Journal Editorial Report: The week's best and worst from Kim Strassel, Kyle Peterson, Allysia Finley and Dan Henninger. Image: Chip Somodevilla/AFP via Getty Images
Journal Editorial Report: The week's best and worst from Kim Strassel, Kyle Peterson, Allysia Finley and Dan Henninger. Image: Chip Somodevilla/AFP via Getty Images
Exxon Mobil's dividend yield has continued to rise in a year that the stock has fallen by more than 50%. What Happened: Exxon Mobil Corporation's (NYSE: XOM) dividend yield is sitting above 10% as of Thursday.The company paid out a dividend of 87 cents in September. Based on the ex-dividend date of Aug. 12, the annual dividend rate was 7.9%.The dividend yield was 7.9% and 5.8% at the ex-dividend dates of the other dividends paid in 2020.In 2019, all four ex-dividend dates were at yields of 5% or less. In 2018, all four dates were 4.1% or less. Charts dating back to 1989 show that Exxon Mobil's dividend yield is at its highest-ever level. What's Next: Exxon Mobil has a history of raising its quarterly dividend payout.The 87-cent quarterly payout has stayed the same for six straight quarters.Since 2008, ExxonMobil has never had the same quarterly dividend payout for more than four straight quarters.MKM Partners analyst John Gerdes has suggested ExxonMobil may need to raise $15 billion in debt to support its dividend over the next two years.Options trading trends are also pointing to a potential dividend cut this year or the next. XOM Price Action: Shares of ExxonMobil were down 0.2% at $34.32 at the close Thursday.Photo by Michael Rivera via Wikimedia. See more from Benzinga * Dave Portnoy Shares Thoughts On Penn Stock Offering, Barstool App Figures * Churchill Capital Launches Fifth SPAC * Spotify, Match Group, Epic Games Join Fight Against Apple's App Store(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Markets are volatile, there can be no doubt. So far this month, the S&P 500 has fallen 9% from its peak. The tech-heavy NASDAQ, which had led the gainers all summer, is now leading the on the fall, having lost 11% since September 2. The three-week tumble has investors worried that we may be on the brink of another bear market.The headwinds are strong. The usual September swoon, the upcoming election, doubts about another round of economic stimulus – all are putting downward pressure on the stock markets.Which doesn’t mean that there are no opportunities. As the old saw goes, “Bulls and bears can both make money, while the pigs get slaughtered.” A falling market may worry investors, but a smart strategy can prevent the portfolio from losing too much long-term value while maintaining a steady income. Dividend stocks, which feed into the income stream, can be a key part of such a strategy.Using the data available in the TipRanks database, we’ve pulled up three stocks with high yields – from 7% to 11%, or up to 6 times the average dividend found on the S&P 500 index. Even better, these stocks are seen as Strong Buys by Wall Street’s analysts. Let’s find out why.Williams Companies (WMB)We start with Williams Companies, an Oklahoma-based energy company. Williams controls pipelines connecting Rocky Mountain natural gas fields with the Pacific Northwest region, and Appalachian and Texan fields with users in the Northeast and transport terminals on the Gulf Coast. The company’s primary operations are the processing and transport of natural gas, with additional ops in crude oil and energy generation. Williams handles nearly one-third of all US commercial and residential natural gas use.The essential nature of Williams’ business – really, modern society simply cannot get along without reliable energy sources – has insulated the company from some of the economic turndown in 1H20. Quarterly revenues slid from $2.1 billion at the end of last year to $1.9 billion in Q1 and $1.7 billion in Q2. EPS in the first half was 26 cents for Q1 and 25 cents for Q2 – but this was consistent with EPS results for the previous three quarters. The generally sound financial base supported the company’s reliable dividend. Williams has been raising that payment for the past four years, and even the corona crisis could not derail it. At 40 cents per common share, the dividend annualizes to $1.60 and yields an impressive 7.7%. The next payment is scheduled for September 28.Truist analyst Tristan Richardson sees Williams as one of the midstream sector’s best positioned companies.