These reports, excerpts edited and edited by Barron's, have recently been issued by investment and research firms. The reports are a selection of analysts' thoughts; They should not be construed as representing the views or recommendations of Barron's. Some of the report's publishers have provided, or hope to provide, investment banking or other services to the analyzed companies.
Overweight • price $26.30 on 26th May
by JP Morgan
We begin coverage on Kenvue at an Overweight position with a price target of $29 for December 2023. As the world's largest pure-play consumer healthcare company, Kenvue is in a unique position following its split from parent company Johnson & Johnson to capitalize on consumer megatrends ( self-care, aging) to benefit.
We expect Kenvue to deliver stable growth in large, addressable markets, with iconic brands that build strong consumer connections from birth in a portfolio that includes over-the-counter cold, flu, pain, allergy and smoking cessation medicines, skin care and mouthwash includes , baby care and wound care, among others.
As a standalone company, we believe that following the separation that began in 2019, Kenvue's board and management will be more focused on, and will hold them more accountable for, the growth and profitability of the business, creating significant opportunities for growth scaling offers.
At our December 2023 price target of $29, Kenvue will be valued at 16 times the estimated 2024 Ebitda enterprise value, which is approximately where overweight Estimated 2023 Colgate-Palmolive is trading.
Surpass • Price $40.01 on June 1st
We are upgrading C3 to Outperform from Neutral and increasing our price target to $50 from $24.
While it will be a bumpy road, we believe C3 has turned the tide and is now poised to capitalize on the $800 billion artificial intelligence transformational opportunity over the next decade, with use cases growing across the board and that Company is in a unique position to help drive the push and monetize it for the next 12 to 18 months.
C3.ai delivered solid fourth-quarter results with above-average sales and earnings. As the company aims to be cash flow positive and non-GAAP earnings by fiscal 2024, we believe this quarter was another important step in the right direction.
Buy • Price $30.67 on May 31st
We update CSX [the railroad company} from Neutral to Buy. Our analysis of interest rate changes, ISM new orders, and industrial production point to weakening and an eventual bottoming in industrial-related volumes in second-quarter 2024 or third-quarter 2024.
However, with intermodal volumes likely bottoming year over year in the second quarter, we see a path to volume growth for CSX in 2024 with intermodal growth of 4% offsetting a 1% decline in merchandise.
CSX has also realized the most significant improvement in manifest train speed (30% year over year) of all the rails, which positions CSX to capture share from trucks. With rail stocks typically bottoming several months before volumes bottom and CSX trading at only 15 times our estimated 2024 earnings per share, we believe now is an attractive entry point ahead of a potential volume inflection in 2024.
Price target: $37.
Buy • Price $20.97 on June 1
by BofA Global Research
We initiate coverage of leading restaurant technology provider Toast with a Buy rating and $26 price objective. Our checks at last week’s National Restaurant Association conference illustrated that Toast delivers best-in-class, cloud-native, point-of-sale software/hardware technology to the restaurant industry. Beyond point of sale, the innovative Toast platform integrates payment processing, restaurant operations, digital ordering and delivery, team and table management, payroll, lending, and reporting/analytics.
Adjusted Ebitda margins have steadily improved over the past five quarters, and Toast forecasts positive adjusted Ebitda for the second half of 2023. Free cash flow is also expected to turn positive later this year.
Strong • Buy Price $106.39 on June 1
by Raymond James
We are increasing our earnings forecast following Ryanair’s fiscal fourth-quarter 2023 report and investor meetings that we hosted last week, primarily reflecting a stronger fare environment and lower fuel forecast, partly offset by the updated fuel hedge position and greater nonfuel unit cost pressure.
Despite embedding characteristic conservatism in its fiscal-2024 outlook, near-term trends remain constructive, and the recently announced MAX-10 order combined with an increased likelihood of industry consolidation in Europe bode well for Ryanair’s longer-term outlook, given its cost and balance sheet (net cash) advantage relative peers.
We continue to believe that Ryanair is well positioned to take advantage of further demand strengthening in the region as well as having a unique advantage to avoid possible shocks in the industry as peers grapple with higher debt burdens and cost pressures.
Target price: $128.
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