The Top 5 Analyst & Research Calls of the Week (AAPL, BBY, ITMN, LULU, VECO)

This last week had many headline news events and we saw many key moves from news and from research.  We already track many of the key daily analyst upgrades, downgrades, and initiations each morning.  Some calls stand out far more than others in key names for investors and traders alike and we wanted to review five to the top and most influential and impact analyst calls that we saw during the last week.

The big research calls that comprised the top five for the week were seen in Apple Inc. (NASDAQ: AAPL), Best Buy Co. Inc. (NYSE: BBY), InterMune Inc. (NASDAQ: ITMN), Lululemon Athletica Inc. (NASDAQ: LULU), and in Veeco Instruments Inc. (NASDAQ: VECO).  Keep in mind that we do not only look at the bullish calls nor just the bearish calls.  We look for key standout research that either had extreme influence, signals a major directional change, or which has the broadest implications for key stocks.  We also provided color on each, share price implications, and a link to more detailed data if available.

Apple Inc. (NASDAQ: AAPL) had only a so-so week as bulls and bears fought it out.  In our own call of “How Apple Will Pass Exxon as the Most Valuable Company in America” we highlighted two research calls that are far above average targets.  Shares fought around the $321 mark this week, but Goldman Sachs came out with a $430.00 price target after Morgan Stanley removed Apple from its “Best Idea List” but still maintained an Outperform rating.  The average analyst target is still only about $370.00, so the $430 target is far more influential and stands out much more from the pack.  The implied upside now based on Friday’s close to Goldman’s $430 target: about 34%.

Best Buy Co. Inc. (NYSE: BBY) had an awful week after a poor earnings and poor guidance report that seemed to almost come out of the blue.  A bunch of analysts either downgraded the stock or lowered estimates and targets.  In one day the stock fell from $41.70 to $35.52, then the stock closed on the lows at $34.27 for the week.  There was one brave firm called Standpoint Research which took the contrarian stance after the news created the price drop.  For new buyers, Standpoint said the negative sentiment has brought low multiples and created a buying opportunity.  The firm even noted that investors will have to pay up higher if they wait for the good sentiment to return.  The rating was raised to Buy with a $42.00 target.  A gutsy call in the face of everyone else throwing in the towel.  Best Buy’s 52-week trading range is $30.90 to $48.83.

InterMune Inc. (NASDAQ: ITMN) saw a massive gain on Friday and the news felt as though it was a news development from out of nowhere.  The EMA in Europe recommended approval of its Esbriet (pirfenidone) for Idiopathic Pulmonary Fibrosis. The shares rose over 100%, up 144.5% to $34.89 on more than 34 million shares.  After the news, Wedbush raised the stock to an Outperform rating based upon renewed growth.  More importantly, Wedbush raised its $16 target up to $55.  If you include the extended patent protection, Wedbush said a less conservative target could reach $76.  Canaccord Genuity also raised the rating to Buy but gave ‘only’ a $38 target.  It is the Wedbush call that stands out the most with a call that could imply another doubling of the stock yet again and that is how we noted the “ten-bagger from the bottom” stance as a possibility.  Keep in mind that even at $34.89, its market cap is $1.95 billion and its 52-week trading range is $8.34 to $49.46.

Lululemon Athletica Inc. (NASDAQ: LULU) had yet another solid week on top of the prior week’s major rally; no downward dog for this yoga-themed player. On December 15, Credit Suisse came out an initiated coverage with an Outperform rating and set an $85.00 price target.  While that might not sound like much upside from Friday’s close of $73.29, the share price close that marked the analyst price entry was $67.80 from the close before the research call.  The range of the last year has been $25.75 to $73.85.  Lululemon has defied its critics and the shares have rallied despite ultra-premium valuations.  Many will argue that this new coverage is a late call and a come-along call based on sentiment.  Whether that is true will be seen in time.  This was still a top standout call in a momentum stock.  Credit Suisse’s call gave an implied upside of 25%.

Veeco Instruments Inc. (NASDAQ: VECO) felt the wrath of an analyst downgrade this last week, yet the news was never truly confirmed nor truly refuted.  Citigroup downgraded Veeco’s rating to Hold from Buy with a new target of $50.00 on concerns over possible subsidies ending in China that have allowed LED companies to sell more to Chinese producers.  Shares had hit a high of $50.95 the morning before the downgrade and then shares had a high of $48.16 before the damage hit.  The $49.97 close on the day before went down to $42.19 on almost triple-average volume of more than 9.5 million shares.  Shares also closed out the week lower at $40.51, although Thursday looked to be the bottom at least from this news as a low of $39.54 was seen and it closed at $40.08 on Thursday.  From peak to trough this last week was a 22.3% drop, and the drop just on the day of the research call was 15.5%.  Veeco probably wished that call hadn’t come, but this was one of the most influential analyst calls of the week by far even if it caused a big price drop.  Veeco’s 52-week trading range is $29.21 to $54.50.

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JON C. OGG