Investing
8 Earnings Winners Seeing Major Analyst Upgrades for Even More Upside Ahead
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The last week of July is also the week that marks the peak of the earnings season. Many companies are managing to exceed earnings and revenue expectations, and some companies are thriving as beneficiaries of the new economy under the COVID-19 pandemic. One investing trend that never seems to end is that investors and traders alike love chasing the companies that are beating earnings expectations.
24/7 Wall St. tracks dozens of analyst calls each day of the week, and many companies saw their shares surge on July 30 after earnings along with multiple price target hikes or analyst upgrades. After reviewing the base of the top analyst calls for the day, we found eight stocks that received more than five different analyst price target hikes, which were also driving the underlying shares much higher after the earnings reports. Others saw many target hikes as well, but their shares were seeing profit taking.
It is always important to consider that no single analyst call should ever be a reason to buy or sell a stock. That said, what happens when almost every analyst out there is gearing up for stronger expectations ahead?
Here are eight stocks surging on earnings and seeing the bulk of the analysts who follow the companies issuing much higher price targets ahead.
Avantor Inc. (NYSE: AVTR) sells chemicals and materials to biohealth and other industries, and it surged after confirming a 35% earnings increase, despite a drop of about 3.5% in revenues. After a 10% gain to $21.70 on Thursday, the stock was valued at $12.5 billion, and it hit a new high of $22.24 a share. Multiple target price hikes were seen:
- Cowen to $28 from $22
- JPMorgan to $25 from $18
- Guggenheim to $24 from $21
- Jefferies to $25 from $23
- Raymond James to $23 from $17
- Stifel raised to $21.50 from $18
Cognizant Technology Solutions Corp. (NASDAQ: CTSH) closed up 3.4% at $64.79 ahead of earnings, but it was up another 6% at $68.75 in Thursday’s afternoon trading session. It still has not challenged its prior 52-week high of $71.48, and it had a $61.77 consensus target price that will also be moving higher as the new targets are factored in.
Wedbush Securities reiterated Cognizant as Outperform with a $75 target price. Needham upgraded it to Hold from Underperform, and RBC Capital Markets reiterated its Outperform rating and raised its target to $75 from $68. JPMorgan upgraded Cognizant to Neutral from Underweight and raised its target price to $69 from $62. These were the other Cognizant target hikes:
- Cowen to $70 from $62
- RBC to $75 from $68
- BMO Capital Markets to $77 from $70
- Citigroup to $78 from $66
- Deutsche Bank to $68 from $60
- Susquehanna to $70 from $55
Equinix Inc. (NASDAQ: EQIX) keeps riding the growth of the cloud, and its shares hit a new high of $787.70 after the data center provider beat expectations on revenues and on its funds from operations that track the earnings equivalent for a real estate investment trust. Its consensus price target had been $758.45, but many price targets were hiked after its earnings report:
- BMO to $825 from $755
- Citigroup to $883 from $754
- Cowen to $841 from $740
- Credit Suisse to $782 from $704
- JPMorgan to $861 from $725
- Stifel to $875 from $795
- SunTrust Robinson Humphrey to $820 from $750
Hologic Inc. (NASDAQ: HOLX) was last seen up over 7% at $68.92, and the medical device and medical technology company earlier hit a new all-time high of $70.15. Hologic now has an $18 billion market cap, after beating earnings expectations and showing rising margins, as the diagnostics operations have been strong amid the COVID-19 pandemic. Hologic had a $62.62 consensus target price that will be rising after seeing these target price hikes:
- BTIG to $84 from $63
- Citigroup to $85 from $63
- Cowen to $78 from $64
- Jefferies to $80 from $64
- JPMorgan to $75 from $55
- Needham to $78 from $64
- Raymond James to $78 from $68
Lam Research Corp. (NASDAQ: LRCX) closed at $360.83 (after a 3.4% gain) ahead of earnings and was last seen up almost 4% at $374.35, after hitting a new high of $381.48 earlier in the day. Its pre-earnings consensus target price was $334.68, but these price target hikes will be raising that figure in the coming days:
- Citigroup to $389 from $313
- Cowen to $450 from $375
- Credit Suisse to $450 from $370
- Deutsche Bank to $400 from $350
- Evercore ISI to $440 from $400
- JPMorgan to $395 from $310
- Needham to $400 from $325
- RBC Capital Markets to $400 from $300
PayPal Holdings Inc. (NASDAQ: PYPL) saw its shares rise almost 5% to $193.45 on Thursday, and the stock hit a new all-time high of $198.64, based on its earnings euphoria. Its prior consensus target price already had risen to $185, but the analyst community sees much more upside ahead as PayPal continues to dominate in the COVID-19 payment landscape. More than a dozen price targets were seen in total, and here were the hikes from the larger brokerage firms:
- BMO Capital Markets to $202 from $154
- Canaccord Genuity to $218 from $190
- Citigroup to $218 from $186
- Cowen to $234 from $195
- Credit Suisse to $205 from $185
- Deutsche Bank to $234 from $183
- Jefferies to $230 from $210
- JPMorgan to $200 from $160
- RBC Capital Markets to $212 from $192
- SunTrust Robinson Humphrey to $215 from $140
- Wedbush Securities to $220 from $200
Qualcomm Inc. (NASDAQ: QCOM) closed up 1.7% at $93.03 on Wednesday before earnings, but it was last seen trading up over 14% at $106.20 after beating earnings and signing a pact with Huawei, and after outlining developing markets are picking up faster than emerging markets. Qualcomm had a consensus target price of almost $95 going into earnings, but these target hikes are going to increase that consensus:
- Canaccord Genuity to $137 from $115
- Cowen to $130 from $115
- Deutsche Bank to $115 from $100
- JPMorgan to $120 from $108
- Piper Sandler to $110 from $80
- Raymond James to $120 from $110
- RBC Capital Markets to $106 from $81
- Susquehanna to $125 from $110
Teladoc Health Inc. (NYSE: TDOC) has continued to surge as telehealth during the pandemic is replacing traditional doctor visits. Teladoc was up almost 6% at $231.19 on Thursday and still under its recent all-time high of $237.76. More than 10 analyst target price hikes were seen, and its prior consensus target price of $189.80 will be headed higher. Target price hikes from Thursday:
- Canaccord Genuity to $255 from $195
- Cantor Fitzgerald to $210 from $165
- Cowen to $250 from $197
- Credit Suisse to $225 from $165
- Deutsche Bank to $238 from $184
- Jefferies to $205 from $167
- JPMorgan to $266 from $240
- Piper Sandler to $232 from $220
- RBC Capital Markets to $235 from $200
- Stifel to $205 from $144
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