“We continue to look to WMB as a defensive component of midstream and favor its 2H prospects as broader midstream grasps at recovery… Beyond 2020 we see the value proposition as a stable footprint with free cash flow generation even in the current environment. We also see room for incremental leverage reduction throughout our forecast period on scaled back capital plans and even with the stable dividend. We look for modestly lower capex in 2021, however unlike more G&P oriented midstream firms, we see a project backlog in downstream that should support very modest growth,” Richardson noted.Accordingly, Richardson rates WMB shares as a Buy, and his $26 price target implies a 30% upside potential from current levels. (To watch Richardson’s track record, click here)Overall, the Strong Buy analyst consensus rating on WMB is based on 11 Buy reviews against just a single Hold. The stock’s current share price is $19.91 and the average price target is $24.58, making the one-year upside potential 23%. (See WMB stock analysis on TipRanks)Magellan Midstream (MMP)The second stock on our list is another midstream energy company, Magellan. This is another Oklahoma-based firm, with a network of assets across much of the US from the Rocky Mountains to the Mississippi Valley, and into the Southeast. Magellan’s network transports crude oil and refined products, and includes Gulf Coast export shipping terminals.Magellan's total revenues rose sequentially to $782.8 in Q1, and EPS came in at $1.28, well above the forecast. These numbers turned down drastically in Q2, as revenue fell to $460.4 million and EPS collapsed to 65 cents. The outlook for Q3 predicts a modest recovery, with EPS forecast at 85 cents. The company strengthened its position in the second quarter with an issue of 10-year senior notes, totaling $500 million, at 3.25%. This reduced the company’s debt service payments, and shored up liquidity, making possible the maintenance of the dividend.The dividend was kept steady at $1.0275 per common share quarterly. Annualized, this comes to $4.11, a good absolute return, and gives a yield of 11.1%, giving MMP a far higher return than Treasury bonds or the average S&P-listed stock.Well Fargo analyst Praneeth Satish believes that MMP has strong prospects for recovery. “[We] view near-term weakness in refined products demand as temporary and recovering. In the interim, MMP remains well positioned given its strong balance sheet and liquidity position, and ratable cash flow stream…” Satish goes on to note that the dividend appears secure for the near-term: “The company plans to maintain the current quarterly distribution for the rest of the year.”In line with this generally upbeat outlook, Satish gives MMP an Overweight (i.e. Buy) rating, and a $54 price target that implies 57% growth in the coming year. (To watch Satish’s track record, click here)Net net, MMP shares have a unanimous Strong Buy analyst consensus rating, a show of confidence by Wall Street’s analyst corps. The stock is selling for $33.44, and the average price target of $51.13 implies 53% growth in the year ahead. (See MMP stock analysis on TipRanks)Ready Capital Corporation (RC)The second stock on our list is a real estate investment trust. No surprise finding one of these in a list of strong dividend payers – REITs have long been known for their high dividend payments. Ready Capital, which focuses on the commercial mortgage niche of the REIT sector, has a portfolio of loans in real estate securities and multi-family dwellings. RC has provided more than $3 billion in capital to its loan customers.In the first quarter of this year, when the coronavirus hit, the economy turned south, and business came to a standstill, Ready Capital took a heavy blow. Revenues fell by 58%, and Q1 EPS came in at just one penny. Things turned around in Q2, however, after the company took measures – including increasing liquidity, reducing liabilities, and increasing involvement in government-sponsored lending – to shore up business. Revenues rose to $87 million and EPS rebounded to 70 cents.In the wake of the strong Q2 results, RC also started restoring its dividend. In Q1 the company had slashed the payment from 40 cents to 25 cents; in the most recent declaration, for an October 30 payment, the new dividend is set at 30 cents per share. This annualizes to $1.20 and gives a strong yield of 9.9%.Crispin Love, writing from Piper Sandler, notes the company’s success in getting back on track.“Given low interest rates, Ready Capital had a record $1.2B in residential mortgage originations versus our $1.1B estimate. Gain on sale margins were also at record levels. We are calculating gain on sale margins of 3.7%, up from 2.4% in 1Q20,” Love wrote.In a separate note, written after the dividend declaration, Love added, “We believe that the Board's actions show an increased confidence for the company to get back to its pre-pandemic $0.40 dividend. In recent earnings calls, management has commented that its goal is to get back to stabilized earnings above $0.40, which would support a dividend more in-line with pre-pandemic levels.”To this end, Love rates RC an Overweight (i.e. Buy) along with a $12 price target, suggesting an upside of 14%. (To watch Love’s track record, click here)All in all, Ready Capital has a unanimous Strong Buy analyst consensus rating, based on 4 recent positive reviews. The stock has an average price target of $11.50, which gives a 9% upside from the current share price of $10.51. (See RC stock analysis on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Tesla Inc's (NASDAQ: TSLA) all-electric Semi will rely on the progress of Tesla's newly revealed 4860 battery cells.Nikola Corporation (NASDAQ: NKLA) is in litigation with Tesla, alleging Tesla stole the design of its Nikola One concept. Now Tesla is striking back in court. Tesla alleges in a Wednesday filing in the U.S. District Court case former Nikola Executive Chairman Trevor Milton was aware of the Road Runner truck design in 2014 and/or 2015, before Nikola unveiled a similarly designed semi concept, according to Electrek. Tesla said in the filing that Nikola stole its truck design from Adriano Mudri, director of design at the automotive company Rimac. If true, this would invalidate the patents Nikola is using to accuse Tesla of stealing its design.Photo courtesy of Tesla.See more from Benzinga * Ring Teams With Tesla To Enhance Security With Built-In Cameras * Elon Musk Jokes About Producing Electric Jet — But Is He Serious? * Elon Musk Has Promised A K Tesla Before: More On The Battery Day Announcement(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
