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Bull Moves: Analysts Just Upgraded These 3 Hot Stocks

The world’s largest asset manager is impressed with the market’s recent gains, and it has made that sentiment clear by upgrading US stocks. In its recent reassessment of conditions in
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The world’s largest asset manager is impressed with the market’s recent gains, and it has made that sentiment clear by upgrading US stocks. In its recent reassessment of conditions in the American financial markets, investment giant BlackRock issued a general upgrade for Wall Street. This wasn’t an upgrade on particular stocks, but on the US market as a whole.

Explaining the move, the BlackRock note points out that the daily COVID news is just noise – the real news is on the vaccine front, where at least two effective vaccines are just months away from public distribution. A viable vaccine for the coronavirus disease will push us back to normal conditions, and boost investors’ mood immeasurably. Hence, the upgrade.

“We upgrade US equities to overweight, with a preference for quality large caps riding structural growth trends, as well as smaller companies geared to a potential cyclical upswing,” BlackRock said.

The company expects to see a cyclical upturn in the US economy in 2021, as the coronavirus crisis fades into the background and the political landscape moves back to pre-Trump patterns.

The general upgrade by BlackRock was only one sign of confidence in the US markets. Several of Wall Street’s research firms have also been issuing upgraded stances, taking a micro view and applying their revisions to specific equities. We’ve pulled up three from the TipRanks database, and found that they fit BlackRock’s preference: mid- to large-cap companies with established positions in the market.

Cleveland-Cliffs, Inc. (CLF)

We’ll start with Cleveland-Cliffs, an Ohio based mining company. Cleveland-Cliffs specializes in iron production, and has four active mines in Minnesota and Michigan. The company focuses on mining, beneficiating, and pelletizing the ore, a process that produces iron pellets in a variety of grades fit for blast furnace smelting, steelmaking, and alloying. Cleveland-Cliffs is capable, on its own, of producing more than 40% of the total US capacity in iron pellets. It also produces flat-rolled carbon, stainless steel, and electrical steel products.

As the economy ramps back up, recovering from the deepest coronavirus hits, Cleveland-Cliffs’ revenues have been rising. The company’s top line has grown since the first quarter of 2020, posting sequential gains in both Q2 and Q3. The third quarter number, at $1.65 billion, was in line with analyst expectations, and came in far ahead of the $555.6 million posted in the year-ago quarter.

The share price has mirrored this recovery. The stock hit bottom back in mid-March, at just $3.14 per share. Since then, it has shown impressive growth. The shares have fully recouped those mid-winter losses, and are now trading up 32% year-to-date.

GLJ Research analyst Gordon Johnson sees Cleveland-Cliffs gaining as the pandemic draws back and its customers resume normal economic activity. To this end, the analyst upgraded CLF from Hold to Buy, and his $15.80 price target suggests it has a 46% upside in the coming year. (To watch Johnson’s track record, click here)

“US automotive production has rebounded to pre-pandemic levels, a clear positive for Cliffs, as ~27% of its (soon-to-be) steel demand comes from that sector. Even oil/gas rig counts, while still down sharply y/y, appear to have turned a corner in terms of growth. Moreover, our checks indicate potential delays to supply additions. As we see it, these dynamics, which have sent US HRC prices to near $734/short ton last week, have the potential to keep … price levels sustained into 2021,” Johnson stated.

Overall, the Moderate Buy consensus rating on CLF is based on an even split; the stock has 3 Buys and 3 Holds on record. However, its recent share appreciation has pushed it above the average price target. The shares are selling for $10.85, while the average target remains $10.09 for now. (See CLF stock analysis on TipRanks)

General Electric (GE)

Also upgraded today is General Electric. The company once boasted one of the most famous marketing jingles in advertising – “We bring good things to life” – referring to its position as a major manufacturer of home appliances. Today, this multinational conglomerate has its hands in a wide variety of manufacturing sectors, from aviation to electrical power to renewable energy.

GE’s stock has been on an upward trajectory since the company released the Q3 earnings report at the end of October. The results – while down year-over-year – showed solid sequential gains and came in above analyst expectations. At the top line, revenue grew from $17.7 billion to $19.4 billion, while EPS, which had been negative in Q2, turned positive and came in at 6 cents per share. The EPS forecast had been for a 6-cent loss.

Christopher Glynn, 5-star analyst with Oppenheimer, sees GE in a fundamentally sound position. The analyst upgraded GE, taking it from Neutral to Outperform (i.e. Buy). His $12 price target implies an upside potential of ~15% for the next 12 months. (To watch Glynn’s track record, click here)

Glynn commented, “Our Outperform rating reflects view of more pointed read-through of cost reduction initiatives resulting in early stages of clearer breadth of operating momentum across the segments. We believe working capital performance could surprise to the upside in 2021, considering GE working through widespread facility consolidations and managing working capital amidst that during2020 (and continuing)."

"We also like the extended duration of the debt structure and strong liquidity, now affording a backdrop toemerge from the Aviation downturn in a position of resilience,” the analyst noted.

