An analyst’s call can be a major swing in momentum for a stock. In the past I have written in detail about such subjects, as a call can often create a domino effect of revised outlooks and either buying or selling of a stock. In this piece I am looking at four stocks that traded with excessive volatility thanks to the notes issued by analysts; these are all calls worth noting.
|B/E Aerospace Inc||(NASDAQ:BEAV)||Goldman Sachs||Conviction Buy|
|International Paper Company||(NYSE:IP)||Jefferies||Buy|
|Applied Materials, Inc.||(NASDAQ:AMAT)||Goldman Sachs||Conviction Buy|
Goldman Sachs called BE Aerospace the “best story in aerospace” on Tuesday as it reiterated its “Conviction Buy” rating and upped its price target from $67 to $68. Obviously, a $1 price target increase does not seem like much, but considering its current price of $52.24 you can see that Goldman is expecting nice gains from the stock.
The firm specifically notes higher margins from its Business Jet unit and the likelihood of an upside surprise in earnings as drivers. The firm also provided long-term EPS expectations, with 2013 being $3.46, 2014 at $4.46, and 2015 at $5.37. Therefore, the firm expects long-term growth and margin improvements. The company has done a great job at growing its business (and margins). Last quarter it grew revenue by 22.7% and earnings by 31.2%. Also, the stock is cheap, with a forward P/E ratio of just 12.59. Therefore, Goldman’s expectations are highly likely.
On Tuesday, shares of SanDisk traded higher by 2.5% after RBC upgraded the stock to “Buy” with a $65 price target. The firm’s upgrade is due to the company’s successful transition. In the past, SanDisk was known strictly as a retail flash memory card supplier. Now, it has branched out into a vertically integrated flash memory solutions provider for OEMs.
RBC believes that this successful transition has and will continue to bring about new opportunities, and so far the firm is correct. SanDisk Corporation (NASDAQ:SNDK) is trading very close to its 52-week highs and with profit margins of 8.26%, there is a lot of room for growth. Therefore, I agree and would watch the stock.
Jefferies launched coverage with a “Buy” rating on International Paper and a $52 price target. The firm’s upgrade was more industry-related versus company-related, as we’ve seen a recurring theme of containerboard upgrades over the last few months.
In my opinion, International Paper Company (NYSE:IP) is the best in the space. It has double digit revenue growth and with profit margins of less than 3% there is room for improvement. The stock is trading at just 9.4 times next year’s earnings with a price/sales of 0.65. Therefore, it is cheap, and could easily reach the price target of $52.