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Bull Moves: Analysts just updated these 3 hot stocks
The largest asset manager in the world was impressed by the recent market gains and clarified this sentiment by updating US equities. In its recent reassessment of conditions in US financial markets, investment giant BlackRock issued a general update for Wall Street. This was not an update on particular stocks, but on the US market as a whole. Explaining the move, BlackRock’s note points out that daily COVID news is just noise – the real news is on the vaccine front, where at least two effective vaccines are only a few months away from public distribution. A viable vaccine for coronavirus disease will bring us back to normal and raise investor mood immeasurably. Hence, the update. “We update US equities to overweight, with a preference for quality large caps driving structural growth trends, as well as smaller companies looking to a potential cyclical recovery,” BlackRock said. The company expects a cyclical recovery of the US economy in 2021 as the coronavirus crisis takes a back seat and the political landscape reverts to pre-Trump models. BlackRock’s overall update was just a sign of confidence in US markets. Several Wall Street research firms have also issued updated positions, taking a micro view and applying their reviews to specific stocks. We pulled three from the TipRanks database and found that they fit BlackRock’s preferences: mid- and large-cap companies with established market positions Cleveland-Cliffs, Inc. (CLF) We’ll start with Cleveland-Cliffs, a mining company based in Ohio. Cleveland-Cliffs specializes in iron production and has four active mines in Minnesota and Michigan. The company focuses on ore mining, optimization and pelletizing, a process that produces iron pellets in a variety of grades suitable for blast furnace smelting, steel making and alloying. Cleveland-Cliffs alone is capable of producing more than 40% of the total US capacity in iron pellets. It also produces flat rolled products in carbon, stainless steel and electrical steel. As the economy resumes growth, recovering from the deeper hits of the coronavirus, Cleveland-Cliffs’ revenues have soared. The company’s revenue has grown since the first quarter of 2020, posting sequential earnings in both the second and third quarters. The third quarter number, at $ 1.65 billion, was in line with analysts’ expectations and far exceeded the $ 555.6 million recorded in the quarter a year ago. The share price reflected this recovery. The stock bottomed out in mid-March, at just $ 3.14 per share. Since then, it has shown impressive growth. Equities have fully recovered those mid-winter losses and are now trading up 32% year to date. Gordon Johnson, an analyst at GLJ Research, sees Cleveland-Cliffs gain as the pandemic recedes and his clients resume normal business. To that end, the analyst has updated CLF from Hold to Buy and its price target of $ 15.80 suggests it will have a 46% upside over the next year. (To see Johnson’s track record, click here) “US auto production has rebounded to pre-pandemic levels, a clear positive for Cliffs, as around 27% of its (future) steel demand comes from that sector. Oil / gas platform counts, while still falling sharply y / y, also appear to have turned the corner in terms of growth. Additionally, our checks indicate potential delays in providing supplements. As we see it, these dynamics, which drove US HRC prices to nearly $ 734 / short ton last week, have the potential to maintain … sustained price levels in 2021, “Johnson said. Overall , the moderate buy consensus rating on CLF is based on a uniform split; the stock has 3 buys and 3 holds on file. However, its recent stock appreciation has pushed it above its average price target. Stocks are selling for $ 10.85, while the average target remains $ 10.09 per hour. (See CLF Stock Analysis on TipRanks) General Electric (GE) General Electric was updated today as well. 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 appliance manufacturer. Today, this multinational conglomerate has its hands in a wide variety of manufacturing sectors, from aviation to electricity to renewable energy. GE’s stock has been on an upward trajectory since the company released its third quarter earnings report in late October. The results, while declining year on year, showed solid sequential gains and exceeded analysts’ expectations. At the top, revenue grew from $ 17.7 billion to $ 19.4 billion, while EPS, which had been negative in the second quarter, turned positive and stood at 6 cents a share. The EPS forecast was a loss of 6 cents. Christopher Glynn, a 5-star analyst with Oppenheimer, sees GE in a fundamentally solid position. The analyst updated GE, taking it from Neutral to Outperform (i.e. Buy). Its price target of $ 12 implies upside potential of ~ 15% for the next 12 months. (To see Glynn’s track record, click here) Glynn commented: “Our Outperform rating reflects the vision of a more accurate reading of cost reduction initiatives that translate into early stages of a clearer breadth of operational momentum. across all segments. We believe working capital performance may surprise to the upside in 2021, considering GE is working through widespread consolidation of facilities and managing working capital throughout 2020 (and continuing). “” We also like duration extended debt structure and strong liquidity, which now offers a context to emerge from the aviation crisis in a position of resilience, “the analyst noted. The recent appreciation of GE’s shares has pushed the share 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 whether the Glynn update and the higher target are the beginning of the overall revaluation of this stock. For now, GE has a moderate buy analyst consensus rating, based on 13 reviews that include 8 purchases and 5 outlets. (See GE stock analysis on TipRanks) Wells Fargo (WFC) Last but not least is Wells Fargo, whose market capitalization of $ 118 billion makes it the fourth largest bank in the world. It is also the fourth largest in the United States, boasting nearly $ 2 trillion in total assets. Wells Fargo offers a full range of banking services, for residential and commercial clients, as well as large corporations and investment firms. The 2020 crown crisis hit Well Fargo hard and the bank’s share price has not yet recovered from its decline. in February and March of this year. Revenue has regained ground in the past nine months, but slowly: the third quarter number, $ 18.7 billion, increased by a full billion dollars from the first quarter, but is still down from the fourth quarter of 19 , the last pre-crown quarter. The Fed’s low interest rate policy held back banks’ profits and Wells Fargo’s net interest income for the third quarter fell 19% year-on-year to $ 9.4 billion. Despite these headwinds, Raymond James analyst David Long is turning bullish on WFC equities. In a research note released today, the analyst double-upgraded the WFC from Underperform (aka Sell) to Outperform (aka Buy) along with a $ 32 price target. (To see Long’s track record, do 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 competitors due to its large exposure to residential real estate loans, which represent 35% of its total loan portfolio (compared to 23%), as house prices have held up well. In addition, its exposure to hotels ( 1.3% of loans) and entertainment (1.0%) are well below the levels of its peers. “The analyst concluded:” With the worst probability in the past, we now believe that his ante tax has touches to the fund, revenues are approaching the minimum, it is finally possible to undertake a multi-year initiative to rationalize expenses and the buy-back activity can return in the near future. “All in all, the analyst consensus rating here is a moderate buy, based on 14 reviews that include 7 buys, 6 takes and 1 sell. The average price target, however, reflects Wall Street’s caution here; at $ 29.08 suggests only limited growth – 1.64% to be precise. (See WFC Stock Analysis on TipRanks) To find good ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buys, one Newly launched tool that combines all of TipRanks’ equity insights those of analysts present Content should be used for informational purposes only It is very important to do your own analysis before making any investment.
