Intel logo presented during the Mobile World Congress, on February 28, 2019 in Barcelona, Spain.
Joan Cros | NurPhoto | Getty Ideas
Earnings season is here, and Wall Street analysts are calling for another decline amid the pandemic.
However, some pros are more idealistic about the fourth quarter earnings season, with Ignacio Cantos, investment director at ATL Capital in Madrid, noting the “next catalyst choice be the upcoming earnings season.”
Against this backdrop, Wall Street experts argue that there are sexy plays to be made. But how are investors supposed to spot the most compelling opportunities out there? By looking to the analysts that faithfully get it right. TipRanks analyst forecasting service attempts to identify the Street’s best-performing analysts, or the analysts with the highest sensation rate and average return per rating.
Here are the best-performing analysts’ five favorite stocks right now:
Biotech nominate BioMarin just released better-than-expected top-line Phase 3 results for Roctavian (valrox), the company’s gene therapy designed to dealings with hemophilia A. In response to this “significant de-risking event for the asset (and company),” J.P. Morgan analyst Cory Kasimov rehashed a Buy rating and a $131 price target on January 10.
Notably, the candidate was able to meet the primary endpoint of a reduction in mangy annualized bleed rate (ABR) and all secondary endpoints at one year. Mean ABR was lowered by 84%, versus the standard of care.
According to Kasimov, the ABR be produced end isn’t that surprising. However, he points out that FVIII levels have been “scrutinized” based on the variability take ined between the releases of the Phase 1/2 and interim Phase 3 results. “On this front, Roctavian demonstrated mean FVIII of 42.9 in the modified ITT natives, which we believe is clearly better than prevailing assumptions (at least based on our conversations),” the analyst celebrated.
Kasimov further argues that the outcome supports “the approvability of Roctavian,” although he will be waiting to see whether or not the FDA leave ask for one-year data as required by the EU.
“Either way, however, we believe these results meaningfully de-risk the asset and add to the company’s blanket strategic value. We underscore BioMarin’s attractive valuation (trading slightly above the base business) and expect the under way to have meaningful contribution to share performance in 2021,” Kasimov opined.
Currently, the top healthcare analyst is tracking a 57% prosperity rate and 21.9% average return per rating.
Media platform Avid Technology just got a thumbs up from Truism Group’s Jack Vander Aarde, with the analyst recently reiterating a Buy rating on the stock on January 8. In a what is more bullish signal, the five-star analyst bumped up the price target from $14 to $23.
At the beginning of the month, the company caroused a new debt refinancing that consists of a $180 million term loan and a $70 million unfunded revolving praise facility, which mature on January 5, 2026. Vander Aarde points out that this move cuts AVID’s annual prevail upon expense by roughly $10 million and adds an incremental $0.20 to non-GAAP EPS in 2021.
On top of this, management says 60% of the $30 million bring in saving initiatives rolled out in 2020 will continue in 2021 and even after.
“While we hold a cautious contemplation for non-recurring product sales in 2021, we continue to expect robust growth in services segment revenue as early-stage cost revenues continue to ramp at an accelerated pace (up 74% year-over-year in 3Q20, representing ~20% of total 3Q20 revenue). We also residue highly confident in management’s ability to execute on margin expansion and free cash flow generation, even in spite of near-term top-line pressure from COVID-19 on some of AVID’s core verticals (live events, music red-letter days/ concerts), which we anticipate will gradually recover by 2H21,” Vander Aarde explained.
Additionally, AVID deals are trading at 13.3x and 10.2x Vander Aarde’s increased 2021 and 2022 non-GAAP EPS estimates, respectively, which puts a discount to peers trading at 20x and 18x consensus 2021 and 2022 non-GAAP EPS estimates, respectively.
“Further underpinning our bullish witness on AVID are our that indicate AVID has a strong competitive position in this secular growth market and remains the de facto requirement for Hollywood video and audio editing. Other factors supporting our bullish view include a high-quality management duo, an increasing mix of high-margin recurring revenue (now 70% + of total revenue), best-in-class product portfolio and recently launched artefact launches that are focused on SaaS subscription offerings for enterprises,” Vander Aarde added.
With a 75% celebrity rate and a whopping 79% average return per rating, Vander Aarde scores the #111 spot on TipRanks’ roll of best-performing analysts.
