Are the violent stock market movements here to stay? Investors see plenty of cause for worry, in rising coronavirus case rates that many say portend a second wave of the pandemic. In addition, some states are extending lockdown policies. That said, watching the markets for the past few months, Oppenheimer’s asset management chief strategist John Stoltzfus sees reasons for a bullish outlook. He believes that volatility will rule through 2H20, but that markets will start rising again at the end of the year. Stoltzfus says that when the bull comes to run, investors will jump on, arguing they are “waiting for some catalyst to cross the tape that will justify taking near-term profits without FOMO…” Among the catalysts that Stoltzfus sees as likely is the November election. Whatever the outcome, he believes that the resolution of uncertainty once the results are in will put investors in a buying mood. Stoltzfus has recommendations for that, too: “We like consumer discretionary. We also like industrials, because industrial stocks today use a lot more technology than ever before…” Stoltzfus isn’t alone at his firm in pointing out reasons for a bullish market stance. Oppenheimer’s stock analysts have been busy putting the strategist’s tips into concrete recommendations. Using the TipRanks database, we’ve pulled up the details on three of those calls. Each offers investors plenty of upside, starting at 30%; let’s find out what else makes them so compelling. Ulta Beauty, Inc. (ULTA) Stoltzfus is bullish on the consumer discretionary segment, and so, first on our list is a cosmetic company. Ulta is a chain of beauty care stores. The company boasts an $11 billion market cap – a testament to the strength of the beauty sector – and nearly 1,200 locations spread across all 50 states. As part of its response to the COVID-19 pandemic, the company offered a curbside pickup service at over 700 locations. Even so, the Q1 ‘corona quarter’ was tough on Ulta. The company lost $1.12 per share, and the stock price is still down 35% from its February peak. Lower sales during the period of shutdown policies and lower margins during the quarter were the main drivers of the poor performance. This is borne out by comp sales, which fell 35% during Q1 compared to a gain of 7% in the prior-year quarter. As a liquidity measure, Ulta drew some $800 million from its $1 billion credit facility during the corona crisis. The funds were used for general operation. In a positive note, the company has been reopening stores since mid-May, and is forecasting a positive – albeit modest – net profit for Q2. Oppenheimer’s Rupesh Parikh sees the current environment as a buying opportunity for investors. He writes, “With the resurgence of coronavirus infections and likely conservative planning from the ULTA management team, we are assuming a slower 2H20 recovery. Consistent with our recent views, we believe investors should take advantage of weakness in accumulating shares and not chase strength. We believe ULTA should emerge with stronger share gains driven by omni-channel investments and department store challenges post-crisis.” To this end, Parikh backs his Buy recommendation with a $270 price target, suggesting a 38% upside potential for the stock in the coming year. (To watch Parikh’s track record, click here) Overall, ULTA gets a Strong Buy rating from the analyst consensus, based on 12 Buys and 4 Holds given in recent weeks. The general thought is that this company is fundamentally sound despite the pandemic. Shares are selling for $195.99, and the average price target of $264.93 implies a one-year upside potential of 35%. (See Ulta stock analysis on TipRanks) WillScot Mobile Mini Holdings (WSC) Next up, WillScot is a holding company with subsidiaries involved in the modular office space sector. This unusual niche is probably more familiar to you than you realize; modular offices are commonly seen at construction sites, where modified containers are used as on-site office space. WillScot produces the luxury version. The company saw a unique opportunity arise during the coronavirus pandemic, as a sudden need arose for temporary testing sites, quarantine units, and the like. It was able to use that need to its advantage. Besting the consensus estimate, WSC reported a 9-cent per share profit. Along with the better-than-expected quarter, WillScot also completed an offer of $650 million in senior secured notes, a move that improves liquidity and gives the company flexibility in dealing with the ongoing public health crisis. The note offering also allowed WillScot to complete a merger with Mobile Mini during the second quarter. The deal created a combined company worth $6.6 billion, with a leading market share in the North American modular sector. Scott Schneeberger, a 4-star analyst with Oppenheimer, points out that WillScot’s business model lends itself to recurring revenue over the long-term, keeping the company resilient. He writes, “Its rental assets typically remain on-site through project-end even if the project were suspended a few months. WSC indicated in early-May no material COVID-19 impact to the lease duration/renewal/payment activity of its existing uniton-rent installed base.” In line with his positive view of the company’s business, Schneeberger rates WSC a Buy, and increases the price target to $17. This new target implies an upside potential of 38% for