In this article, we discuss the 5 stocks that analysts just increased price targets of. If you want to read our detailed analysis of these stocks, go directly to Analysts Just Increased Price Targets of These 10 Stocks.
5. Aflac Incorporated (NYSE:AFL)
Number of Hedge Fund Holders: 33
Aflac Incorporated (NYSE:AFL) is an insurance company with solid fundamentals. The firm reported earnings per share of $1.59 for the second quarter, beating estimates by $0.31. The revenue over the period was $5.5 billion, beating predictions by $190 million. The company is ranked fifth on our list of 10 stocks that analysts just increased price targets of.
Aflac Incorporated (NYSE:AFL) stock was given an Overweight rating by Morgan Stanley on October 14 and the price target was raised to $63 from $61. The company beat market expectations on earnings per share and revenue in the second quarter.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based firm Ariel Investments is a leading shareholder in Aflac Incorporated (NYSE:AFL) with 1.4 million shares worth more than $79 million.
In its Q2 2021 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and Aflac Incorporated (NYSE:AFL) was one of them. Here is what the fund said:
“This quarter we are highlighting Aflac (AFL) as a relative yield example in the Financial sector. AFL is a leading provider of life and supplemental medical insurance in Japan and the U.S. AFL products offer financial protection against loss of income for policy holders based on qualifying health events. Aflac Japan generates approximately 70% of total revenues, and the company has dominant market share in Japan. In the U.S., AFL provides voluntary insurance for policy holders at businesses with products sold through payroll deduction by its large sales force which sells primarily through face-to-face interactions. We believe AFL’s dominant market position in Japan and its large U.S. sales force create a sustainable competitive advantage for the company.
Our thesis on AFL is that its sales will recover from the impact of the COVID pandemic, and it will return significant amount of capital to shareholders. Sales were negatively impacted in both Japan and the U.S. but appear to be in early stages of recovering. We believe sales will improve further as economies open and new products are introduced in Japan. In the U.S., agents will be able to return to face-to-face interactions as people get vaccinated, something that was restricted last year.
In terms of capital returns, AFL committed to returning $8-9 billion between 2020-2022, which is expected to be 75% of operating earnings. The company returns capital via share buybacks and dividend increases. AFL is a Dividend Aristocrat that has increased its dividend 39 years in a row including 10% annually over the last five years; it also recently announced an 18% dividend increase. Other favorable attributes include an A- rated balance sheet by Standard and Poor’s and an attractive valuation with a relative yield near the high end of its historical range.
We believe its valuation is cheap with its forward expected Price/Earnings (P/E) ratio just 9x and a relative P/E of 0.4x versus the S&P 500 despite an industry leading return on equity. At the time of purchase, AFL had a dividend yield of 2.5% and its relative dividend yield vs. the S&P 500 was 1.8x, as shown. Some risks to the thesis include a prolonged economic downturn, loss of market share due to unsuccessful new product roll outs and potential losses in its investment portfolio.”
4. Ameriprise Financial, Inc. (NYSE:AMP)
Number of Hedge Fund Holders: 37
Ameriprise Financial, Inc. (NYSE:AMP) is one of several finance stocks that recently earned target raises at Morgan Stanley. The stock has returned over 66% to investors in the past twelve months. It is placed fourth on our list of 10 stocks that analysts just increased price targets of.
Investment bank Morgan Stanley maintained an Equal Weight rating on Ameriprise Financial, Inc. (NYSE:AMP) stock on October 14 and raised the price target to $285 from $265. The share price of the firm jumped 2% after the ratings update.
At the end of the second quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Ameriprise Financial, Inc. (NYSE:AMP), the same as in the preceding quarter worth $969 million.
3. APA Corporation (NASDAQ:APA)
Number of Hedge Fund Holders: 37
APA Corporation (NASDAQ:APA) is one of the energy firms that are poised to benefit from the gains that crude oil has made at the market in recent weeks. The company is ranked third on our list of 10 stocks that analysts just increased price targets of. Earlier this month, crude topped $80 per barrel for the first time in seven years, with further hikes likely on the back of an OPEC+ agreement to gradually raise output through winter season.
APA Corporation (NASDAQ:APA) stock was given an Overweight rating and the price target was raised to $27 from $25 by KeyCorp on October 14. Truist had also raised the target on the stock to $25 from $21 with a Hold rating last week.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in APA Corporation (NASDAQ:APA) with 20 million shares worth more than $449 million.
In its Q2 2021 investor letter, Ariel Investments, an asset management firm, highlighted a few stocks and APA Corporation (NASDAQ:APA) was one of them. Here is what the fund said:
“APA Corp. (APA), (formerly Apache Corp.) increased +21.01%, benefitting from strong oil and natural gas markets. Crude oil is up +47% this year. We have lamented about surprisingly low natural gas prices in past letters and are pleased to see them moving higher this year.
Natural gas produces significantly less carbon emissions than either coal or crude oil. Equity investors have been badly burned by underperforming energy companies over the past decade. As a result, we believe they are still underestimating APA’s earning power. We have recently added to our holding.”
