When it comes to stock investing, not all rating and price target changes are created equal. Some upgrades and downgrades carry more weight in the market simply based on the issuing sell-side analyst. The same goes for price target adjustments.
in a sea of swirling stock ratings and price targets, prominent research firms tend to have a greater impact on share price. Fresh opinions from the likes of J.P. Morgan, Goldman Sachs, Credit Suisse, and Barclays can spark significant trading volume. Updates from lesser-known firms tend to have a less pronounced effect.
So, when a well-regarded analyst upgrades a stock and simultaneously raises his or her price target, this can be considered the holy grail. While December 17th quadruple witching event grabbed most of the market’s attention, a handful of stocks got doubly bullish upgrades from top research firms to complete the trifecta. These three are the best in the show.
Is Martin Marietta Materials Stock a Buy?
Martin Marietta Materials (NYSE:MLM) was just upgraded from equal weight to outperform at Barclays. With the stock price having run past the analyst’s previous target of $415, a fresh $485 target was issued. The new price target implies 11% upside which would be a solid add-on return considering shares of the building materials producer are up 59% over the last 12 months.
In the last three months, seven other sell-side firms have called Martin Marietta Materials a ‘buy’. Although Barclays was late to the party on this one, the upgrade nevertheless had an impact on the stock which rose as much as 1.3% before broad market weakness dragged it lower. The move came one week after Truist Financial upgraded to a buy and Street-high $525 price target.
The company is expected to continue to benefit from sturdy demand for cement and other construction materials, higher pricing, and recent acquisitions. A commercial real estate market that is still playing catch-up with the residential market along with government infrastructure funding is also expected to put the wind at Martin Marietta’s back in 2022. Although margins will likely be pressured by higher energy and raw materials costs, analysts are forecasting 24% profit growth next year.
Will Edwards Lifesciences Grow Profits in 2022?
J.P. Morgan Chase upgraded Edwards Lifesciences (NYSE:EW) from neutral to overweight on December 17th and raised its price target from $114 to $140. The market took notice of the double hike as shares of the heart disease specialist advanced 2.1% in a down market. The firm’s new target is significantly above the consensus price target of approximately $125.
With 16 buy ratings and no sell ratings (in addition to 4 holds), Edwards Lifesciences is one of the most well-liked names in the large-cap medical space. Profits are on pace to jump more than 20% this year thanks to increasing global demand for the company’s cardiac devices for both high-risk and elective surgeries. As hospital conditions normalized during the year, the use of Edwards’ SAPIEN heart valves and PASCAL transcatheter valve repair systems were up from 2019 levels.
Next year the Street is anticipating more modest growth in the 10% to 15% range. Yet it thinks this will be sufficient to sustain the stock’s upward trajectory. Edwards Lifesciences expects its core transcatheter aortic valve replacement (TAVR) market to top $7 billion globally by 2024 compared to a projected $3.1 billion this year. The minimally invasive TAVR procedure is considered a desirable alternative to open-heart surgery for higher-risk patients.
Is Six Flags Stock Undervalued?
It’s been a roller coaster ride for Six Flags (NYSE:SIX) shareholders since the start of the pandemic. After dipping to its lowest level in a decade in 2020, the stock climbed as high as $50 in March only to revert to bear market territory. Now trading around $40, Credit Suisse says it’s time to buy.
Yesterday the closely followed research group upgraded the world’s biggest regional theme park operator from neutral to outperform. Although it raised its price target by only a buck, the new $53 bullseye implies 32% upside—and a possible return to pre-pandemic levels.
Six Flags has become one of the most popular reopening trades based on the expectation that pent-up entertainment demand will drive heavy traffic to its 27 North American parks. While customer visits have indeed picked up, the company is not out of the woods yet. Last quarter park attendance was at 92% of pre-Covid levels. This reflected a return of family thrill-seekers but a lack of school groups that tend to book in advance.
The recent rise in Omicron cases threatens to derail Six Flags’ progress. Still, analysts see better times ahead based on strong underlying demand, the impact of rising vaccination rates, and the potential return of schools and other large groups. The consensus EPS estimate of $2.20 for next year implies 35% bottom-line growth. So given the stock’s 18x forward P/E ratio, Six Flags is looking like an exciting buy opportunity.
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