As tensions escalate between the US and China—over trade, Hong Kong, Taiwan, and even TikTok—officials have expressed concern that Beijing could use its stockpile of US Treasury bonds to destabilize the US economy and pressure Washington into backing down. Regular people are worried too: In a 2018 Pew Research Center survey, America’s debt to China was the top concern among respondents in the US, with 89% saying the problem was “very serious.” There’s a lot of fear, confusion, and misapprehension about why the US is in debt to China and what what would happen if China were to call it in.
California is aiming to ban sales of gas-powered vehicles by 2035, and Morgan Stanley has two stock picks for those willing to play a long game. One is easy to guess, the other may surprise you.
Macquarie analyst Chad Beynon launched coverage of the online sports-betting stock with an Outperform rating.
The economic downturn in 2020 has been particularly hard on oil and gas stocks. However, Bank of America analyst Asit Sen believes energy earnings have troughed for this cycle and are now on the upswing.Bank of America is projecting volumes and EBITDA margins will improve in coming quarters, and selective traders have plenty of buying opportunities in the space."We believe the 2H20 outlook is 'less bad' following a very tough 1H20 and we are close to a cyclical bottom," Sen wrote in a Thursday note.Looking ahead to 2022, Sen is projecting a normalization of global oil stockpiles and a recovery in global demand that exceeds supply.Clean Energy Transition: Sen supports the idea of a global transition to clean energy, but he isn't anticipating that transition will have a meaningful impact on global oil demand for at least another decade. Meanwhile, he said investors don't seem to fully appreciate the impact that upstream underinvestment will have on oil supply.The first half of 2020 was brutal for North American exploration and production companies, but Sen said the tough environment has forced companies to focus on three main goals: shoring up their balance sheets, eliminating capex growth and providing investors visibility related to dividends and free cash flows.Looking ahead, Sen said investors should closely monitor cash margins, reinvestment ratios and free cash flow in coming quarters. His preferred stock picks have sustained capex and provided cash flow and dividend visibility for investors.How To Play It: Here are Bank of America's top 10 US oil & gas shale stocks to buy: * Diamondback Energy Inc (NASDAQ: FANG) * Parsley Energy Inc (NYSE: PE) * WPX Energy Inc (NYSE: WPX) * Ovintiv Inc (NYSE: OVV) * National Fuel Gas Co. (NYSE: NFG) * Suncor Energy Inc. (NYSE: SU) * Canadian Natural Resources Ltd (NYSE: CNQ) * Enbridge Inc (NYSE: ENB) * TC PIPELINES LP Common Stock (NYSE: TRP) * Brookfield Infrastructure Partners L.P. (NYSE: BIP)Benzinga's Take: Few investors would argue that the world will still be relying primarily on fossil fuels in 2120. However, oil and gas still account for 69% of U.S. energy consumption, and industry insiders don't see peak global oil production happening until at least 2030.Related Links:Analyst Upgrades Halliburton, Says Cost Cuts Will Increase Profitability Of Next Cycle Here's How Much Investing 0 In The USO Oil Fund In 2010 Would Be Worth TodaySee more from Benzinga * Experts React To Jobs Report: 'Need For Further Fiscal Action Is Obvious' * Here's How Much Investing ,000 In Intel At Dot-Com Bubble Peak Would Be Worth Today * ETF Short Sellers Targeting Small Caps, Tech Stocks(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The FIRE movement is a ‘motivational platform’ to get people thinking about their future financial stability, he says
