3 Notable Large-Cap Upgrades: Anheuser-Busch InBev NV (ADR) (BUD), Target Corporation (TGT), Walgreen Company (WAG)

Page 1 of 2

We saw a number of market-moving analyst calls today, in particular with large-cap stocks. Let’s look at the top three to determine if value exists.

Anheuser-Busch InBev NV (ADR) (NYSE:BUD)

After a five-year 108% return, analysts at Stifel Nicolaus believe there is even more upside potential in shares of Anheuser-Busch InBev NV (ADR) (NYSE:BUD). The firm raised its price target from $94 to $112, which would be a nice premium on its current price of $95.35. The firm specifically points to the Grupo Modelo purchase and believes that there is still room for domestic growth along with international growth. The firm believes that new advertising initiatives will create an emergence of new brands, which should produce further gains from the stock.

Anheuser-Busch InBev NV (ADR) (NYSE:BUD)While I agree with all of the points made by Stifel Nicolaus, we must also consider the valuation aspect of the trade. This is a non-cyclical stock, yet trades with a price/sales ratio of 3.85 and a P/E ratio of 21.45, which is high above the S&P average of 16. Last quarter the company saw top line growth of 4.2%, and is projecting growth that is consistent with GDP. As a result, I don’t believe it is worth the premium, and with a yield of 1.64%, I think there is better value elsewhere.

Walgreen Company (NYSE:WAG)

UBS upgraded shares of Walgreens from Neutral to a Buy, and set a price target of $48. As a result, the stock is currently trading with gains of 4%, which has also pushed the industry higher. The firm believes the impact of the Alliance Boots transaction is now “clear” and that it will produce a meaningful impact to the fundamentals of the company. Furthermore, the firm reiterates the belief that gross margins could improve in 2013. This has been whispered over the last several months as generic exposure increases in its stores.

Despite a three-month 17% return, shares of Walgreen Company (NYSE:WAG) are still attractive. The stock trades with a price/sales of just 0.55 and has a forward P/E ratio of 11.59, which is consistent with the market. I wouldn’t go as far to say that shares are cheap, because when you compare its price/sales to that of Rite Aid Corporation (NYSE:RAD), 0.06, I think it’s clear that there is better value in the industry. WAG has been the stock of choice in the space, therefore it could see additional gains, although I do think there is better value.

Target Corporation (NYSE:TGT)

While both Walgreen and Anheuser-Busch InBev NV (ADR) (NYSE:BUD) saw upgrades, Target Corporation (NYSE:TGT) was downgraded on Wednesday to Neutral from Buy by Buckingham Research, with a price target of $69. According to the firm, the stock is getting too expensive after its 13.4% run higher in 2013. Furthermore, the firm adds that there could be fundamental problems after the company has gotten off to a slow start in the new year.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!