Research Analysts’ Upgrades for April, 22nd (AEM, AKAM, ATGE, BABA, BMI, CIT, FEYE, FTV, GPN, JOE)

Research Analysts’ upgrades for Monday, April 22nd:

Agnico Eagle Mines (NYSE:AEM) (TSE:AEM) was upgraded by analysts at Zacks Investment Research from a strong sell rating to a hold rating. According to Zacks, “Agnico Eagle maintains a solid exploration budget and is reinvesting in assets to expand output. the company is making progress with its key growth projects and expanding mine life across a number of properties. However, higher unit costs and declining production are weighing on the company’s margins. The company’s inability to generate positive free cash flows and stretched valuation are other concerns. The stock has underperformed the industry it belongs to in the past year.”

Akamai Technologies (NASDAQ:AKAM) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Akamai is riding on robust performance of cloud security business, growth in Media and Carrier Division, strong seasonal traffic, and operational efficiency. The company is benefiting from growing influence of its security solutions among media customers, in particular. Robust demand for Kona Site Defender and Prolexic Solutions, new Bot Manager Premier, and Nominum Services are key catalysts. Additionally, robust over-the top (OTT) content viewing, increasing adoption of mobile data/apps & growing mobile data traffic bode well. Notably, shares of the company have outperformed the industry in the past year. The company has positive record of earnings surprises in recent quarters. Estimates have been stable lately ahead of the company’s Q1 earnings release. However, unfavorable foreign exchange and seasonal summer traffic are major concerns. Further, increasing bandwidth costs are a headwind.”

Adtalem Global Education (NYSE:ATGE) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Shares of Adtalem have witnessed a sharp decline in a year’s time. The company has been witnessing tepid enrolment growth at its institutions, as improving employment situation is hampering the growth prospects of for-profit education companies. Additionally, it has been experiencing restructuring charges related to closing of the Ross University School of Medicine campus in Dominica and real estate consolidations. Nonetheless, Adtalem has been undertaking initiatives for achieving strong multi-year organic growth. Its cost-saving initiatives, transformation strategy and continued focus on stackable programs that are aligned with key growth areas should drive growth. Earnings estimates for the current quarter and fiscal year have remained stable over the past 60 days.”

Alibaba Group (NYSE:BABA) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Alibaba’s strong momentum in both domestic as well as international market remains growth drivers. Moreover, the company’s New Retail strategy is aiding growth in its Tmall Import, Hema fresh food grocery business and Intime Department Stores. Further, Alibaba’s strengthening cloud business with its expanding customer base continues to drive its performance. Notably, the stock has outperformed the industry it belongs to over a year. However, contracted consumer spending and an uncertain economy is likely to impact its top-line growth. Also, rising competition from domestic as well as foreign e-commerce companies poses risk. Additionally, the company’s increasing investments and macro headwinds in China are major concerns. “

Badger Meter (NYSE:BMI) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Badger Meter reported healthy first-quarter 2019 results with year-over-year increase in earnings led by strong growth dynamics. Management remains optimistic about the company’s prospects supported by a number of reasons like solid backlog and customer acceptance of its new products. The company is well poised to benefit from strong order rates for innovative water solutions, including E-Series Ultrasonic meters and ORION Cellular LTE-M radios. It aims to enhance shareholder value through organic and inorganic investments. The stock has outperformed the industry over the past year on average. However, higher brass input cost is likely to hurt profitability and impair its long-term growth potential to some extent. Margin woes have remained a perennial concern for the company. Its net margin (TTM) has decreased at a CAGR of 8.1% from 2009 to 2018. The company also has a debt-laden balance sheet which restricts its financial flexibility.”