5G, first introduced two years ago, is expanding past its initial phases and has reached the edge of a great boom. There are 105 5G networks worldwide, and device manufacturers have released over 160 5G smartphones, tablets, and other products onto the commercial market – and there are over 230 million 5G subscribers worldwide. The new tech is here, and it’s ready to expand.That expansion will bring a series of benefits to wireless users. The higher speeds on the networks have gotten the most attention, but 5G will also over 10 times higher data transfer rates, one-tenth the network latency, and far higher connection density capabilities. That last may turn out to be the key to 5G’s long-term success, as related technologies like IoT, autonomous cars, and smart homes multiply the connected devices in our lives.The expansion and benefits of 5G have attracted attention from some of Wall Street’s high-rated analysts; specifically, it has directed the analysts’ attention to the companies that will build and maintain 5G as it expands. These are stocks that are sure to benefit from the network tech, and 5-star analysts say that now – before 5G becomes ubiquitous – is the time to buy in.And with that in mind, we used TipRanks database to pinpoint two top 5G picks from top analysts. These are stocks with Buy ratings and recent share appreciation. Let’s find out what else makes them leaders in the 5G stock boom.Ceva, Inc. (CEVA)The first company on our list, Ceva, is part of the semiconductor industry. The company is a developer of digital signal processing (DSP) technology that is essential to the proper functioning of wireless devices in the consumer, industrial, mobile, and IoT niches. Ceva’s DSP architecture is also becoming an increasingly important feature of 5G capability, and the company has, in recent years, teamed up with handset maker Nokia to collaborate on 5G technology.Ceva saw strong gains in both 1Q20 and 2Q20 as EPS beat the forecasts and showed improvements year-over-year. Revenues in Q2 were $23.6 million, up 28% from Q2 2019. Ceva’s balance sheet is positive, with $157 million cash and cash equivalents and no outstanding debt.Ceva’s share performance has been strong, too. The stock has outperformed the broader markets, and, despite some recent losses, is up 38% year-to-date. Gus Richard, a 5-star analyst with Northland Securities, sees several factors working together to lift CEVA in coming months. He notes the company’s business model, licensing intellectual property and collecting on royalties, and sees its 5G exposure as a net plus. “With the banning of Huawei CEVA’s customer, ZTE, is getting more of the 5G infrastructure business in China and we expect this revenue to increase from $1M in Q2 to $2M to $2.5M in Q3. In addition, we expect NOK to start to ramp next year. Finally, we expect a surge in WiFi, Bluetooth including smart home appliances, such as smart TV, smart speaker, connected lightbulbs, thermostat, and wearables to drive royalty revenue in the coming years.”As a result, Richard upgraded CEVA shares to Outperform (i.e. Buy), and his $48 price target implies room for 29% upside growth in the coming year. (To watch Richard’s track record, click here)Overall, with 3 Buy and 2 Hold reviews given recently, CEVA gets a Moderate Buy rating from the analyst consensus. The stock has an average price target of $48.25, in line with Richard’s and also indicating a ~29% upside potential (See Ceva stock analysis on TipRanks)Skyworks Solutions (SWKS)This mid-cap semiconductor chip maker is major part of Apple’s iPhone supply line. In fact, Skyworks saw 51% of its 2019 revenue from sales to Apple. That Apple exposure, however, makes the connection to 5G clear; Apple is expected to release the new 5G capable iPhone 12 series in the next few weeks, and by some estimates, the device maker can expected up to one-third of its 900 million-strong installed user base to switch to the new devices in the next 18 months. That’s a whole lot chip sales for Skyworks.The company is heavily invested in IoT chips, and its MIMI technology is essential to 5G small cell units, and important part of the network’s infrastructure.Skyworks shares have fully recovered from the mid-winter swoon, and are up 14% year-to-date. Earnings remained positive throughout the height of the corona crisis, and are expected to start turning upwards in the next quarterly report.Rosenblatt’s Kevin Cassidy, another analyst rated 5-stars by TipRanks, was impressed enough by Skyworks’ performance to initiate coverage of the stock with a Buy rating and a $160 price target. His target indicates a potential upside of 17% for the stock. (To watch Cassidy’s track record, click here)Supporting his stance, Cassidy says, “Skyworks is well positioned to benefit from the increasing radio frequency front-end content in 5G enabled devices. We are modeling above semiconductor industry revenue growth of 10% over the next two years. The company can leverage its multiple generations of cellular RF technology leadership and smartphone OEM relationship to expand its customer base. The increasing RF front-end design complexity will continue the company’s long-term margin expansion, in our view. Improving profitability, pristine balance sheet and shareholder friendly policy makes SWKS an attractive Buy in front of the 5th generation of communications."All in all, the Moderate Buy analyst consensus rating on Skyworks is based on 15 Buy reviews and 7 Holds, set in the past two months. The shares are selling for $136.35 and their average price target of $148.58 suggests a one-year upside of 10%. (See Skyworks’ stock analysis at TipRanks)To find good ideas for 5G stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
A Biden presidency is a distinct possibility in 2021, which would resulting some challenges for tech companies — and one potential advantage.
