After a strong showing by markets in July, August is off to a slow start, and it begs the question of where investors can put money to grow the fastest. One major brokerage house has found a few names that offer solid upside despite current market headwinds.
Credit Suisse has issued a few calls across multiple industries where it sees significant upside. Considering the current inflationary climate, finding upside is key to keeping pace with the recovery from the market lows this summer.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
AmerisourceBergen
Credit Suisse reiterated an Outperform rating on AmerisourceBergen Corp. (NYSE: ABC) but cut the $180 price target to $175, which implies upside of 26% from the most recent closing price of $139.00.
A.J. Rice was the lead analyst on this call, and in the report he highlighted that the company saw sales growth outperformance in the U.S. Healthcare segment that was driven in part by a mail order customer who had a contract, which increased market share and drove the company’s mail order volume. That said, mail order margins are lower than average, but the strength does drive profit dollars and cash flow, Rice added. Regarding
Paxlovid, the company indicated the benefit of this relatively new therapy was not fully seen in the quarter but increasing access and utilization would be positive.
The stock has a 52-week trading range of $113.68 to $167.19, and it traded near $139 a share on Friday. The stock is actually up nearly 5% year to date.
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Booking
Though Credit Suisse reiterated an Outperform rating on Booking Holdings Inc. (NASDAQ: BKNG), it cut the $2,985 per share price target to $2,650. That implies upside of 35% from the most recent closing price of $1,966.48.
Stephen Ju was the lead analyst on the call, and he noted that Booking showed the first full quarter of growth over 2019 since the beginning of the pandemic. Nonetheless, his longer-term estimates step down as Ju factors foreign exchange headwinds and assumes growth from the lowered 2023 base.
The stock traded at around $1,936 early on Friday, in a 52-week range of $1,669.34 to $2,715.66. Shares are down roughly 19% year to date.
Ceridian
On Ceridian HCM Holding Inc. (NYSE: CDAY), Credit Suisse reiterated an Outperform rating and raised the price target to $75 from $70. The implied upside from the most recent closing price of $58.78 is 28%.
Kevin McVeigh, lead analyst on the call, expects Ceridian to build on recent momentum following an “impressive” second-quarter revenue and EBITDA beat driven by ongoing strong customer demand, revenue per customer. The stock offers investors an underappreciated payments opportunity, upmarket strength given its differentiated product offering and unique international M&A playbook, McVeigh concludes.
The stock traded at around $66 on Friday, in a 52-week range of $43.23 to $130.37. Shares are down 38% year to date.
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