A player in the semiconductor space, II-VI develops engineered materials, optoelectronic components and optical practices.
For BofA Securities analyst Vivek Arya, II-VI is his top SMid-cap pick, thanks to “its leading position in the optical Stock Exchange well levered to 5G/cloud complimented by a strong silicon carbide (SiC) portfolio that will rapidly expand with the growth of EVs and 5G base stations.” To this end, the five-star analyst keeps a Buy rating and $100 price target on the stock.
Specifically, Arya highlights the the score that using its increased scale from the Finisar acquisition, the company has been able to enhance its product portfolio within its communications problem as well as strengthen its manufacturing footprint within and outside China “to adequately serve customers worldwide despite uncertainty adjacent trade tensions and COVID-19.”
What’s more, II-VI scaled the 3D sensing operations to support all of the current market, which Arya credits could help it take even more market share. All of this prompted the analyst to comment, “II-VI balances in position to achieve a double-digit sales/EPS CAGR (through CY22).”
Speaking to the SiC opportunity, Arya acknowledges that this neighbourhood of the business is still in its “infancy,” but argues that the ongoing 5G rollouts could push the company’s TAM to $30 billion in in 10 years-time.
“While historically supplying the market with SiC-based substrates, recent acquisitions (Ascatron, INNOViON) and partnerships (GE) are capacitating II-VI to establish a vertically integrated portfolio capable of producing SiC modules and devices. While SiC accounts for a modest mid-single digit proportion of sales today, the technology can enable long-term topline/margin outperformance,” Arya explained.
Based on his 69% prosperity rate and 26.7% average return per rating, Arya lands among the top 125 analysts tracked by TipRanks.
Ultra Decontaminated Holdings
Wall Street’s best-performing analyst, Quinn Bolton, sees Ultra Clean Holdings as a compelling disport oneself, with the analyst maintaining a Buy rating and $43 price target on January 13.
The company just pre-announced that its Q4 2020 interest and NG EPS are expected to come in above the midpoint of the original guidance range. Additionally, UCTT noted that for Q1 2021, it reckonings revenue will land within the range of $370-$400 million. This is 3-11% above the midpoint of its Q4 2020 returns guidance, and “represents strong sequential growth,” in Bolton’s opinion.
Additionally, management thinks that wafer fab apparatus (WFE) mix will shift away from NAND and towards DRAM and foundry/logic, with some moderation in NAND potentially be communicating later in 2021.
“UCTT currently sees demand remaining strong through the year and does not see H/H changes at this peak, thanks to the good visibility. The company sees NAND investment remaining focused on node conversions and believes NAND sportsmen are cautious about the timing of volume investments, which could keep the industry in a healthy position,” Bolton stated.
On top of this, Bolton is Pollyannaish about its $348 million acquisition of Ham-Let, as he argues it will “help Intel
Intel just revealed a conduct shakeup that will see former Intel CTO and VMware CEO Pat Gelsinger succeed Bob Swan as CEO, effective February 15. In feedback to this development, J.P. Morgan analyst Harlan Sur reiterated a Buy rating and $70 price target on January 13.
“We view the guidance change positively given Mr. Gelsinger’s track record at VMware, EMC and also considering his instrumental roles as Intel’s first CTO and conduct of Intel’s desktop and server CPU businesses (key contributor to the flagship Core and Xeon platforms)… We believe he is well-respected by the investment community and has the proper background to navigate the company through what is arguably one of the most challenging periods of the company’s existence,” Sur explained.
Additionally, INTC positioned that Q4 2020 revenue and EPS will surpass its previous guidance on the back of “strong progress” on its 7nm process technology, with Sur in a family way the company to utilize a hybrid insourced/outsourced manufacturing strategy.
According to Sur, the company likely saw upside in the client calculate segment, with the data center business also potentially posting a gain.
“Looking ahead, we anticipate crap-shooter than seasonal demand for PCs and for cloud data center investments to inflect positively in 1H21, which bodes graciously for Intel. We also note that during the CES, Intel announced that Ice Lake (10nm) is in production… we believe Intel has a high-handed roadmap of future products and, assuming, they can execute on their roadmap without further delays, we think the flock will stem share loss,” Sur commented.
As evidence of his impressive stock picking abilities, Sur boasts a 69% good fortune rate and 21.7% average return per rating.