ChargePoint, the world's largest provider of electric-vehicle charging stations, said on Thursday it is going public with a reverse-merger agreement worth $2.4 billion.
The bad news keeps piling up for EV truck maker Nikola (NKLA). You could darkly suggest if the company had any of the trucks it has yet to build at its disposal it could load all the negative sentiment and drop it off somewhere out of reach.But in addition to not having any product, it is now without its founder too, after Trevor Milton resigned earlier this week. It is now also without the support of Wedbush analyst Daniel Ives. While previously Ives’ support was only muted and underpinned by calling Nikola a “prove me” stock, the latest developments have resulted in a downgrade.Ives’ rating drops from Neutral (i.e. Hold) to Underperform (i.e. Sell), while the price target is severely slashed from $45 to $15. This figure implies a 21% downside from current levels. (To watch Ives’ track record, click here)Ives’ downgrade is due to two main reasons. First, Milton and Nikola are inseparable just like Musk and Tesla. After Milton was accused in a report by short seller Hindenburg Research of duping investors, Ives was quick to defend the colorful founder, citing the recent General Motors deal as proof an industry heavyweight could potentially be in the making. The 5-star analyst suggested investors give Nikola more time to execute Milton’s grand vision. Essentially, Ives believes Milton’s departure denies Nikola its X factor.“Despite the controversy and noise surrounding Milton, he was the visionary, architect and internal/external force driving Nikola for the coming years and we believe he leaves a huge void that is hard to replace,” Ives said.Ives’ second reason for withdrawing support is more to do with recent external developments. Despite investors disappointment with Tesla’s Battery Day, Ives counts Tesla’s plans as a harbinger of things to come in the EV sector.“We believe with some of the eye popping battery innovations coming out of Tesla looking to reduce battery costs well below the $100/kWH threshold, this potentially changes the game with further price parity on the EV front and throws a wrench in the ROI story around hydrogen fuel cell vehicles over the long term,” Ives commented.So, that’s the Wedbush View, what does the view on Nikola look like from the other side of the Street? NKLA currently has a Hold consensus rating based on 2 Buys and Holds, each, and Ives’ newly minted Sell. Interestingly, the average price target of $37 could still yield returns of 93% in the coming year. However, look out for any changes in analysts’ models over the coming days. (See NKLA stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Johnson & Johnson, one of the world’s largest and most comprehensive manufacturers of healthcare products, said on Wednesday that it has begun its large-scale, pivotal, multi-country Phase-3 trial for its COVID-19 vaccine candidate, sending shares as high as 2%.
The greedy are, at last, getting blown out, and the prudent being vindicated. I see three buckets of stocks that intrigue me now.
An analyst at UBS cautions that while Apple shares typically outperform ahead of an iPhone launch, they have generally underperformed the market after a launch.
The man behind the risk-on, risk-off ATAC Rotation Fund, which has delivered a 50% return so far this year, has had some prescient calls of late, and he had another one last week when he said lumber prices were signaling an imminent drop in stock prices.
