Barron's - USA (2021-02-08)

February 8, 2021 BARRON’S M11

Research Reports

HowAnalystsSizeUpCompanies

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Winnebago Industries•WGO-NYSE

Outperform•Price $68.23 on Feb. 4

by Wedbush Securities

We hosted a virtual road show and investor

call with Winnebago CEO Mike Happe, Chief

Financial Officer Bryan Hughes, and head of

investor relations Steve Stuber. Management

reiterated the positive commentary coming

out of the company’s first-quarter earnings

call, including a continuation of red-hot

trends across the business. Winnebago and

other recreational vehicle manufacturers will

be playing catch-up for quite some time [to

meet demand]. While fiscal-2021 upside is

limited, due to product availability con-

straints, this gives us even greater confi-

dence that our well-above-consensus esti-

mates are within reach.

The RV industry continued to run in the

20% to 30% growth range through November

(the most recently available data), and man-

agement has not seen a meaningful slow-

down. In the absence of an economic, politi-

cal, or pandemic-related collapse, manage-

ment doesn’t anticipate a near-term break-

down of this trend. Beyond 2021, manage-

ment continues to be quite optimistic, given

secular and demographic trends that were

favorable prior to the pandemic and have

been supercharged over the past 11 months.

Industry estimates suggest that the mix of

new customers approached 50% of total sales

in 2020, versus 20% to 25% in a normal year.

Management sees this as just the first wave

of new buyers. And many existing RV own-

ers were limited last year in their ability to

replace/upgrade their units. This also creates

incremental demand. We are raising our 12-

month price target to $77, from $70.

Corning•GLW-NYSE

Buy•Price $35.23 on Jan. 27

by Bank of America Securities

Corning reported fiscal fourth-quarter reve-

nue and earnings of $3.3 billion and 52 cents

a share, above the consensus estimates of

$3.17 billion and 48 cents. Our Buy rating is

based on glass supply and demand remaining

in balance, and glass price declines remaining

moderate (post Covid-19). Corning has a

strong capital-return program. Increased

adoption of Gorilla Glass in other end mar-

kets (automobiles), growth of fiber-to-the-

home, and [vehicle] gas-particulate filters

should be catalysts. Corning continues to

have a more-than 50% share of the LCD

glass market and has a competitive cost

structure. Our price target moves from $40 a

share to $44, based on 23 times estimated

calendar-2022 earnings per share of $1.95.

PPG•PPG-NYSE

Buy•Price $131.91 on Feb. 4

by Fermium Research

This morning, PPG reached yet another

definitive agreement to acquire the Finnish

paint companyTikkurila[ticker: TIK1V.Fin-

land] for 34 euros [$40.72] a share, an 8.8%

premium to the recent bid by Dutch rival

Akzo Nobel[AKZA], and a 36% increase

from PPG’s initial offer. To help justify this

additional premium, PPG declared that it had

uncovered additional synergies during the

course of its due diligence. We can readily

understand if investors’ initial view is one of

surprise, given PPG’s history of discipline,

though with the plethora of bidders, perhaps

Tikkurila is really worth it. Tikkurila an-

nounced today that its 2020 sales had reached

€582 million, up 3%, year over year, and just

shy of consensus €586 million expectations.

PPG already had to increase its initial bid

after facing a competitive offer from Hempel.

It was a simple decision for Tikkurila’s board

to accept this offer, as a transaction with PPG

is less complex than one with Akzo, which

would require divestitures.

In exchange for the latest offer, PPG re-

ceives an increase in a potential breakup fee

from Tikkurila, as well as an acceleration in

the timeline to close, with March in the pic-

ture or at the beginning of the second quar-

ter, to allow PPG to reap the benefit from the

second-quarter/third-quarter coatings season.

Price target: $158, 20 times our 2022 EPS

estimate.

Emerson Electric•EMR-NYSE

Overweight•Price $83.68 on Feb. 3

by J.P. Morgan

Emerson Electric’s fiscal first-quarter print

materially beat expectations; it was the best

all-around result so far this season, includ-

ing guidance that was raised by more than

the beat. We are raising our price target to

$95 (versus $85 on Dec. 21), and that’s con-

servative. In addition, restructuring savings

are reading through. The bottom line is that

the quest for $4 in annual EPS, which

started as far back as 2012, is coming

squarely into view.

CDK Global•CDK-Nasdaq

Outperform•Price $52.21 on Feb. 4

by Barrington Research

CDK [which provides software for auto,

truck, agricultural-equipment, power-boat,

and other dealers] reports fiscal second-

quarter results on Monday, Feb. 8, after the

market close. Our estimates, which include

the impact from the pending sale of CDK’s

international business unit, are for revenue

of $410 million, adjusted earnings of 61

cents a share, and adjusted Ebitda of $154

million. We view the divestiture as very pos-

itive for shareholder value, as it focuses the

company on its higher-return North Ameri-

can operations. Our price target on Emer-

son stock is $72.

INSIDER TRANSACTIONS RATIO

0

10

20

30

40

50

60

F M A M J J A S O N D J

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 273, 080 ,593 and 26, 544 ,902 respectively; Source: Thomson Reuters

Bearish

Bullish

Ratio = 10

INSIDER TRANSACTIONS: Recent Filings

Purchases

$ Val

Company/Symbol Insiders Shares (000's)

OutlookTherapeuticsOTLK 1 8,360,000 8,360

MscIndustrialDirectMSM 1 67,796 5,291

SurgalignSRGA 5 3,324,871 4,987

TeledyneTechnologiesTDY 1 10,000 3,660

TexasInstrumentsTXN 1 5,975 997

IntelINTC 1 9,095 503

Brown&BrownBRO 1 10,000 434

AllianceDataSystemsADS 1 6,000 411

CrownCastleInternationalCCI 1 2,000 328

AccelerateDiagnosticsAXDX 1 30,868 314

BankOfSouthCarolinaBKSC 5 14,364 235

CenturyBancorpCNBKA 3 1,921 150

AirTAIRT 2 7,332 148

QumuQUMU 5 18,852 127

SteelPartnersSPLPPR 1 6,065 126

AccurayARAY 1 20,000 100

TraconPharmaceuticalsTCON 1 11,000 99

FastenalFAST 2 2,080 99

SierraBancorpBSRR 1 4,000 88

MarineProductsMPX 3 5,250 86

Sales

$ Val

Company/Symbol Insiders Shares (000's)

MedalliaMDLA 2 870,500 37,160

TexasInstrumentsTXN 10 144,927 24,710

WorkhorseWKHS 5 666,442 19,851

SquareSQ 3 91,018 19,662

PaloAltoNetworksPANW 2 52,000 18,814

SvbFinancialSIVB 6 33,276 15,417

AdobeADBE 3 32,869 15,253

AdaptiveBiotechnologiesADPT 5 252,813 14,810

FirstInterstateBancsystemFIBK 2 331,367 13,192

MorningstarMORN 1 55,193 12,822

StanleyBlack&DeckerSWK 1 67,000 11,658

TradewebMarketsTW 5 152,273 9,646

BootBarnBOOT 4 143,596 8,162

AgilentTechnologiesA 1 63,190 7,745

InteractiveBrokersIBKR 2 120,792 7,662

SmiledirectclubSDC 2 487,000 7,573

PaychexPAYX 1 82,488 7,407

PureStoragePSTG 1 310,000 7,303

AdvancedMicroDevicesAMD 1 81,500 7,237

AmerescoAMRC 3 118,450 6,996

Aninsiderisanyofficer,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