Small cap price-to-earnings (P/E) ratios, despite hitting the highest levels since early 2022 in December, remain historically cheap, analysts at Bank of America have highlighted.
Small cap stocks are trading 3% below their long-term average P/E compared with 27% above for large caps and 13% above for mid-caps, according to analysts.
DoorDash Inc (NYSE:DASH) has overtaken Uber Technologies Inc (NYSE:UBER) as Jefferies' top pick in the food delivery sector, with analysts at the brokerage estimating it will double underlying earnings (EBITDA) in the next two years to $2.5 billion.
They have upgraded the stock to ‘Buy’ from ‘Hold’ and raised their price target to $130 from $90.
Nvidia Corporation (NASDAQ:NVDA)'s generative artificial intelligence (genAI) dominance can potentially help generate about $100 billion of incremental free cash flow (FCF) over the next two years, according to Bank of America analysts.
In an update to clients, the analysts noted NVIDIA’s FCF provides ammunition for new organic and inorganic growth initiatives to potentially acquire software assets to build up the company’s recurring revenue profile.
Keywords Studios PLC (AIM:KWS, OTC:KYYWF)’s active M&A strategy has put the video game services company in a good position to offset organic growth pressures prevalent in the video game landscape.
The acquisition of the Multiplayer Group is a significant factor in this outlook, contributing a 5.5% increase to 2024 revenue forecasts and a 7% rise in adjusted operating profit.
Melrose has received a bullish annual result preview from analysts at JP Morgan, sending the share price up by almost 5%.
Over twelve months, the shares are up almost 90% but the US bank expects good news to keep coming for the aircraft parts maker and has labelled Melrose a top pick for 2024.
Emmerson PLC (AIM:EML)’s focus for the remainder of 2024 will be to obtain the environmental project for the Khemisset project in Morocco, putting in place a new agreement with its strategic investors and finalising optimisation work ahead of a bankable study, says house broker Liberum.
Hopes that the environmental permit would be in place by now were dashed by the devasting earthquake Morocco suffered in September, with the ensuing delays meaning the strategic financing arrangement currently in place will lapse, says the broker.
HSBC Holdings PLC (LSE:HSBA) can offer investors some pleasant surprises in 2024, according to US bank Jefferies, which forecasts buybacks, special and ordinary dividends will amount to 35% of the current market cap by 2025.
Sales of both the Canadian and French businesses have given the bank a clean slate for the current year, with a special dividend of US$0.21 per share expected in the first half of this year.
This Monday brought positive trading updates from two prominent London-listed market-making mid caps: CMC Markets PLC (LSE:CMCX) and Plus500 Ltd (LSE:PLUS).
Relative newcomer Plus500 soared ahead of market forecasts, posting US$725 million in revenues and US$340 million in underlying earnings (£570.5 million/£267.5 million), outstripping forecasts by 12% and 13% respectively.
Celsius Resources Ltd (ASX:CLA, AIM:CLA)’s application for a mining feasibility declaration for its Sagay Project in the Philippines is a significant achievement for the mining junior, says house broker WH Ireland.
In the northeastern part of Negros Island, Sagay is host to a mineral resource containing an estimated 1.2 million tonnes of copper and 1 million ounces of gold.
Disruption faced by European retailers from ships being forced away from the Red Sea should be manageable in the near term, according to Royal Bank of Canada (TSX:RY) analysts.
“Although we do expect to see longer transit times, cost increases should be manageable in the context of an overall favourable buying environment in Asia,” the bank said in a note.
Mobileye Global Inc's ‘Buy’ recommendation from UBS remained intact although its price target was lowered after the self-driving technology developer guided investors for a sharp fall in first-quarter revenue as its customers cope with excess inventory.
Due to the lower outlook, UBS analysts have cut their price target to $35 from $48, saying while the destocking will weigh on the company’s 2024 performance there remains mid-term opportunity from its Supervision driver-assist system.
Barclays has become the latest broker to set a price target for Rolls-Royce Holdings PLC north of 400p.
It thinks the potential reinstatement of an investment grade rating and subsequent resumption of the dividend will be key catalysts.