For those that thought the extreme market volatility was behind us, think again. This month, another burst of volatility was brought on by concerns about the U.S. economic recovery, hefty valuations, and a second wave of COVID-19. While challenging at times, Wall Street pros believe the healthcare space is becoming more exciting, with several long-term tailwinds on the horizon.As healthcare stocks tend to be riskier in nature, we narrowed our search to include only the best of the best, according to the analyst community.TipRanks’ database revealed three such stocks that won’t break the bank; each one trades for less than $5 per share and has earned a “Strong Buy” consensus rating from the Street’s pros. Not to mention triple-digit upside potential is on the table here.VYNE Therapeutics (VYNE)Using its Molecule Stabilizing Technology (MST) platform, VYNE Therapeutics hopes to solve some of the most difficult therapeutic challenges. Given the strong performance of one of its products and its $1.52 share price, some members of the Street think that now is the time to snap up shares.Singing the healthcare name’s praises is Cantor analyst Louise Chen. “We continue to believe the market opportunity for VYNE's products and pipeline are underappreciated. Therefore, upwards earnings revisions and multiple expansion should drive VYNE shares higher, in our view,” the analyst opined.Chen is particularly excited about Amzeeq, which is the first topical minocycline product in the U.S. designed for the treatment of inflammatory lesions of non-modular moderate-to-severe acne vulgaris in adults and pediatric patients aged nine years and older. The therapy was launched back in January. “We believe that Amzeeq is a highly competitive product with supporting data that demonstrate a topical minocycline treatment does not pose a risk of resistance,” the analyst noted.Monitoring the launch closely, Chen points out that against the backdrop of COVID-19, Rx trends indicate a strong recovery. Throughout the industry, the pandemic has weighed on the launches of new therapies. Additionally, the number of unique prescribers exceeded 4,200 during Q2 2020. To this end, the analyst argues “the peak sales potential of Amzeeq is underappreciated and the launch could exceed expectations, despite the COVID-19 pandemic.”To support this claim, Chen cites a competing product’s launch. Seysara is an oral product developed by Almirall for the same indication. Like VYNE’s therapy, COVID-19 impacted the launch, but Rx trends are also rebounding, with the company expecting peak sales to reach $150-$200 million. That being said, given that Seysara is an oral product, Chen believes Amzeeq offers a better value proposition, with the launch trajectories likely to differ.It should be noted that the President and CEO of VYNE, David Domzalski, and CFO Andrew Saik both bought up shares of the company this month. “We believe they are excited about the rebrand of the company and they purchased stock to show their commitment to the company and enthusiasm for VYNE’s potential as they get ready to potentially launch Zilxi (its topical foam product) in moderate-to-severe rosacea in Q4 2020,” Chen said. To this end, Chen rates VYNE an Overweight (i.e. Buy) along with a $15 price target. This target conveys her confidence in VYNE’s ability to skyrocket 893% in the next year. (To watch Chen’s track record, click here)Turning now to the rest of the Street, other analysts echo Chen’s sentiment. 4 Buys and no Holds or Sells add up to a Strong Buy consensus rating. With an average price target of $7.75, the upside potential comes in at 413%. (See VYNE stock analysis on TipRanks)BioDelivery Sciences (BDSI)Working to deliver innovative therapies, BioDelivery wants to improve the lives of patients with serious and debilitating chronic conditions. While shares have fallen 41% year-to-date, several analysts believe that at $3.69, its share price reflects an attractive entry point.Northland Capital’s Tim Chiang is among those recommending that investors purchase shares on the weakness. With Belbuca (its Schedule III opioid) and Symproic (its naldemedine for the treatment of opioid induced constipation) volume trends holding up strong, he thinks his 2H20 estimates are attainable and that there’s potential for upside. During Q2 2020, there were record high sales volumes of 104,687 prescriptions, up 31% year-over-year.Turning to Belbuca, which was designed for use in patients with pain severe enough to require daily, around the clock, long-term opioid treatments, it was approved by the FDA back in 2015. Buprenorphine, the active ingredient, is a partial opioid agonist and is classified as a Schedule III controlled substance, with other opioids like fentanyl, morphine and oxycodone being deemed Schedule II. Schedule II drugs have more dosing restrictions as they are more likely to be abused, and can’t be refilled like Schedule III therapies.Due to the ongoing opioid crisis, which has led to overdose deaths and a high rate of addiction, physicians are shifting away from prescribing traditional opioids like oxycodone, which bodes well for BDSI, in Chiang’s opinion.Based on Chiang’s estimates, Belbuca could generate more than 500,000 prescriptions in 2020, resulting in sales of approximately $138 million. He also believes that Belbuca’s market share could increase from the low-single digits into the mid-to-high single digits over the next 4-5 years, with annual sales hitting $230 million by CY22 and $320 million by CY25.