These reports, adopted and edited by Barron’s, have recently been issued by investment and research firms. The reports are a sample of analyst thinking; they should not be construed as the views or recommendations of Barron’s. Some publishers of the reports have provided or hope to provide investment banking or other services to the companies being analyzed.
Outperform • Price $337.20 on July 13
We are raising our price target for Microsoft from $330 to $410, based on 32 times estimated earnings per share for 2024 of $13, close to the 35x 2020 high. IT will improve as the only player with an integrated/AI platform, three actually, and with the main wholesale marketplace through Teams/Azure.
It can also uniquely integrate computer/network/security services, which converge. It has a billion Windows users and 1.5 billion devices; no one in the business segment comes close. It can access its own and other business applications and data to drive network automation and new services. AWS and Google should remain strong in wholesale, but so should the customer base, front-end operating system, and integrated applications.
US Bank Corp
• USB NYSE
Buy • Price $33.74 on July 11
by BofA Securities
We are upgrading our rating on US Bancorp from Neutral to Buy. We believe that investors’ focus on capital accumulation has diverted attention from what ranks among the highest-quality franchises in the U.S. banking industry.
USB’s scale, earnings defensibility and strong execution should drive superior earnings per share growth and outperforming stocks, with stocks trading at eight times estimated earnings per share in 2024, a discount to PNC Financial and Wells Fargo. The company has a resilient fee revenue base supported by a differentiated payment business. The payments company offers upside optionality for stock valuation. Price target: $40.
• IMAX NYSE
Perform better • Price $17.08 on July 13
IMAX remains on Wedbush’s list of best ideas given our view that IMAX 1) is the best way to capitalize on the 2023 cinema boom as it gains market share, 2) is best positioned to capitalize on consumers’ continued shift to premium screens, 3) a solid way to position themselves for China’s ongoing economic recovery, and 4) expanding its relevance globally by expanding local language content (30-40 titles expected in 2023).
The Street currently values IMAX at seven times 2025 earnings before interest, taxes, depreciation and amortization, or Ebitda, in line with a mature domestic theater chain. With IMAX’s significant global footprint, growth potential and market share gains on its growing base of joint venture screens, it’s clear that IMAX stock is currently undervalued. Price target: $26.
• ORCL NYSE
Buy • Price $116.02 on July 12th
by Mizuho Securities
We attended an Oracle event hosted by NYSE CEO Safra Catz and NYSE Executive Vice President Mike Sicilia. We grew confident in Oracle’s ability to drive Oracle Cloud Infrastructure growth, improve margins, and drive cross-selling to the Cerner customer base.
We believe that Oracle has successfully transitioned to becoming the fourth largest hyperscaler, and that, coupled with its leadership in cloud enterprise resource planning, the next phase of Oracle’s journey is just beginning.
We expect Oracle to generate solid revenue and cash flow growth over the medium term and exceed its FY26 targets. We reiterate our Buy rating and $150 price target.
Perform better • Price $195.43 on July 13
by BMO Capital Markets
We start on AMT with an Outperform rating and a target price of $230. We see AMT as the best way to invest in the global theme of wireless connectivity and increased data usage. With a diversified global portfolio, AMT has a long multi-year growth career, is past headwinds, including Sprint churn, and is approaching an Indian resolution.
We expect AMT to deliver a 7.7% compound annual growth rate of 7.7%, above peers, and 10% annual dividend growth for 2023-25 operations/equity adjusted funds. Given that the stock is trading at 18.5 times 2024E AFFO/share, we consider the risk/reward to be compelling.
• HVT NYSE
Buy • Price $30.59 on July 10th
We’re kicking off Haverty’s coverage with a buy rating and a price target of $41. HVT is a family-owned furniture retailer in the Southeast, with 123 stores in 16 states. We believe that the company’s debt-free balance sheet, significant free cash flow and continuously refined operations, combined with the current valuation, make for an attractive investment thesis for the stock.
Furthermore, the migration to the southeastern market of HVT is at the expense of national housing trends and bankruptcies of large stores offer opportunistic growth opportunities. After strong sales during Covid, current financial metrics are clouded and not fully understood by investors.
• M NYSE
Sale • Price $16.13 on July 11
The reason our M rating is Sell is that we believe the company will fall short of Street earnings expectations both this year and long term. In the near term, we believe that the US consumer spending environment will deteriorate and that this will have a more negative impact on M than the market expects.
Longer term, we think The Street is underestimating the pressure on M’s revenue from loss of market share as consumers migrate to online pure-play channels, value-for-money retailers like TJX, and brand-owned stores and websites. Price target: $12.
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