December 7, 2020 BARRON’S M11
Research Reports
HowAnalystsSizeUpCompanies
Thesereports,excerptedandeditedbyBarron’s,wereissuedrecentlybyinvestmentand
research firms. The reports are a sampling of analysts’ thinking; they should not be
consideredtheviewsorrecommendationsofBarron’s.Someofthereports’issuershave
provided, or hope to provide, investment-banking or other services to the companies
being analyzed.
To be considered for this section, material
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Toll Brothers•TOL-NYSE
Outperform•Price $47.56 on Nov. 30
by Wedbush
We reiterate our Outperform rating on Toll
Brothers ahead of the fourth-quarter
(October) earnings-per-share release that
is scheduled for after the market close on
Dec. 7. We are ahead of the Thomson con-
sensus estimates on orders and EPS, as we
anticipate that demand for larger, flexible
floor plans may be higher than consensus
assumptions.
On the call, we will look for commentary
around pricing power as well as the level of
demand/traffic prior to the normal holiday
slowdown. We will also be interested in
Toll’s plans for the spring season and an
update on Toll’s fiscal-year 2021 community
growth outlook, which currently stands at
10%. Price target: $57.
Zoom Video Communications
- ZM-Nasdaq
Buy•Price $478.36 on Dec. 1
by Needham
Zoom’s third-quarter print was strong,
with revenue up 367% year over year, 12%
ahead of consensus, and fiscal-2021 guid-
ance raised by 8%. We estimate that Zoom
added 2.5 million net new paying subscrip-
tions in the third quarter, following the
nearly doubling of subs in the second quar-
ter. Acknowledging that Zoom shares will
likely continue to be subject to volatility on
potential rotation away from work-from-
home names and/or concerns regarding
tough comps looming in the second quarter
of fiscal 2022 and beyond, we think that an
enduring shift toward remote work and
Zoom’s rapidly growing installed base into
which it can cross-sell phones, rooms, and
future products afford it the opportunity to
double revenue again in the next three to
four years.
Price target: $540.
Wells Fargo•WFC-NYSE
Sector Perform•Price $28.46 on Nov. 30
by RBC Capital Markets
At present prices, we believe that the
stock fully discounts the company’s regula-
tory and structural problems. As a result,
we are raising our rating to Sector Per-
form from Underperform. The company’s
stock is down 47% year to date, below the
KBW Nasdaq Bank Index’s performance of
minus 18%.
Management emphasized on the third-
quarter earnings call its ongoing commit-
ment to running the company more effec-
tively and efficiently. Additionally, the
company indicated that it would lay out its
restructuring plans on its fourth-quarter
earnings call in January....Over recent
years, Wells Fargo has sold selected busi-
nesses that were not core to its commercial
banking franchise, e.g., Wells Fargo Insur-
ance Services USA and its Institutional
Retirement Trust business. We anticipate,
as the new executive team looks to turn the
company around, that potential business
divestitures should not be ruled out, e.g.,
its asset-management business.
Price target: $31.
Kohl’s•KSS-NYSE
Buy•Price $36.52 on Dec. 1
by Guggenheim
Kohl’s announced a long-term strategic
partnership with Sephora to bring a new
elevated Beauty experience to Kohl’s, in-
cluding 200 Sephora at Kohl’s locations
open in fall 2021 (and 850-plus by 2023)
and the launch of Sephora on Kohls.com in
We believe that this fits into Kohl’s new
strategic framework outlined in October
2020, which highlighted Beauty as a key
opportunity. Importantly, we expect Sep-
hora to drive traffic and support top-line
growth while also being operating-margin
accretive, helping Kohl’s to deliver on its
7% to 8% operating margin target. We
raise our price target to $40 from $35.
Interactive Brokers Group
- IBKR-Nasdaq
Overweight•Price $53.98 on Dec. 1
by Piper Sandler
We are raising our fourth-quarter EPS esti-
mate due to stronger-than-anticipated trad-
ing, continued account growth, and strong
margin balance and customer equity growth.
Cleared daily average revenue trades for No-
vember were up 31% month over month to a
record, outperforming our forecast of +5.55.
The average commission of $2.45 per trade
was a slight offset, as it came in below our
previous fourth-quarter estimate of $2.49.