“While COVID-19 has significantly impacted the U.S. healthcare system, we believe the incidence of chronic pain (defined as pain lasting longer than 12 weeks) has not been impacted; in fact we believe the incidence may be rising due to the pandemic. Based on an estimated 13.5 million opioid prescriptions dispensed in 2020 for chronic pain (Schedule II / III), we believe our 4% market share estimate for Belbuca this year could be conservative,” the analyst explained.Everything that BDSI has going for it convinced Chiang to keep an Outperform (i.e. Buy) rating on the stock. Along with the call, he attached a $9 price target, suggesting 143% upside potential. (To watch Chiang’s track record, click here)Are other analysts in agreement? They are. Only Buy ratings, 4, in fact, have been issued in the last three months. Therefore, the message is clear: BDSI is a Strong Buy. Given the $7.75 average price target, shares could climb 109% higher in the next year. (See BDSI stock analysis ratings on TipRanks)Chiasma (CHMA)By leveraging Transient Permeability Enhancer (TPE) technology, Chiasma is able to convert select peptide-based injectables into oral formulations. Currently going for $4.37 apiece, Wall Street is pounding the table on this healthcare name.On August 31, the company announced that Mycapssa, the first and only oral somatostatin analog (SSA) approved as a long-term maintenance treatment for acromegaly patients who have responded to and tolerated octreotide or lanreotide (other approved therapies), had been launched one month ahead of guidance. Acromegaly is an orphan disease typically caused by a benign tumor on the pituitary that results in the excessive secretion of growth hormones, causing bone overgrowth and enlargement of internal organs with co-morbidities.In terms of pricing, a 28-day supply goes for $5,152, with CHMA intending to build on physician and patient experience with octreotide, incorporate telemedicine and build a sales team of 45 representatives.Weighing in on this development for Piper Sandler, 5-star analyst Edward Tenthoff tells clients he is optimistic about the therapy’s prospects. “We see strong demand for an effective oral therapy from acromegaly patients who currently receive painful monthly injections and experience break-through symptoms,” he commented. To this end, Tenthoff still expects total Mycapssa sales to clock in at $3 million in Q4 2020.Tenthoff also points out that with the first commercial sale of Mycapssa, CHMA is set to receive $15 million from Healthcare Royalty Partners (HCR) and $10 million in early 2022. As part of the deal, HCR is eligible for 12.25% up to $125 million, 4% from $125-250 million and 1% on sales over $250 million.When it comes to the next potential catalyst, Tenthoff cites the top-line Phase 3 MPOWERED data readout, which is slated for Q4 2020, as it could “ultimately support European approval.”It should come as no surprise, then, that Tenthoff stayed with the bulls. He continues to put an Overweight rating and $19 price target on the stock, implying 319% upside potential. (To watch Tenthoff’s track record, click here)All in all, other analysts are on the same page. CHMA’s Strong Buy consensus rating breaks down into only Buy ratings, 4 to be exact. The $12.33 average price target brings the upside potential to 182%. (See Chiasma stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
With the iPhone 12 launch around the corner, all eyes are on Apple (AAPL). The launch is set to come in the next quarter, and investors are eagerly waiting to see what the tech giant has up its sleeve.5-star analyst Chris Caso, of Raymond James, tells clients that based on production checks conducted across the iPhone supply chain last week, total production estimates are in-line with the Street’s calls. That being said, he points to mix as a potential driver of significant upside.“Current production plans suggest the most favorable mix we’ve ever seen for an iPhone launch, and the introduction of a fourth iPhone model at a price between iPhone 12 and iPhone 12 Pro will also help to boost blended average selling prices (ASPs). While the stock has already had a strong run since our upgrade last summer, we don’t yet think all the benefits of what we expect to be a two-year 5G upgrade cycle are yet reflected in consensus estimates,” Caso commented.According to Caso, these checks confirm that the iPhone 12 lineup will feature four new models: an entry-level iPhone 12, iPhone 12 Max, Pro and Max Pro.The sources couldn’t provide any insights on pricing, but the analyst expects the base model to start at $699, which is the same price as last year's iPhone 11, only with a smaller screen. He also believes the Pro and Max Pro will remain “premium tier” phones, priced at $999 and $1,099, respectively. For