CIT Group (NYSE:CIT) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Shares of CIT Group have outperformed the industry over the past six months. The company has a decent earnings surprise history having surpassed the Zacks Consensus Estimate for earnings in two of the trailing four quarters. The company’s business streamlining initiatives, improving economy, and rise in demand for financing of inventories and capital equipment will continue to support profitability. Moreover, its efficient capital deployment activities reflect a strong balance sheet position. However, mounting operating expenses are likely to hurt bottom-line growth to some extent. Also, worsening credit quality remains a major near-term concern for the company as it might hamper financials. Further, earnings estimates have been going down lately ahead of the company's first-quarter 2019 results.”

FireEye (NASDAQ:FEYE) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $17.00 target price on the stock. According to Zacks, “FireEye is benefiting from the shift in its business model to a subscription-based one. Expanding customer accounts is driving revenue growth. Strong adoption of Helix platform is a key driver. The company expects continued growth across network, email and endpoint security. Moreover, the launch of Expertise On-Demand is likely to provide a significant monetization stream. However, shorter-length contracts remain a concern, which, despite generating higher margins compared with three-year contracts, adversely impact near-term top-line growth. Moreover, growing competition is an overhang. Shares have underperformed the industry in the past year. The company has mixed record of earnings surprises in the recent quarters.”

Fortive (NYSE:FTV) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $99.00 target price on the stock. According to Zacks, “Fortive's strong product pipelines and increasing buyouts should continue to improve its market share. Further, well-performing Gilbarco Veeder-Root and Jacobs Vehicle Systems remain positive for its position in North America and China. Estimates have been stable lately ahead of the company’s Q1 earnings release. The company has mixed record of earnings surprises in recent quarters. Notably, shares of Fortive have outperformed the industry it belongs to over a year. However, fluctuations in foreign exchange rates pose a serious risk. Further, higher expenses and integration issues remain major concerns. Moreover, end market cyclicality poses a serious threat to the company’s top-line growth.”

Global Payments (NYSE:GPN) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Global Payments’ shares have outperformed its industry in a year's time. Its strategic investments in future growth projects and successful refinancing of credit facilities bode well. Consistent top-line growth and accretive acquisitions are impressive. Investment in technology has enabled it to stay ahead of the rapidly changing payments industry. Its solid 2019 guidance also impresses. The company’s operating cash flows have been increasing for the past many years. Nevertheless, the company suffers from a rising debt level. Moreover, its earnings are also expected to face currency volatility, owing to its worldwide presence. A low return on equity makes the stock unattractive.”

St. Joe (NYSE:JOE) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. Zacks Investment Research currently has $20.00 target price on the stock. According to Zacks, “Shares of St. Joe have outperformed its industry, over the past six months. Notably, the company is making strategic moves to enhance its portfolio of income-producing properties and focus on recurring operating-income opportunities. This will likely create long-term value for its shareholders. Further, the company’s emphasis on cost discipline is likely to support its bottom-line performance. Additionally, non-strategic asset sale will provide the company with substantial liquidity, which can be deployed for developmental needs. Nonetheless, inconsistent revenue performance in a number of segments and regional business concentration are its concerns.”

CarMax (NYSE:KMX) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $86.00 price target on the stock. According to Zacks, “CarMax’s fiscal 2020 earnings estimates have been moving up of late. In the fourth quarter of fiscal 2019, the company’s revenues missed the Zacks Consensus Estimate while earnings surpassed the same. Compared with the year-ago quarter, the figures witnessed an annual increase. Strong market presence through stores and robust demand for used vehicles are the major drivers of year-over-year growth. Apart from store openings in new and existing markets, it is expanding presence through digital platforms. Also, strong balance sheet aids CarMax in rewarding shareholders through share buybacks and investment in technology. However, an ample supply of off-lease used vehicles, resulting in lowered prices, along with rise in SG&A expenses, is a concern.”

