These reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s. Some of the reports’ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.
New York Community Bancorp
• NYCB-NYSE
Overweight • Price $4.20 on Feb. 7
by Piper Sandler
We are reiterating our Overweight rating on NYCB shares. We think the noise is receding, and we have increased confidence in our bullish view on the stock, given the updated liquidity and deposit flow information that the company has provided. We suspect that our earnings projections may change a bit as the company provides additional color in the months ahead on how they will meet some of the objectives laid out.
However, we do not expect it to have a meaningful impact to our estimates. And, with the stock trading at just 42% of tangible book value, we view it as quite inexpensive, and we think the risk/reward from here is very attractive. Price target: $8.
Ford Motor
• F-NYSE
Buy • Price $12.07 on Feb. 6
by Citi Research
The company reported an in-line fourth quarter and encouraging 2024 guide, with adjusted Ebit guided to $10 billion-$12 billion, well above the $9.6 billion consensus.
In our view, Ford’s guide highlights some of the underappreciated aspects of the story—Pro franchise [serving businesses], product cycle, resilient U.S. auto demand—consistent with our upgrade last year. Free-cash-flow guide was also strong, with management targeting the low end of the capital-expenditure range. Updated electric-vehicle commentary didn’t come as a surprise but will likely draw some debate.
We expect a favorable reaction, as consensus estimates likely will rise and confidence around Ford’s execution grows. As a result of estimated changes and inputs, our price target goes to $16 from $15.
Chipotle Mexican Grill
• CMG-NYSE
Buy • Price $2,487.74 on Feb. 7
by UBS
We’re encouraged by robust transaction growth in the fourth quarter and a return to solid momentum in the first quarter following weather headwinds in January. Guidance for 2024 same-store sales appears achievable, with multiple drivers supporting continued traffic gains, including strong customer value scores, menu relevance, and a sizable throughput opportunity. Higher-than-expected general and administrative investment and labor pressure result in our 2024 earnings per share moving modestly lower.
But we believe that CMG maintains among the highest quality growth in the sector, with leading traffic momentum, no notable exposure to international pressures, and a highly resilient customer base that supports further upside for shares, even from current valuation (46.5 times 2024 earnings per share). Price target: $2,900.
VF Corp.
• VFC-NYSE
Neutral • Price $16.95 on Feb. 7
by Wedbush
VFC remains a highly challenged business, with fiscal third-quarter results that were well below expectations. We believe that visibility in the business remains low, with a lot of heavy lifting to do at Vans, The North Face becoming more choppy, and Timberland/Dickies seeing double-digit sales declines.
We are adjusting our fiscal-’24/’25/’26 earnings-per-share forecasts to $1.02/$1.46/$1.82 (from $1.35/$1.65/$1.90 prior), and our price target moves to $15.50 from $16.50. For the quarter specifically, revenues declined 17%, with earnings per share of $0.57 compared with the Street at $0.81.
Uber
• UBER-NYSE
Buy • Price $70.45 on Feb. 7
by Seaport Research Partners
We reiterate our Buy rating and increase our price target to $82 following solid fourth-quarter 2023 results. Uber demonstrated continued mobility momentum (28% growth, foreign-exchange neutral) and accelerating Delivery growth (17% FXN). Additionally, Uber continues to show solid expense discipline, which drove Ebitda of $1.28 billion (5% above our/Street) and up 93% year over year.
We reiterate our Buy rating, given our outlook for continued bookings strength for both Mobility and Delivery as well as continued expense discipline, which is driving strong Ebitda growth.
SkyWest
• SKYW-Nasdaq
Outperform • Price $58.51 on Feb. 5
by TD Cowen
SkyWest [a regional aircraft operator] reported solid fourth-quarter results. The company is seeing reduced pilot attrition and improving block hour production. It is also growing charter revenue through its SkyWest Charters group. They invested in Contour, a small airline that has 30 aircraft, 200 pilots, and an interline agreement with American Airlines. Management expects first-quarter block hours flat, quarter over quarter, and fiscal-2024 block hours flat to up 3% year over year.
We are updating our model to reflect the outlook for a better growth rate in 2024. We think these shares can trade for $66 a share, or 5.6 times estimated 2025 enterprise value Ebitdar. As a result, we are raising the rating on these shares to Outperform from Market Perform.
PayPal Holdings
• PYPL-Nasdaq
Neutral • Price $63.24 on Feb. 8
by BTIG
PayPal guided to fiscal-2024 adjusted earnings per share of $5.10, which was 7% below the consensus estimate of $5.49. CEO Alex Chriss emphasized that 2024 will be a transition year focused on execution. We are reiterating our Neutral rating, as we see the company’s plans to improve gross profit trends to drive sustainable and profitable growth as uncertain, and if successful, we expect it to be a multiyear initiative.
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