GE’s recent share appreciation has pushed the stock price above the average price target. The stock is currently trading at $10.45 per share – but the average target is $9.29. It remains to be seen if Glynn’s upgrade and higher target are the start of general reassessment of this stock. For now, GE has a Moderate Buy analyst consensus rating, based on 13 reviews that include 8 Buys and 5 Holds. (See GE stock analysis at TipRanks)

Wells Fargo (WFC)

Last but not least is Wells Fargo, whose $118 billion market cap makes it the world’s fourth largest bank. It is also the fourth largest in the US, boasting nearly $2 trillion in total assets. Wells Fargo offers a full range of banking services, for residential and commercial customers as well as major companies and investment firms.

The corona crisis of 2020 hit Well Fargo hard, and the bank’s share price has still not recovered from the fall it took in February and March of this year. Revenues have been regaining ground through the past nine months, but slowly – the Q3 number, $18.7 billion, was up a full billion dollars from Q1, but still down from 4Q19, the last pre-corona quarter. The Fed’s low interest rate policy has put a damper on bank profits, and Wells Fargo’s net interest income for the Q3 was down 19% year-over-year to $9.4 billion.

Despite these headwinds, Raymond James analyst David Long is turning bullish on WFC shares. In a research note issued today, the analyst double-upgraded WFC from Underperform (i.e. Sell) to Outperform (i.e. Buy) along with a $32 price target. (To watch Long’s track record, click here)

In his comments on the stock, Long notes the composition of Wells Fargo’s loan portfolio as a structural strength: “We expect Wells Fargo's credit performance during this credit cycle to perform better than its peers due to its large exposure to residential real estate loans, which account for 35% of its total loan portfolio (compared to peers at 23%), as home prices have held up well. Furthermore, its exposure to hotel (1.3% of loans) and entertainment (1.0%) are well below levels of its peers.”

the analyst concluded, "With the worst likely in the past, we now believe that its pretax pre-provision income has troughed, revenue is nearing a bottom, a multi-year expense rationalization initiative can finally be taken on, and repurchase activity can return in the near future."

All in all, the analyst consensus rating here is a Moderate Buy, based on 14 reviews which include 7 Buys, 6 Holds, and 1 Sell. The average price target, however, reflects Wall Street’s caution here; at $29.08 it suggests only limited growth -- 1.64% to be precise. (See WFC stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Bull Moves: Analysts Just Upgraded These 3 Hot Stocks appeared first on TipRanks Financial Blog.

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Analyst reviews Apple stock price target amid challenges

Here’s what could happen to Apple shares next.

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March 12, 2024

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They said it was bound to happen.

It was Jan. 11, 2024 when software giant Microsoft  (MSFT)  briefly passed Apple  (AAPL)  as the most valuable company in the world.

Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion. 

It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion. 

"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.

The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.

Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue. 

Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.

Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.

“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.

A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.

Future Publishing/Getty Images

Big plans for China

Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.

Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.

Related: Tech News Now: OpenAI says Musk contract 'never existed', Xiaomi's EV, and more

The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.

Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.

Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.

"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads. 

"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.

Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify  (SPOT)  and other music streaming rivals via restrictions on the App Store.

The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.

Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com. 

The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.

BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market. 

Analyst says Apple selloff 'overdone'

Concurrently, prices for previous models are typically reduced by about $100 with each new release. 

This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.

More Tech Stocks:

Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.

This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China. 

BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.

The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.

On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”

The firm said that investors' growing preference for AI-focused stocks like Nvidia  (NVDA)  has led to a reallocation of funds away from Apple. 

In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.

And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.

“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.

Related: Veteran fund manager picks favorite stocks for 2024

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Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…

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There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

Credit: IVI

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

 

The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.

 

There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.

 

“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”

 

In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.

 

There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.

 

Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.

 

Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”

 

As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.

 

###

 

About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.

IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.

IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.

 

CONTACT

Aerie Em, Global Communications & Advocacy Manager
+82 2 881 1386 | aerie.em@ivi.int

Journal

The Lancet Global Health

Method of Research

Observational study

Subject of Research

People

Article Title

Incidence of typhoid fever in Burkina Faso, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, and Nigeria (the Severe Typhoid in Africa programme): a population-based study

Article Publication Date

12-Mar-2024

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

Earlier today, CNBC’s…

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever... And Debt Explodes

Earlier today, CNBC's Brian Sullivan took a horse dose of Red Pills when, about six months after our readers, he learned that the US is issuing $1 trillion in debt every 100 days, which prompted him to rage tweet, (or rageX, not sure what the proper term is here) the following:

We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.   

Maybe it will never matter.   Maybe MMT is real.   Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.

I have no idea.  Only time will tell.   But it’s going to be fascinating to watch it play out.

He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."

According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.

The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...

... and spending which is about 50% higher compared to where it was in 2020.

The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.

And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.

But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).

And it gets even worse, because we are now in the ponzi finance stage of the Minsky cycle, with total interest on the debt annualizing well above $1 trillion, and rising every day

... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.

We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...

.. which lays out the proposed Biden budget as follows:

The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.

Without them the deficit will grow $19 trillion.

That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.

No family budget or business could exist with this kind of math.

Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.

Tyler Durden Tue, 03/12/2024 - 18:40

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