These reports, excerpted and edited by Barronâ€™s, were issued recently by investment and research firms. The reports are a sampling of analystsâ€™ thinking; they should not be considered the views or recommendations of Barronâ€™s. Some of the reportsâ€™ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.
Outperform Price $209.02 on July 30
by Evercore ISI
Apple reported an impressive June quarter and guided the September quarterly ahead of expectations. We think that an impressive print like this highlights Appleâ€™s platform model and ability to show revenue growth, despite double-digit iPhone sales declines.
Key positives: 1) China showed year-over-year growth, indicating there are levers at Appleâ€™s disposal to drive sales higher. (Is this a strategy that could be scaled globally?) 2) Gross-margin guidance for the September quarter is up, quarter over quarter, suggesting momentum. (Upside for fiscal 2019?) 3) Revenue diversification is working, with services up 18% in constant currency; â€œotherâ€ up 50%, Y/Y; and iPhones accounting for sub-50% of sales for the first time since launch. 4) Capital allocation and buyback momentum remain strong. We are raising our price target to $238 [from $227]. The multiple is unchanged at 18 times fiscal-2020 earnings per share.
Overweight Price $76.30 on Aug. 1
Saiaâ€™s second-quarter 2019 results demonstrated to us that its expansion into the Northeast has reached an inflection point. The [shipping and logistics] company reported its best quarterly result since second-quarter 1994. Saiaâ€™s geographic expansion and yield initiatives are creating a compelling and differentiated story within the transportation sector, which we think will warrant multiple expansion. While the stockâ€™s reaction of about 10% on Wednesday underscores that we werenâ€™t the only ones who appreciated the second-quarter beat and positive go-forward commentary, we see the potential for meaningful further upside to our estimates and the stock price, as long as the economy holds together. Our new $96 price target (up from $75 previously) represents 18.5 times our updated 2020 EPS forecast.
Outperform Price $26.12 on July 31
by Macquarie Research
Altice delivered impressive [second-quarter key performance indicators], just above our expectations, and raised 2019 revenue guidance. We expect its industry-defying cable trends to continue. Altice Mobile is poised to launch any day now, and attractive pricing should drive outsize growth. We model modest revenue increases building from the third quarter, and mobile breaking even a year from now. Price target: $32.
United Therapeutics UTHR-Nasdaq
Neutral Price $79.24 on July 31
by H.C. Wainwright
The clinical development of Unituxin for small-cell lung cancer seems to have gathered [less] attention than it deserves. Unituxin [was] approved for high-risk pediatric neuroblastoma in 2015, and is currently generating notable sales of about $100 million. Assuming an average price of $144,000 a year in small-cell lung-cancer treatment (we conservatively assume once-a-month dosing), about 20% penetration in the U.S. and European Union should allow United Therapeutics to add about $2.6 billion to its product sales. [However,] we believe that the company lacks internal expertise in oncology-drug development. The more we dig around Unituxin, the less confident we are about the anticipated data readout of [a study of the drug scheduled] in 1H20.
New York Community Bank
Market Perform Price $11.59 on July 31
by Raymond James
We are maintaining our Market Perform rating on the bankâ€™s shares, following second-quarter 2019 results that matched both our and consensus expectations. Relative to our model, lower revenues were offset by lower expenses (operating and provision). Notably, the bankâ€™s core margin contracted by six basis points [each equal to 1/100th of a percentage point] sequentially, below managementâ€™s three-basis-point guidance, and management guided to another one to two basis points of compression in third-quarter 2019. That said, management now expects margin expansion in fourth-quarter 2019 (and every quarter in 2020), as it believes that it has experienced a trough in earning asset yields and a peak in funding costs, which should certainly bode well for margins in a falling-rate environment.
Advanced Micro Devices
Hold Price $30.45 on Aug. 1
by Benchmark Research
We are initiating coverage of AMD with a Hold rating. We expect AMD to continue to benefit from a robust product cycle. [But] AMD shares are trading at 29.7 times the consensus 2020 EPS estimate of $1.03, and on an enterprise-value basis, four times the consensus 2020 sales estimate, which is close to AMDâ€™s historical peak EV/sales multiple of 4.7 times. On a price/earnings basis, AMD shares are trading at a significant premium to the semiconductor peer-group average multiple of 21.7 times.
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