2022 could be a banner year for Amazon.com, Costco, Applied Materials,
These reports, extracted and edited by Barron’s, were recently published by investment and research firms. Reports are a sample of analysts’ thinking; they should not be taken as Barron’s views or recommendations. Some of the reporters have provided, or hope to provide, investment banking or other services to the companies analyzed.
To buy Price $ 3,421.37 on December 23
by Monness Crespi Hardt
After a strong stock market performance in 2020, Amazon has fallen behind on the strong market rally of 2021. However, we believe the company’s fortunes are about to change in 2022. Amazon is uniquely positioned to exit. this crisis as one of the biggest beneficiaries of accelerated digital transformation … Our stock price target of $ 4,500 is based on an enterprise value-to-revenue ratio of 4.3 times our 2022 timeline estimate. Although this figure is higher than the average for the past six years, we believe the company’s e-commerce growth trajectory is very attractive, with Amazon Web Services, digital media, advertising, Alexa , etc. Additionally, the company has started to show more attractive earnings trends over the past two years. However, while Amazon continues to invest aggressively in its business to grow at a rapid rate, its profitability is well below its long-term potential. Therefore, we believe that traditional price / profit measures are not applicable, nor are other profit measures. Thus, we evaluate the stock on an enterprise value to turnover ratio.
Overweight Price $ 71.85 on December 27
We are optimistic about the recreational vehicle space and promote Winnebago as a flagship idea. Winnebago is trading barely above pre-pandemic levels, even though the pandemic has created more RVs for life and wiped out dealer inventory. Meanwhile, the Winnebago brands have gained market share and management has significantly increased earnings power through improved margins, smart acquisitions and share buybacks. With stocks trading below 10 times our neutral cycle scenario, we would be aggressive in small cap value portfolios. [Another RV maker,]
[ticker: THO] It also stands out as oversold, although a recent buyout authorization may be the necessary antidote to the deep pessimism surrounding the name.
Market performance Price $ 36.71 on December 27
by Raymond James
We believe the forecast for the December quarter and fiscal 2022 should turn out to be aggressive. While Peloton has done a number of things to stimulate demand, including lowering the original price of the bike to $ 1,495 (via a $ 400 cut in late August), relaunching Peloton Tread, and dramatically increasing advertising , our analysis of research data continues to show a year-over-year slowdown and less of a sequential increase than we’ve seen in recent years. We continue to believe that significant demand has been pulled forward during the pandemic. So sales don’t experience the typical seasonality that we would expect. We maintain our Market Perform rating, given signs of slowing demand, increasing costs (eg supply chain) and our view that the risk / reward ratio is balanced at current levels. Using our updated sum of parts analysis, we estimate a fair value of $ 38 for the stock (with a bear case of $ 27 and a bull case of $ 51).
Neutral Price $ 550.37 on December 23
continues to have several potential catalysts in the short to medium term, although the price is unclear, given the 50% appreciation of stocks over the past year (vs. 26.5% for the S&P 500) and 18% in the last three months (compared to 6% for SPY). Specifically, we believe December base lineups should return to double-digit territory, thanks to widespread strength across most categories. Second quarter revenue and EBITDA [earnings before interest, taxes, depreciation, and amortization] could, once again, exceed consensus expectations. However, with stocks trading at 23x 2022 calendar EBITDA, we remain neutral.
Strong buy (5 stars) Price $ 155.49 on December 23 by CFRA
Our Strong Buy reflects our vision of improving fundamentals, combined with valuation in line with that of its peers when a premium is justified. We believe demand continues to be driven by transitions in foundry / logic technology, as well as growth in memory capacity, which benefits tool purchases in the fields. [that command] greater dollar content in its [semiconductor-equipment] Business. We see Applied Materials’ services business benefiting from a growing installed base and higher demand for trailing node geometries, and we appreciate its exposure to recurring revenue. We also see an advantage in the estimates, driven by the foundry / logic capacity expansions evident in
[INTC] investment forecasts (25 to 28 billion dollars in 2022, against 18 to 19 billion dollars in 2021), and
‘ [005930.Korea] plans to triple its foundry capacity by 2026.
We see Applied Materials sales increase 14% in fiscal 2022 (October) and 5% in fiscal 2023 after increasing 34% in fiscal 2021. In Semiconductor Systems (which fell 3% in Q4 2021), we see demand driven by foundry / logic customers and higher investments in trailing tech nodes. We believe Applied Global Services revenue (up 6.5% in Q4) still has the edge, with a continued shift towards subscriptions, which accounts for around 60% of segment revenue. Applied Materials’ display business (down 3.2% in the fourth quarter) saw more modest growth, aided by the increasing adoption of OLED in 5G / foldable displays.
To buy Price $ 76.65 on December 23
by Edward Jones
Sysco is one of the leaders in the restaurant industry in North America and has exposure to international markets. Sysco saw the turmoil caused by Covid-19 over the past two years as an opportunity to restructure its business operations, invest more in digital tools, increase customer services and even make a recent acquisition. As a result of these efforts, along with widely reopened restaurants, Sysco is pulling a much stronger business out of the pandemic. We believe it can take significant market share from smaller competitors that haven’t made operational improvements like Sysco’s. Restaurant demand for its products could remain volatile, due to savings at various stages of reopening and rising input costs. However, Sysco is often partially insulated from the short-term impacts of cost inflation. It can pass a lot of its higher food costs onto customers, but it can also cause them to switch to cheaper, less profitable items. Supply shortages and finding and hiring qualified employees in a tight labor market are unlikely to help either. But ultimately the cost and labor issues should resolve themselves, allowing Sysco’s business improvements to shine through.
To buy Price $ 166.42 on December 29
Chart Industries has won over $ 120 million in orders for four liquefaction projects (small scale hydrogen and liquid natural gas). We estimate that means fourth quarter 2021 orders will be at least $ 400 million, against our estimate of $ 352 million and the FactSet consensus of $ 350 million. Chart also announced releases on engineering work (limited notice) on two of the major LNG export terminal projects that are expected to result in a final investment decision in 2022. Engineering work usually precedes the decision. to go ahead with the full construction. We expect Chart to receive a Full Proceed Notice, or NTP, for Venture Global Plaquemines Phase 1 shortly. Our order outlook for fiscal 2022 also includes a $ 350 million order for
[TELL] Driftwood Phase 1 and a $ 375 million order for
[LNG] Corpus Christi Step 3.
However, Chart continues to face short-term headwinds due to rising material costs and supply chain disruption. As a result, we see a downside risk to estimated diluted earnings for Q4 2021 (FactSet consensus: 73 cents per share) and our estimate for 2022, which is 7% below consensus. However, our estimate of diluted EPS for 2023 is 15% above consensus, due to the large rewards expected for LNG and growth in specialty products. We believe Venture Global’s Dec. 2 announcement that it will invest more than $ 10 billion to develop a fourth LNG export facility increases the chances that it will also proceed with Phase 2 of Plaquemines. This would add to our expectations and to those of Street. Target price: $ 206.
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