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Credit Suisse Changes to U.S. Focus List: Sealed Air, Teradyne, VMware and More
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Credit Suisse is making some key changes to its U.S. Focus List on Monday. These are the firm’s top stocks to buy, followed by some names that are now considered as stocks to sell. Sealed Air Corp. (NYSE: SEE) and Teradyne Inc. (NYSE: TER) have been added. Credit Suisse has now removed shares of Activision Blizzard Inc. (NASDAQ: ATVI), Cytec Industries Inc. (NYSE: CYT) and VMware Inc. (NYSE: VMW). We have included a note on each, as well as the implied upside and commentary.
Sealed Air Corp. (NYSE: SEE) was added to the U.S. Focus List, and the price target is $31 for the stock. Following the management change from late 2012, the firm believes that Sealed Air will significantly improve its profitability and cash flows while also deleveraging its sizable debt load, with both of these things driving significant shareholder value.
Teradyne Inc. (NYSE: TER) was added to the U.S. Focus List as one of the most compelling names in the analyst’s coverage universe. What really stands out is that Credit Suisse has a $26 price target, versus the $17.94 share price today, implying upside of about 45%. The firm noted:
Our thesis on TER: (1) Levered to the third wave of computing. (2) Share gains in wireless and HDD test could add 15 cents to 2013 EPS. (3) Semiconductor test capex upside could add 20 cents to 2013 EPS. TER’s EPS could go to $1.50+ versus current street estimates at $1.37.
Activision Blizzard Inc. (NASDAQ: ATVI) was removed from the U.S. Focus List, as the IPC team just no longer considers it to be one of the firm’s top ideas, despite having a $20 upside price target.
Cytec Industries Inc. (NYSE: CYT) was removed from the U.S. focus list as no longer being a top idea. The firm still has a price target of $84, versus a $71.47 share price.
VMware Inc. (NYSE: VMW) was the last one removed from Credit Suisse’s U.S. Focus List. The de facto leader in virtualization was said to no longer be considered a top idea. We find this call interesting, considering that the Credit Suisse price target was left at $100, versus a $71.12 share price. That is still 40% in implied upside.
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