Moreover, Barron’s feature columnist Jack Hough anticipates big demand for lucrative server chips and a stabilization in the PC market. Hough also expects the company to cut its capital spending spree and capitalize on more high-end contracts (such as Apple & Samsung).
It is very difficult to imagine Intel Corporation (NASDAQ:INTC) doubling in price, trading over $50. The stock has produced gains of just 20% over the last decade, and has pretty much hovered around $25 during this period. With that said, Hough’s reasons are sensible, and Intel Corporation (NASDAQ:INTC) is a cheap stock that does pay a 3.70% dividend yield. Therefore, I think the call is possible, although I still view Intel Corporation (NASDAQ:INTC) as a safe high-yield holding; not a high-flying momentum stock.
“Paradigm Changing” call after ASCO
Goldman calls Bristol Myers Squibb Co. (NYSE:BMY)’ immune-oncology program “paradigm changing” and raised its price target to $55 from $48. The firm also notes that the market is likely to be massive and that Bristol Myers Squibb Co. (NYSE:BMY) is well-positioned to capitalize on the opportunity.
As an investor, I agree with everything in Goldman’s note. Bristol Myers Squibb Co. (NYSE:BMY)’ anti PD-1 drug is showing effectiveness at successfully treating various diseases – and is the most advanced product in this new class of drugs. Right now, it is looking as if nivolumab will enter the market next year, while Merck & Co., Inc. (NYSE:MRK)’s anti PD-1 will be two years behind.
Currently, analysts project sales for the anti PD-1 market to be up to $10 billion annually. Thus, you can see why the market is responding so well to Bristol Myers Squibb Co. (NYSE:BMY). Personally, I am buying the stock. It still has a 3% yield and with $16 billion in annual sales, the addition of this new drug could increase total sales by 40% over five years. The opportunity simply appears too great to ignore.
It’s not a fad!
While I appreciate Barclay’s channel check and the bullish price target on a stock that I own, I can’t help but think that Barclay’s is late to the party. With that said, I am extremely bullish on the outlook for Sodastream International Ltd (NASDAQ:SODA), believing the company’s 1% presence in the U.S. could triple. However, I always find it a bit irresponsible when a firm upgrades a stock with 130% annual gains that “was” trading with 50% growth at 20 times earnings. Thus, I don’t like the timing of this call – but I agree with the price target – I think $100 is possible.
Final thoughts
When I look at the three noted upgrades above, I think Bristol-Myers is presenting the best opportunity.
Intel has traded flat for over a decade, and operates in a space that is highly volatile. Sodastream International Ltd (NASDAQ:SODA) is a personal favorite of mine — a company that has grown rapidly for four years — yet has significant short presence that could stop the stock from reaching such a bullish target.
With Bristol-Myers, the anti PD-1 market is potentially enormous. It is the next phase of immunotherapy, the process of blocking PD-1 to allow the immune system to effectively fight cancer. Most importantly, these drugs are working, and Bristol-Myers is ahead of all competition.
In biotechnology, you rarely see technology of this caliber that revolutionizes an industry – but Bristol Myers Squibb Co. (NYSE:BMY) has this asset – and could benefit greatly in the years ahead with a best-selling line of products.
Brian Nichols is long SODA. The Motley Fool recommends Intel and SodaStream. The Motley Fool owns shares of Intel and SodaStream. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article 3 Noteworthy Upgrades Worth a Look originally appeared on Fool.com is written by Brian Nichols.
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