2. BlackRock, Inc. (NYSE:BLK)
Number of Hedge Fund Holders: 47
BlackRock, Inc. (NYSE:BLK) is one of the largest publicly owned investment managers in the world. It is placed second on our list of 10 stocks that analysts just increased price targets of. The company posted earnings for the third quarter on October 13, reporting earnings per share of $10.95, beating estimates by $1.47. The revenue over the period was $5 billion, up 15% year-on-year.
On October 14, investment advisory Citi maintained a Buy rating on BlackRock, Inc. (NYSE:BLK) stock and raised the price target to $1,035 from $1,030. Analyst William Katz commented that “three key positives” would emerge from the third quarter results of the firm.
At the end of the second quarter of 2021, 47 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in BlackRock, Inc. (NYSE:BLK), up from 42 the preceding quarter worth $1.5 billion.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and BlackRock, Inc. (NYSE:BLK) was one of them. Here is what the fund said:
“During the quarter, we initiated a position in BlackRock Inc., the world’s largest investment manager with $9 trillion in assets under management. BlackRock offers an array of products across equities, fixed income, alternatives, and cash management to institutional and retail investors worldwide. About one-quarter of BlackRock’s assets under management is actively managed, and the rest is in passive index funds and iShares-branded ETFs. The company offers technology services including the investment and risk management platform, Aladdin, as well as other advisory services and solutions. Over the five years ending December 31, 2020, assets under management and earnings per share grew at compound annual growth rates of 13% and 12%, respectively.
We believe BlackRock is well positioned for continued growth given its diverse product offering, global distribution, brand recognition, and capable management team. With most of its assets in index funds and ETFs, BlackRock is a prime beneficiary of the ongoing shift to passive investing. The company also benefits from increasing demand for sustainable investment strategies and “barbell” strategies that use a combination of low-cost index funds, active and illiquid alternatives products. BlackRock fits squarely within our Tech-Enabled Financials theme given its longstanding commitment to innovation and proprietary technology platform, Aladdin, which serves as the investment and risk management system for both BlackRock and a growing number of institutional investors around the world. We expect BlackRock’s earnings per share will continue to grow at a doubledigit annual rate over a market cycle through a combination of mid-single-digit growth in assets under management from net inflows, market appreciation, low to mid-teens revenue growth in technology services, modest margin expansion, and share repurchases.”
1. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 58
Airbnb, Inc. (NASDAQ:ABNB) is ranked first on our list of 10 stocks that analysts just increased price targets of. The company has benefited from increased travel activity in the post-pandemic economy. The slowing impact of the Delta variant of the virus is likely to give tourism a further boost in the coming months.
Stifel analyst Scott Devitt reiterated a Hold rating on Airbnb, Inc. (NASDAQ:ABNB) stock on October 14 but raised the price target to $160 from $145, noting that the firm was expected to deliver “less severe” quarter-over-quarter declines in average daily rates in the third quarter earnings.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Airbnb, Inc. (NASDAQ: ABNB) with 3.4 million shares worth more than $526 million.
In its Q2 2021 investor letter, Worm Capital LLC, an asset management firm, highlighted a few stocks and Airbnb, Inc. (NASDAQ:ABNB) was one of them. Here is what the fund said:
“Throughout the quarter, you may have noticed that we averaged into a significant position in Airbnb (ABNB). Though the stock has been a relative underperformer since its February highs, we are highly confident about the company’s prospects and its ability to generate meaningful compounded returns over time.
Some history: We have been following Airbnb’s journey for several years, long before the company went public earlier this year. (In fact, nine years ago, in November 2012, Eric profiled the company for Inc.: “Airbnb Is Changing Travel.”)
Whenever we underwrite a new investment, we look for a few key attributes that help us determine the potential long-term value of a business, as well as its risks. In particular, we focus on management (Are they founders? Do they have skin the game? Are they playing the long game?), addressable market size (How big is the opportunity?), its relative growth and creativity to expand (Are they constantly innovating to make the product better for their customers?), margin expansion (Where can we find operating leverage in the model?), its status in the industry (Are they the dominant player? Can they
take market share from incumbents?), business risks (What are we missing? Are customers dissatisfied? What do employees say?) and probably a dozen more elements that are critical to our process. It’s only then do we take out the pencils do the valuation work.
In short, ABNB fulfills pretty much every element of a business model we’re attracted to: First, it’s highly scalable marketplace-based business model that unites buyer and seller with observable flywheel effects. (This is an important observation, in that the platform creates significant economic value for millions of hosts who rely on Airbnb, which in turn attracts new hosts who identify the opportunity, which creates more inventory, which turn attracts more travelers, which attracts more hosts, and soon.) Second, it has a global focus with significant opportunities to expand its operating leverage; Third,
its management—which is still founder-led—stands out to us as long-term thinkers capable of handling crisis, which the team demonstrated throughout the pandemic by dropping operating costs and turning the business into a more efficient, lean organization. (Like Churchill said: “Never let a good crisis go to waste.”)..”
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