Madison Square Garden (NYSE:MSG) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $345.00 target price on the stock. According to Zacks, “Shares of Madison Square have outperformed the industry in the past year. The last reported quarter marked Madison Square’s second straight quarter of earnings and revenue beat. Results benefited from robust performance of both the Entertainment and Sports segments. Apart from its strong brand presence, the company’s entertainment business continues to grow on innovative venues and overall positive scenario in the concert market, which is commendable. Also, Madison Square is consistently benefiting from its ongoing efforts to reinstate growth through multi-night and multi-marketing agents. Moreover, continual partnerships to expand its footprint bode well. Estimates have also been revised upward over the past two months. However, intense competition in the sports business remains a concern.”

Maxim Integrated Products (NASDAQ:MXIM) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Maxim’s solid momentum across the automotive market remains a major positive. Further, the company remains optimistic about its flexible manufacturing strategy which is expected to aid margin expansion. We believe Maxim’s diversified product portfolio will provide flexibility and stability to the business. Estimates have been stable lately ahead of the company’s Q3 earnings release. The company has mixed record of earnings surprises in recent quarters. However, Maxim's high dependence on Samsung is a risk to its growth trajectory. Also, the company is suffering from sluggish bookings and weakening momentum across its customers. These are affecting the company’s position in the industrial market. Notably, the stock has underperformed the industry it belongs to over a year.”

NVR (NYSE:NVR) was upgraded by analysts at Zacks Investment Research from a hold rating to a strong-buy rating. They currently have $3,547.00 price target on the stock. According to Zacks, “Shares of NVR have outperformed its industry year to date. Earnings estimates for 2019 have increased over the past seven days. While concerns surrounding affordability and rising mortgage rates have been plaguing the industry of late, NVR managed to generate higher revenues from the homebuilding business in 2018. Homebuilding revenues increased 13% to $7 billion in 2018. New orders and settlements during the year increased 4% and 16% from the year-ago level to 18,281 units and 18,447 units, respectively. NVR’s disciplined business model, and focus on maximizing liquidity and minimizing risks are likely to generate more returns for its shareholders. However, rising interest and mortgage rates, as well as expected slower economic growth rates are causes of concern. Rising land and labor costs are threatening margins as they limit homebuilders’ pricing power. In fact, gross profit margin contracted 50 bps in 2018.”

Palo Alto Networks (NYSE:PANW) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $264.00 price target on the stock. According to Zacks, “Palo Alto is benefiting from healthy demand environment, product launches and increasing adoption of its next-generation security platforms. Also, customer wins coupled with expansion of the existing customer base are other positives.  We believe that the company’s acquisitions synergies will also boost revenues, going forward. Further, the strategic partnerships with the likes of VMware, Splunk and Citrix, bode well. Shares have outperformed the industry year to date. Nonetheless, a volatile spending environment and competition from peers are concerns. Near-term prospects for Palo Alto are not promising as customer changing behavior recently hit several other players in this space. The company’s heavy investment to boost sales and marketing capabilities, particularly by increasing sales force, is an overhang on margins.”

PrairieSky Royalty (TSE:PSK) was upgraded by analysts at Eight Capital from a sell rating to a neutral rating. Eight Capital currently has C$19.15 target price on the stock, up from their previous target price of C$17.50.

Stanley Black & Decker (NYSE:SWK) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “In the past three months, Stanley Black & Decker's shares have outperformed the industry. It stands to gain from organic and inorganic initiatives in the long run. It acquired 20% stake in MTD Products in January 2019 while is due to acquire IES Attachments in the first half of the year. For 2019, exposure in emerging markets, favorable e-commerce trend, cost-saving actions and growing demand for popular brands will be boons. Organic sales are predicted to grow 4% and adjusted earnings will likely increase 4-6% year over year to $8.45-$8.65 per share. However, the company estimates tax rate of 17.5% to lower earnings by 15 cents per share while it believes tariffs, foreign currency woes and commodity inflation to hurt earnings by 90 cents to $1.00. Over the past three months, the company’s shares look overvalued compared with the industry. Also, earnings estimates have declined for 2019 and 2020 in the past 60 days.”

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