New accounts were 29,000, as customer eq-
uity was up 11% month over month, while
margin balances increased 4% month over
month. We are raising our fourth-quarter
EPS estimate to $0.56 from $0.54 as Interac-
tive Brokers generally outperformed our ex-
pectations for November. Price target: $60.
FLIR Systems•FLIR-Nasdaq
Buy•Price $40.02 on Dec. 3
by Canaccord Genuity
FLIR Systems announced the acquisition of
Altavian, a small military-drone manufac-
turer. FLIR...could now potentially be a
prime contractor selected for the Short
Range Reconnaissance effort, which is seek-
ing a drone for the Army capable of being
carried in a rucksack and carrying out
flights with a minimum duration of 30 min-
utes or three kilometers. Price target: $50.
INSIDER TRANSACTIONS RATIO
0
10
20
30
40
50
60
D J F M A M J J A S ON
Ratio of Insiders Sales to Buys. Readings under 12:1 are Bullish. Those over 20:1 are Bearish.
The total top20 sales and buys are 664, 296 ,458 and 17, 591 ,184 respectively; Source: Thomson Reuters
Bearish
Bullish
Ratio = 38
INSIDER TRANSACTIONS: Recent Filings
Purchases
$Val
Company/Symbol Insiders Shares (000's)EspeyMfgAndElectronicsESP 2 600,000 10,974
AmericanAssetsTrustAAT 1 50,089 1,452GenesisParkAcquisitionGNPKU 3 145,000 1,450
MaravaiLifesciencesMRVI 2 50,000 1,348MerrimackPharmaceuticalsMACK 2 138,175 504KeurigDrPepperKDP 1 7,500 227
FlotekIndustriesFTK 2 89,231 184
ReproMedSystemsKRMD 3 32,827 148CenturyBancorpCNBKA 3 1,688 131StateAutoFinancialSTFC 1 8,550 129PcbBancorpPCB 1 11,686 127AmarinAMRN 1 25,000 122
FreightcarAmericaRAIL 2 50,500 114ChiasmaCHMA 1 25,000 107ClearsideBiomedicalCLSD 1 53,900 105LuminexLMNX 1 4,487 101CentralValleyCommunityBancorpCVCY 2 7,001 100
EmployersEIG 1 3,200 98
MeridianBioscienceVIVO 1 5,000 88BankFirstBFC 1 1,200 81Sales
$ Val
Company/Symbol Insiders Shares (000's)SouthernCopperSCCO 1 1,293,245 73,415
CarvanaCVNA 3 290,000 68,307
PinterestPINS 1 945,000 59,002Procter&GamblePG 1 306,567 42,096Tiffany&CoTIF 7 306,878 40,384FacebookFB 2 137,618 38,001EnphaseEnergyENPH 4 259,418 36,579
TraneTechnologiesTT 2 248,115 35,937GreenDotGDOT 1 690,000 35,856BroadcomAVGO 1 78,125 30,484LaredoPetroleumLPI 1 2,558,505 29,668CelsiusCELH 2 918,108 28,903
PaloAltoNetworksPANW 2 92,000 27,081
MontroseEnvironmentalMEG 3 944,876 24,654SquareSQ 1 100,000 20,914ServicenowNOW 1 38,600 18,855
SlackTechnologiesWORK 5 415,000 16,527ZillowZ 4 117,134 12,752
CrisprTherapeuticsCRSP 1 100,000 12,500AxonEnterpriseAAXN 2 98,500 12,383Aninsiderisanyofficer,directororownerof10%ormoreofaclassofacompany'ssecurities.Inmostcases,aninsidermustreportanytradeto
theSECwithintwobusinessdays.ThetableshighlightcompaniesthatfiledwiththeSECthroughlastWednesday.Thetablesdonotinclude
pension-planoremployeestock-optionactivity,tradesbybeneficialownersof10%ormore,tradesunder$2pershareortradesunder100
shares.The"Purchases"columnincludesonlyopen-marketandprivatepurchases;the"Sales"columnincludesonlyopen-marketandprivatesales,
andexcludestradesprecededbyoptionexerciseinthe12monthspriortothereportedevent. Source:ThomsonReuters