stock traded up to a high of nearly $38 several weeks prior to the Hunger Games premiere, but then declined more than 20% and is now trading 18% below that peak level.”
MasterCard (NYSE:MA) had its buy rating reiterated by analysts at TheStreet. The analysts wrote, “MasterCard Incorporated (MA) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. The company’s strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, increase in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.”
McDermott International (NYSE:MDR) had its neutral rating reiterated by analysts at Zacks. They currently have a $9.25 price target on the stock. Zacks’ analyst wrote, “We are maintaining our Neutral recommendation on McDermott International. Given its geographic footprint in high-growth regions, technology leadership and efficient execution skills, MDR is poised to benefit from strong industry fundamentals for offshore construction activities through 2014 and beyond. We believe order flow and backlog for its products and services will continue to be healthy and trend higher in the near-to-medium term. Additional positives include growing international operations and a solid balance sheet. However, several factors will continue to weigh on results, including steep operating costs, an erratic earnings trend over the last few quarters and uncertainty regarding the timing of big awards. As such, we expect its growth potential to be restrained.”
MannKind Corp. (NASDAQ:MNKD) had its neutral rating reissued by analysts at Zacks. Zacks currently has a $5.50 target price on the stock. Zacks’ analyst wrote, “MannKind’s third quarter 2013 net loss of $0.17 per share was narrower than the year-ago loss of $0.22 but wider than the Zacks Consensus Estimate of a loss of $0.14. We expect investor focus to remain on MannKind’s lead candidate Afrezza. The company resubmitted the NDA for Afrezza in the U.S. supported by positive results from the Affinity studies. A final decision from the U.S. regulatory body is expected by Apr 15, 2014. Meanwhile, we remain concerned about the company’s over dependence on Afrezza. Any setback related to the diabetes candidate will be catastrophic for MannKind. We see limited upside from current levels and retain our Neutral stance on the stock.”
Prosperity Bancshares (NYSE:PB) had its neutral rating reaffirmed by analysts at Zacks. The firm currently has a $66.00 target price on the stock. Zacks’ analyst wrote, “Prosperity Bancshares’ third-quarter earnings marginally beat the Zacks Consensus Estimate. Results were aided by higher net interest income, partially offset by decreased non-interest income as well as a rise in operating expenses and provision for credit losses. Further, improvement in capital and profitability ratios as well as loan and deposit balances were the tailwinds for the quarter. We believe continued synergies from ongoing acquisitions and organic expansion will benefit the company going forward. However, a still low interest-rate environment, sluggish economic growth, significant exposure to the real estate loan portfolio, and stringent regulations are expected to dent the company’s financials in the near term.”
Spectra Energy Corp. (NYSE:SE) had its buy rating reiterated by analysts at Argus. Argus currently has a $34.92 price target on the stock, down from their previous price target of $38.00. They noted that the move was a valuation call. The analysts noted that the move was a valuation call.
VF Corp. (NYSE:VFC) had its buy rating reissued by analysts at DA Davidson. They currently have a $71.00 target price on the stock, up from their previous target price of $61.00. The analysts wrote, “With “normal” winter weather unfolding across the U.S., after two unusually warm and dry seasons, we believe it has been a solid start to the outerwear season. This should drive upside capacity to TNF brand performance through higher direct-to-consumer (DTC) sales as well as an overall healthy pricing environment.” Some key points from the report included: -”Our full year revenue and EPS estimates are now $12.337 billion and $3.13 and $13.241 billion and $3.55, respectively.”-”We believe continued organic growth and margin performance, as well as likely acquisitions will drive share appreciation.”
Westamerica Bancorp (NASDAQ:WABC) had its neutral rating reissued by analysts at Zacks. They currently have a $60.00 target price on the stock. Zacks’ analyst wrote, “Westamerica’s third-quarter 2013 earnings marginally missed the Zacks Consensus Estimate. Results reflected a substantial fall in net interest income. Further, capital and profitability ratios as well as loan balances declined. However, increased non-interest income and lower operating expenses were the positives for the quarter. Moreover, the recent hike in quarterly cash dividend depicts the company’s attempt to enhance enhancing shareholder value. However, we do not expect any significant improvement in interest income in the near term due to a still low interest rate scenario. Nevertheless, we anticipate continued synergies from the company’s conservative credit culture and stable balance sheet. Further, once the market rebounds to a more conducive operating environment, the company will be able to capitalize on growth opportunities.”
This article (Analysts’ Ratings Reiterations for December, 30th (AMGN, BPOP, CHA, CHK, CHL, CROX, FIS, GILD, HBHC, KMB)) was originally developed by and is property of American Banking News.
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