Research Analysts’ upgrades for Monday, November 28th:
A.O. Smith Corp. (NYSE:AOS) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $55.00 target price on the stock. According to Zacks, “A.O. Smith has an excellent earnings surprise history, beating estimates each time in the trailing four quarters. The company’s dominant foothold in the North American water heater market, along with thriving prospects in residential and commercial boiler markets are expected to boost growth. Sales of residential and commercial boilers are largely driven by innovation by Lochinvar. Going forward in 2016, the company projects growth rate of 8% for total Lochinvar-branded products. Also, the recent acquisition of residential water treatment firm – Aquasana – is expected to fortify the geographic footprint. The company expects its China operations to maintain momentum and experience about 15% growth rate in local currency in 2016. However, foreign currency fluctuations, escalating SG&A & other corporate expenses and higher steel prices are likely to act as significant headwinds in the forthcoming quarters.”
Asos Plc (OTCMKTS:ASOMF) was upgraded by analysts at Goldman Sachs Group Inc. from a neutral rating to a buy rating.
Celldex Therapeutics (NASDAQ:CLDX) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $5.00 price target on the stock. According to Zacks, “Celldex’s third-quarter results were encouraging with the company reporting narrower-than-expected loss and revenues surpassing expectations. The company’s efforts to build its immuno-oncology pipeline are also impressive. The upcoming Kolltan acquisition bodes well for the company. Meanwhile, Celldex’s lead pipeline candidate, glembatumumab vedotin, is in mid-stage development for different types of cancer. We are encouraged by Celldex’s partnership agreements with big players like Bristol-Myers and Roche. However, with no approved product in its portfolio, Celldex has to depend entirely on product development and licensing agreements, contracts and grants for revenues. We are also concerned about the early-to mid- stage nature of its pipeline. With a number of ongoing studies, any development or regulatory setback would weigh heavily on the stock. Stiff competition in the immuno-oncology space remains a threat as well.”
Donaldson (NYSE:DCI) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Donaldson has had a choppy earnings history in recent times, having beaten estimates twice in the trailing four quarters for as many misses. Going forward, the company's strategic restructuring actions and improved customer relations are expected to boost operational efficiency. Donaldson has completed its ERP implementation program that is expected to be conducive to expense run rate by a few millions. Moreover, first-fit program wins, aftermarket growth and constant geographic expansion are likely to act as catalysts in the coming quarters. However, on the flip side, issues like persistent weakness in key markets, including agriculture, oil and gas, mining equipment, decline in the disk drive business and volatility in sales of Gas Turbines, are anticipated to act as major headwinds going forward. This apart, currency fluctuations, intensifying competition and commodity price fluctuations, add to the company’s concerns.”
Dun & Bradstreet Corp. (NYSE:DNB) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Dun & Bradstreet is expected to benefit from its high-margin business model and strong product portfolio. DNB’s partnerships with big players have also helped it bring many more customers into the fold. Plus, D&B is well-positioned to gain from its strategic acquisitions and alliances. The company’s focus on expanding analytics capabilities is also a positive. Though D&B’s Americas business remains strong, but the international business continues to be a drag on financials. Stiff competition, weak DNBi business and high debt are other areas of concerns.”
Hilltop Holdings (NYSE:HTH) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $32.00 price target on the stock. According to Zacks, “Hilltop Holdings’ shares have significantly outperformed the Zacks categorized Banks & Thrifts industry, year to date. Given the strong balance sheet position, the company is expected to grow inorganically over time. Further, PrimeLending business is expected to support the company’s bottom line. Also, the company’s capital deployment activities through share repurchases and initiation of dividend payments are commendable. Nevertheless, the company remains exposed to catastrophic events, high competition and rising expenses.”
Infineon Technologies AG (OTCMKTS:IFNNY) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Infineon's fourth-quarter fiscal 2016 results disappointed us. The company missed the Zacks Consensus Estimates on both lines. Notably, the stock price has underperformed the broader market on a year-to-date basis. However, the fiscal 2017 guidance was positive. We believe that Infineon has significant growth opportunities in the Automotive market due to growing hybrid and fully electric vehicles globally, including China. Growing demand for its insulated-gate bipolar transistors (IGBT) for partially and fully electric cars along with radar chips are worth mentioning in this regard. Moreover, the company’s focus on developing energy-efficient solutions will be a key catalyst going ahead. However, we believe slowdown in smartphone sales can prove to be a major drag. Additionally, the cyclical nature of the semiconductor industry, and price erosion is likely to be major headwinds going ahead.”
KP Tissue (TSE:KPT) was upgraded by analysts at RBC Capital Markets from a sector perform rating to an outperform rating. They currently have C$17.00 price target on the stock, up from their previous price target of C$15.00.
Lululemon Athletica (NASDAQ:LULU) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Lululemon remains prone to unfavorable currency movements, which also played spoilsport in the fiscal second quarter 2016. Despite a heartening outlook for the fiscal and the third quarter, the persistence of currency woes can hurt future results. Moreover, the fading popularity of athleisure wear is likely to take a toll on the company’s performance as denims are back in vogue with new styles and patterns attracting shoppers. Intense competition from other players also remains a headwind. However, estimates have been stable lately, ahead of the company's third quarter earnings release. Also, Lululemon exhibits immense long-term growth opportunity based on its potential to expand square footage and enhance its business globally. The company’s new strategy that outlines fou
r major areas of growth, aimed at doubling revenue and more than doubling earnings by 2020, also bodes well.”
The New York Times (NYSE:NYT) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Shares of The New York Times Company have outperformed the Zacks Categorized industry year-to-date. The company is diversifying its business, adding new revenue streams, strengthening its balance sheet and restructuring its portfolio. It had offloaded assets in order to re-focus on its core newspapers and pay more attention to its online activities. These helped the company to post positive earnings surprise in third-quarter 2016, following an earnings miss in the preceding quarter. However, bottom line continued to decline on a year-over-year basis. Top-line also slid and fell short of the estimate. The quarter marked an increase in digital subscribers and rise in circulation as well as digital advertising revenues but a fall in print advertising revenue. Total advertising revenue fell 7.7% during the quarter. Management expects total advertising revenue in the final quarter to decline at a rate equivalent to that of the third quarter.”
Office Depot (NASDAQ:ODP) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $5.50 price target on the stock. According to Zacks, “After four consecutive quarters of negative earnings surprises, Office Depot posted an earnings beat in third-quarter 2016. However, it continues to battle a dismal top line that missed the estimate for the ninth straight quarter. Persistent weakness in the office products sector, technological advancements and stiff competition from online retailers are weighing on the company’s performance. Both the top and bottom lines continue to decline year over year. Nevertheless, management has undertaken a strategic review of business operating model, growth prospects and cost structure to bring itself back on the growth trajectory and decided to sell its international operations. These endeavors will take time to reap benefit. For now management anticipates total sales to be lower in fourth-quarter 2016 versus 2015 due to store closures, business disruption owing to merger related issues and tough market conditions.”