the iPhone Max, AAPL will most likely price it at a modest premium to the base model, in the range of $799, in Caso’s opinion.All in all, the checks indicate build plans to support production of roughly 75 million units for the launch, including 64 million new models.Offering further explanation, Caso stated, “While we believe this is consistent with industry expectations, the mix assumptions driven by the initial build plans suggest a meaningful rise in blended ASPs. There's no guarantee that current build plans will; reflect what consumers will actually buy, but the build plans provide insight into Apple's expectations.”On top of this, Caso thinks that Apple will build more aggressively on higher priced stock keeping units (SKUs) to make sure they are available for holiday purchases, with lower priced SKUs expected to sell out before Christmas.As for mmWave, Caso argues “the mix is likely to be heavily weighted to U.S. sales, based on the assumption that Verizon will have mmWave on all models, and Verizon unit sales represent about 40% of the U.S. market.” He does, however, point out that he has confirmed mmWave will be supported on the Pro models, but “Verizon offering mmWave on the entry-level iPhone 12” is his “own assumption.”Everything that AAPL has going for it convinced Caso to keep his Outperform (i.e. Buy) rating as is. Along with the call, he lifted the price target from $110 to $120, suggesting 7% upside potential. (To watch Caso’s track record, click here)What does the rest of the Street have to say? 24 Buy ratings, 8 Holds and 3 Sells have been issued in the last three months. As a result, the consensus rating on AAPL is a Moderate Buy. In addition, the $122.04 average price target puts the upside potential at ~13%. (See Apple stock analysis on TipRanks)To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
(Bloomberg) -- Just a week after revealing its plan to turn itself into a clean-energy giant, BP Plc watched its share price drop to a 25-year low.Chief Executive Officer Bernard Looney and his new management team gave more than 10 hours of presentations over three days last week, in a bid to show the world that the oil and gas giant could adapt to a low-carbon future without sacrificing returns.BP’s stock closed in London on Thursday at 232.4 pence, the lowest level since October 1995. While falling crude prices and fears of the second wave of the coronavirus didn’t help, the slide suggests shareholders weren’t convinced by Looney’s pitch.“Investors remain skeptical,” said Mirza Baig, Global Head of Governance at Aviva Investors. “Particularly as this move is being forced on the company by climate change.”Looney took over as CEO in February, but the so-called “BP Week” this month was his big moment, designed to put flesh on the bones of a bold plan to become a “net-zero” energy company by 2050. It was also an opportunity to persuade shareholders to stick with BP after the company slashed its dividend by half in August.“What investors are looking for with companies, when they announce big strategic changes of direction of any sort, is compelling answers to three questions: The what, the why and the how?” said Nick Stansbury, a fund manager at Legal & General Group Plc.Maintaining ReturnsAt the heart of BP’s reinvention is a reduction in oil and gas production and simultaneous growth in its renewables business. Looney promised investors he could do this while delivering returns of 8% to 10%. That’s not as high as the double-digit returns oil developments can sometimes bring in, but greater than many clean-energy projects.Looney said BP’s experience, integration, low borrowing costs and trading prowess, but the market is likely to remain skeptical until such returns can be demonstrated in practice, analysts at Redburn wrote in a research note.“BP’s challenge lies in the building up of its skill set in renewable energy solutions and a competitive advantage in its chosen areas that allows investors to believe they can deliver attractive financial returns from the capital allocated,” said Aviva’s Baig, who strongly supported the company’s net-zero ambition. Getting BP into a position where it can deliver profits from large-scale renewable energy projects will require lots of upfront spending. The company made a $1.1 billion splash in offshore wind earlier this month, buying a stake in developments owned by fellow oil giant Equinor ASA.The near-term milestones laid out last week suggests that more deals will follow.“For BP to meet its low-carbon target of 50 gigawatts of renewable generation capacity by 2030, considerable growth is required over the coming years,” said Stuart Lamont, an investment manager at Brewin Dolphin Holdings Plc. “This will require discipline from the company, ensuring a delicate balance between working toward decarbonization targets while achieving attractive returns for shareholders.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Wall Street appears to be slowly warming to the stock. Thursday’s upgrade was from Wolfe Research analyst Hunter Keay. Keay’s price target edged higher to $147 from $146—a bit above where Boeing shares closed on Thursday.