Calls of the day: 17th July 2024
[.custom-color]UnitedHealth[.custom-color] was upgraded to Buy by Jefferies with a $647 price target, a 13% increase over its current value. This follows UnitedHealth's earnings report on Tuesday which showed it had managed to beat earnings expectations despite pressures on their medical loss ratios (MLR). Jefferies thinks that although the short-term MLR outlook may remain unclear, they are "clear enough" in Q1 and Q2 to focus on a positive outlook for 2025. This includes strong Medicare Advantage (MA) growth with better margins. Additionally, Jefferies has a positive view on the company's strategic initiatives and market position. UnitedHealth continues to expand its operations and invest in new ventures, such as navigating and adapting to regulatory challenges, which are expected to enhance its market standing and profitability in the long term.
[.custom-color]MaxLinear[.custom-color] was upgraded to Buy by Craig-Hallum with a price target of $38, representing a 50% upside. Analyst Richard Shannon described this as "not a quarter call," indicating a longer-term play. The upgrade to Buy from Hold is based on a 2-3 year outlook, driven by product cycle and inventory cycle dynamics, and supported by management comments from the past year. While acknowledging SIMO-related risks, Shannon believes the longer-term potential outweighs these risks. *SIMO refers to Silicon Motion, which has been involved in a significant legal and financial dispute with MaxLinear related to a proposed merger.
[.custom-color]Axon[.custom-color] was given a Buy rating by Bank of America with a price target of $380, representing a 20% upside. The company, known for developing and manufacturing law enforcement technologies including body cameras, tasers, and digital evidence management systems, was called the "Apple of safety" by Bank of America for its mix of hardware and integrated software. The firm highlighted Axon's "commanding lead" in capturing increased spending on public security and the digitization of policing.
[.custom-color]Rezolute[.custom-color] was given a Buy rating by BTIG with a $13 price target, representing a substantial 180% upside. The firm noted an "attractive disconnect" between the company's three promising pharmaceutical trials and the current trading price of its shares.
[.custom-color]Sweetgreen[.custom-color] was given a Buy rating by UBS with a price target of $31, indicating a 23% upside. The firm, which operates 255 casual restaurants focusing on healthy, plant-based meals, is experiencing rapid growth. UBS predicts a 15% revenue growth over the next three years and EBITA margins greater than 6% by 2026.
[.custom-color-downgrade]Five Below[.custom-color-downgrade], the US chain of discount stores, was downgraded by a total of 7 analysts after it changed it CEO and reduced its Q2 outlook.