As the second-quarter earnings season starts to wind down, most equity strategists at the major Wall Street firms we cover are reasonably pleased with overall corporate performance and results. While many companies are still cutting costs, and hiring for the most part remains tepid, there are positive signs for the rest of 2013. The analysts at Deutsche Bank released some new research notes on their top names to buy. We highlight their top stocks to buy where they raised their target price on the back of strong earnings showings.
F5 Networks Inc. (FFIV) came in with a strong upside earnings surprise last week. Management's commentary was very positive concerning the reacceleration of its product cycle into next generation security. The analysts think that the beat and raising guidance show strength in the company’s product sales as next generation security becomes more critical in corporate America. Deutsche Bank raised its price target on the stock from $83 to $100. The Thomson/First Call estimate is at $95.
Facebook Inc. (FB) blew away its numbers last week, as well as a lot of the short sellers who had targeted the stock. Large upsides to revenues, combined with very positive gains for the company in mobile advertising, helped to propel the stock much higher. Plainly put, Facebook reported one of the strongest upside quarters in recent Internet history, with advertising revenues increasing 63%. Deutsche Bank raises its price target to $43 from $37. The consensus target for the stock is at $37.
TripAdvisor Inc. (TRIP) reported stronger-than-expected growth across the board in the second quarter, with an acceleration in non-Expedia click-based advertising revenue and strength in North America and Latin America. The company also spoke very positively on the vacation rental side, with strong uptake of its pay-per-booking model. Deutsche Bank moves its price target from $68 to $73, and the consensus target stands at $67.50.
Panera Bread Co. (PNRA) is another top stock to buy that is wearing out the short sellers. Despite the company actually guiding down some numbers for the first time since 2007, the Deutsche Bank team is very positive on the future growth trajectory and like the attractive valuation of the stock. The analysts raise their price target to $200 from $185. The consensus for the stock is at $190.
Ramco-Gershenson Properties Trust (RPT) is a lesser known name that also had a sizzling quarter. The Deutsche Bank analysts were particularly pleased with the operating metrics and occupancy and rent spreads going higher. They also were encouraged by the addition of several expansion projects during the quarter, which should benefit 2015 earnings, while adding incrementally to the company’s net asset value. The analysts raise their price target to $18 from $17, while the consensus target for the stock is at $17. This real estate investment trust (REIT) pays shareholders a solid 4.2% distribution. REIT distributions may include return of principal.
Wellpoint Inc. (WLP) is directionally targeting earnings per share growth in 2014, although the company believes this goal "will be challenging" due to potential margin pressures in the commercial and Medicare businesses. Deutsche Bank remains positive and moves its price target to $86 from $85. The consensus price target is even higher at $92. Investors are paid a 1.8% dividend.
Delta Air Lines Inc. (DAL) is a top stock to buy at many Wall Street firms and posted a record second quarter. CEO Richard Anderson predicted that 2013 will be one of Delta's most profitable years ever. Deutsche Bank moves its price target up 25% from $20 to $25. The consensus price objective is at $24. Investors receive a 1.1% dividend.
General Dynamics Corp. (GD) blew away the consensus numbers as sales came in 4% higher than expected. Despite the weaker results in defense, Gulfstream more than filled the hole and is driving overall mix of earnings towards commercial (which was 41% in the quarter), which Deutsche Bank argues calls for continued multiple expansion. The analysts raise the price target on the stock from $89 to $97. The consensus target is lower at $91. Investors are paid a 2.6% dividend.
Praxair Inc. (PX) slightly lowered its full-year guidance, but the Deutsche Bank team sees an improvement in the company's European business and are very impressed with the $2.3 billion backlog. Deutsche Bank moves its price target from $125 to $130, while the consensus target is $127. Investors are paid a 2.0% dividend.
Citrix Systems Inc. (CTXS) is a top stock to buy at many of the Wall Street firms we currently cover. The company delivered an outstanding beat across the board with revenues, license revenues, billings and earnings per share all exceeding expectations. Deutsche Bank raises its price target from $80 to $82. The consensus target for the stock is at $80.
Investors looking to add quality stocks to their portfolios at a time when some markets are setting all-time highs may want to look at names that are beating expectations and raising guidance. The Deutsche Bank list of stocks to buy gives investors a wide variety of sectors to choose from. This can help when adding to or constructing a diversified portfolio.