the coming 12 months. (To watch Schneeberger’s track record, click here) Wall Street is slightly more bullish than Schneeberger. The Strong Buy analyst consensus rating is unanimous, based on 5 Buy ratings, and the average price target comes in at $18. This suggests a one-year upside potential of 46% for the stock. (See WillScot stock analysis on TipRanks) DraftKings, Inc. (DKNG) Last on our list is DraftKings, the online venue for sports fantasy leagues. In a way, DraftKings has come into its own during the coronavirus crisis. Major sports have been mostly halted for now – but when they start up, they will do so without fans. This has already happened in German soccer. That will leave fantasy leagues, which are already popular, as the main outlet for fan participation. At least that’s the thought process behind the company’s stock surge which began in May. Despite a net loss of $74 million in Q1, DKNG shares are up 80% since February 19, dramatically outperforming the broader markets. In its earnings report, the company stated that it does not expect a long-term income hit from the pandemic, and has not changed its plans for 2H20. As its business is conducted entirely online, direct customer contact is not a problem. Additionally, with both the NBA and Major League Baseball planning truncated regular season play for the second half of the year, DraftKings has reason to believe that the fantasy leagues will return to play. 5-star analyst Jed Kelly initiated coverage of DKNG for Oppenheimer with a Buy rating. He specifically cited a new niche as an opportunity for the company: legalized in-game sports betting. Kelly says, “Legalized sports betting and iGaming markets are in their very early stages of growth, and we see an $18 billion revenue opportunity at scale, that also benefits from a sophisticated in-game wagering market.” Noting that DraftKings already operates online and in-game, he sees the company as having a uniquely strong position here. Kelly backs his Buy rating with a $46 price target, suggesting a robust 42% upside potential for the stock. (To watch Kelly’s track record, click here) DKNG is trading at $32.43 now, and the average price target of $48 implies a 48% upside potential. The analyst consensus here is a Strong Buy, based on 11 reviews breaking down as 10 Buys and 1 Hold. (See DraftKings stock analysis on TipRanks)
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Tesla (TSLA) stock soared past $1,400 a share today, and talk about whether it’s in a bubble has been reignited. Several analysts have weighed in on the EV maker today, and even some bears are starting to say that the shares could keep rising. However, one author suggests that Tesla stock is indeed in a bubble […]
Mesoblast has developed a cellular therapy that may significantly reduce deaths among the most severely sick COVID-19 patients. CEO Dr. Fred Grossman joins Yahoo Finance’s On the Move to discuss what this development could mean in the fight against the virus.Not all biotechs are highflyers in 2020. Despite some pharma companies’ elevated coronavirus driven valuations, some have had to settle for more pedestrian performances.Take for instance biotech Biogen (BIIB). The large cap has had a middling 2020 so far, with shares down by 6% since the turn of the year.Might that be about to change in the second half of the year, following a recent encouraging development?On Wednesday, Biogen disclosed it had submitted a BLA (biologics license application) to the U.S. Food and Drug Administration (FDA) for its potential Alzheimer treatment, aducanumab.Focus now turns to the FDA’s reaction. The agency has 60 days to approve the filing, following which (if approved), the application will be reviewed. Biogen hopes the drug will be granted priority status due to the disease’s unmet medical need. This means the review could be completed within 6 months instead of the 10 months it normally takes. J.P. Morgan analyst Cory Kasimov is not entirely convinced the treatment will make it through the whole regulatory process. The approval prospects for aducanumab, he notes, are “little better than a coin flip,” and he estimates the possibility of success at 55%. After conducting a poll among 30 US Alzheimer’s physicians, Kasimov argues aducanumab remains a controversial subject among industry professionals.“In short,” said the 5-star analyst, ”The results suggest that the majority of docs don’t believe that aducanumab should be approved… but plan to prescribe the drug to a substantial number of early Alzheimer’s patients if it reaches the market. With safety not being a major sticking point for most of these respondents, we suspect the regulatory debate is likely to come down to whether perceived tolerability + the unmet need win out over a questionable efficacy data + trial conduct/analysis.”All in all, Kasimov reiterated a Hold rating on BIIB shares along with a $293 price target, which implies a modest 5% upside. (To watch Kasimov’s track record, click here)Overall, based on Biogen’s Hold consensus rating, the rest of the Street agrees. The breakdown consists of 8 Buys, 13 Holds and 4 Sells, and is accompanied by a $312.16 price target. There’s upside of 11%, should the figure be met over the following months. (See Biogen stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Barbados has a proposition for those working from home that is hard to pass up.
