The risk/reward trade-off at consumer goods giant Procter & Gamble Co (NYSE:PG) remains favourable, according to broker Jefferies.
Fiscal fourth quarter results showed strategic steps taking hold, according to the broker. The macro environment remains volatile and investment in the current fiscal year will put a crimp on earnings per share (EPS) growth, but the broker sees an opportunity for the shares to re-rate as organic sales growth returns to industry growth rates.
Nevertheless, the broker has trimmed its EPS for the current year by around 3%, reflecting higher spending planned for this year, but its forecast of US$3.90 is still at the high end of Procter & Gamble’s guidance range.
The company has a price target of US$98, more than 11 bucks above the current share price, and rates the shares a ‘buy’.
Second quarter results on Tuesday from IDEXX Laboratories Inc (NASDAQ:IDXX) delivered the strongest “beat” Canaccord Genuity analyst Mark Massaro can remember in years.
The numbers handily topped every metric the broker tracks, prompting Massaro to up the price target to US$110 from US$98, and reiterate his ‘buy’ recommendation.
Second quarter (Q2) revenues of US$467mln surpassed Wall Street forecasts of US$445mln, while the adjusted earnings per share of 74 cents were 13 cents ahead of the consensus forecast.
The company raised revenue guidance by US$25mln to US$1,755-US$1,775mln for 2016, from US$1,730-US$1,750; the consensus forecast before the update was for US$1,736mln.
“IDEXX delivered 467 SediVue (~3 min. automated urinalysis) instruments in Q2 (and has a similar number of orders in its backlog) and raised its 2016 outlook to 1,500 (from 1,000) for the full year. We're not surprised by this raise given our survey work, though encouraged given some vet push back on price,” Canaccord said.
Canadian broker Mackie Research has reiterated its ‘buy’ recommendation and 12-month price target of C$7 for Nobilis Health Corp (TSE:NHC) after the healthcare facilities owner topped estimates with its earnings announcement, released after the bell last night.
Earnings per share of six cents were triple the level the market had been expecting.
The company reiterated its organic guidance, and is no longer including future acquisitions in its guidance, which pleased Mackie muchly.
“Importantly, these results were filed well in advance of the deadline, which should eliminate any lingering concerns around financial reporting,” the broker said.
A bit of a rethink for mobile games developer Glu Mobile Inc (NASDAQ:GLUU) could pay off, reckons Wedbush Securities.
After seeing many of its recent releases under-perform earlier expectations, Glu has switched its focus to evergreen games, which the broker welcomed, though it said successful implementation of the new strategy is far from assured.
“Each of Glu's big games saw a sequential bookings decline in Q2, with ‘Kim Kardashian: Hollywood’ generating $7.8 million of bookings, down from $11.7 million in Q1; ‘Racing Rival’s down to $5.8 million from $6.9 million; and ‘Cooking Dash’ down slightly to $8.9 million from $9.0 million,” Wedbush observed.
“Although each of these games has enjoyed a degree of success, Glu is essentially doubling down on titles that would be afterthoughts for many of its peers. There is also the question of where bookings will be for the titles by the time that the new features roll out, assuming recent trends hold for the remainder of the year,” it cautioned, as it stuck with its neutral rating and lowered the price target to US$2.25 from US$2.45.