American Hotel & Lodging Association CEO Chip Rogers joins Yahoo Finance’s Zack Guzman to discuss the state of the hotel industry amid the coronavirus. Xeris Pharmaceuticals (XERS) spiked 12% in Friday’s after-hours trading after a filing disclosed that Soros Fund Management, LLC holds a 5.3% stake in the company with ~2.5M common shares.Soros Fund Management was founded in 1969 by 89-year old hedge fund tycoon and billionaire George Soros.Xeris’s lead product, Gvoke, is a ready-to-use glucagon product for diabetic patients experiencing severe hypoglycemia, which has been approved as a prefilled syringe (PFS) and autoinjector (HypoPen).The HypoPen was launched on July 1, making it the first ready-to-use glucagon in a premixed autoinjector, with no visible needle.“We are excited to announce that Gvoke HypoPen is now available. The simplicity and reliability of Gvoke HypoPen has the potential to change people’s ability to confidently respond to a severe hypoglycemic event in a timely manner,” commented CEO Paul R. Edick on the launch.RBC Capital’s Randall Stanicky has a buy rating on Xeris and $15 price target, writing that Gvoke addresses an important unmet need in a large patient population where current standards of care have significant limitations that have impeded uptake.Plus he cites the company’s broad pipeline that targets several diseases with limited or no viable treatment options. The pipeline leverages Xeris’ two formulation technology platforms to create non-aqueous formulations of existing drugs.“Formulation technology platforms can be otherwise leveraged across several therapeutic areas and Xeris is currently working with other companies to assess the feasibility of applying its platform to other products” the analyst adds.Overall, the stock has a Strong Buy Street consensus, with 4 recent buy ratings. Meanwhile the average analyst price target stands at $12.50 (373% upside potential). (See XERS stock analysis on TipRanks).Related News: Novavax Spikes 42% Pre-Market On $1.6B U.S. Funding For Covid-19 Candidate Gilead Reveals Covid-19 Treatment Remdesivir Reduces Mortality Risk Moderna Inks Deal With Rovi To Supply Potential Covid-19 Vaccine Outside US More recent articles from Smarter Analyst: * Australia Provisionally Approves Gilead’s Covid-19 Treatment * Gilead Reveals Covid-19 Treatment Remdesivir Reduces Mortality Risk * Square Snaps Up Stitch Labs, As Analyst Finally Upgrades Stock * Alibaba’s CEO Sets Out Ambitious Goals; Sees 2B Customers By 2036
Ford says staffing restrictions at an engine plant in Mexico are ‘not sustainable’, and the U.S. ambassador to Mexico says the company may have to start shutting down U-S plants if they can’t get enough engines. Yahoo Finance’s Brian Sozzi, Alexis Christoforous, and Rick Newman discuss.