Barron's - USA (2021-11-22)

November 22, 2021 BARRON’S 45

Research Reports

HowAnalystsSizeUpCompanies

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research firms. The reports are a sampling of analysts’ thinking; they should not be

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provided, or hope to provide, investment-banking or other services to the companies

being analyzed.

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Lowe’s•LOW-Nasdaq

Neutral•Price $245.73 on Nov. 17

by Wedbush

Lowe’s reported third-quarter results that

met buy-side expectations on sales comps,

but beat on margins. Home improvement

demand remains solid. LikeHome Depot

(ticker: HD), Lowe’s did not experience any

material negative demand from higher

prices. Despite more difficult comparisons in

December and January, Lowe’s implied

fourth-quarter flattish comp guidance is

very conservative. All in, it reported operat-

ing margins of 12.2% (+240 basis points

[each equal to 1/100th of a percentage

point], year over year) versus the consensus

10.8% estimate, and earnings per share of

$2.73 versus the consensus $2.35. The com-

pany plans to address its 2022 outlook at a

virtual meeting on Dec. 15. While Lowe’s is

executing well and has material medium-

term margin expansion potential, we con-

tinue to favor HD, given its higher exposure

[to construction and home-improvement

pros.] We are raising our estimates, increas-

ing our target price to $260 from $210, but

reiterating our Neutral rating on Lowe’s.

Cisco Systems•CSCO-Nasdaq

Outperform•Price $56.86 on Nov. 17

by Evercore ISI

Cisco reported October-quarter results of

$12.9 billion in sales and 82 cents in EPS,

versus the Street consensus of $13 billion/80

cents. Cisco saw strong 8% top-line growth,

driven by strength across several key seg-

ments (Internet of future +46%, Secure Ag-

ile networks +10%). The challenge with the

print was that its January-quarter guidance

came in below expectations. Cisco is calling

for 4.5% to 6.5% sales growth, versus the

Street’s 7.3%, in light of supply-chain chal-

lenges. Positively, Cisco maintained its fiscal-

year 2021 guidance of 5% to 7% top-line

growth and noted that it is seeing signs of

supply-chain normalization. In addition,

robust order growth, which accelerated to

+33% in the quarter (versus 31% in July),

should give investors confidence in the multi-

year growth profile as supply-chain issues

fade and information-technology deployments

accelerate, driven by the shift in digital

transformation. We are sticking with our $67

price target.

Sportradar Group•SRAD-Nasdaq

Buy•Price $21.83 on Nov. 17

by Needham

We see Sportradar’s shares as a compelling,

way of benefiting from the growth of sports

betting globally and the increasing impor-

tance of in-game betting. Sportradar [which

provides event data to sportsbooks] has

signed an exclusive contract with the NBA,

following the loss of its NFL contract to

GeniusSports(GENI, Buy, $29 PT). We are

encouraged that Sportradar is adding reve-

nue sources like distribution streaming rights

and directing advertising spending on behalf

of sportsbooks. We see the risk-reward ratio

skewing toward our bull case, given the im-

portance of high-quality data as in-game bet-

ting becomes increasingly important. We are

increasing our price target to $30 [from $28].

Activision Blizzard•ATVI-Nasdaq

Outperform•Price $66.14 on Nov. 16

by BMO Capital Markets

The Wall Street Journal published an article

[a few days ago] alleging that CEO Bobby

Kotick knew about sexual misconduct at the

company [but mishandled the situation].

While Activision Blizzard has stated that the

article was misleading, pressure continues to

mount, and we expect it’s becoming increas-

ingly more likely that Kotick steps down. We

maintain our Outperform rating, as we see

significant value in Activision’s intellectual

property and game brands. We anticipate the

stock will see a relief bounce if Kotick re-

signs, and note the depressed share price

could make it an attractive takeover target

for a larger tech company. Price target: $90.

PNC Financial Services•PNC-NYSE

Perform•Price $199.13 on Nov. 18

by Oppenheimer

PNC reported third-quarter EPS of $3.30,

versus the consensus $3.35; however, these

figures contain noise from reserve releases

and merger-related items. On a core basis,

we’d place EPS at around $3.55, versus our

estimate of $3.09, mainly on lower charge-

offs and strong private-equity gains. On bal-

ance, the results leave our outlook for 2022

and beyond basically unchanged. We gener-

ally like PNC. It has good businesses, a

solid track record, and well-regarded man-

agement. The company’s longer-term

growth prospects are very favorable, but its

valuation keeps us on the sidelines.

Fresenius Medical Care•FMS-NYSE

Sector Perform•Price $32.96 on Nov. 15

by RBC Research

Fresenius [which provides kidney dialysis

and related services and products] posted

third-quarter results in line with expecta-

tions, despite reacceleration of excess mortal-

ity from Covid-19, due to the Delta variant.

Despite this, the company achieved 1.2%

organic top-line growth, driven by a reim-

bursement increase in the U.S., continued

payor-mix improvement from strong Medi-

care Advantage growth, and solid underlying

demand and return of elective medical proce-

dures in the Asia-Pacific region. However, we

are lowering our price target to $35 from

$42, primarily on sector rerating.

INSIDER TRANSACTIONS RATIO

0

19

38

57

76

95

114

133

152

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

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 788, 955 ,816 and 60, 472 ,537 respectively; Source: Thomson Reuters

Bearish

Bullish

Ratio = 13

INSIDER TRANSACTIONS: Recent Filings

Purchases

$ Val

Company/Symbol Insiders Shares (000's)

Io BiotechIOBT 3 1,050,000 14,700

Uber TechnologiesUBER 1 200,000 8,985

Perimeter SolutionsPRM 4 546,914 5,469

Continental ResourcesCLR 1 108,500 5,174

PlaytikaPLTK 1 150,000 3,243

Illinois Tool WorksITW 1 10,000 2,353

Moneygram InternationalMGI 10 403,292 2,342

Sarepta TherapeuticsSRPT 1 25,026 2,001

PaypalPYPL 1 9,780 1,999

SylvamoSLVM 4 60,340 1,879

Thryv HTHRY 1 45,000 1,598

American Assets TrustAAT 1 35,535 1,382

EhealthEHTH 4 44,056 1,305

Jackson FinancialJXN 1 38,925 1,283

FiskerFSR 3 57,434 1,256

Krispy KremeDNUT 2 90,000 1,248

Wheels Up ExperienceUP 1 200,000 1,156

Boston ScientificBSX 1 25,000 1,049

Bluegreen VacationsBVH 2 33,403 1,026

Whiting PetroleumWLL 1 15,150 1,025

Sales

$ Val

Company/Symbol Insiders Shares (000's)

RobloxRBLX 5 902,095 94,264

DatadogDDOG 4 348,879 66,720

WorkivaWK 1 330,000 49,830

Vita CocoCOCO 1 3,240,000 48,600

ConfluentCFLT 3 573,712 47,260

ApplovinAPP 2 395,833 42,250

Coinbase GlobalCOIN 2 119,490 41,406

Advanced Micro DevicesAMD 5 257,416 38,514

Knowbe4KNBE 1 1,538,246 38,025

UpstartUPST 4 151,500 37,741

Site CentersSITC 1 2,100,000 34,723

Avis BudgetCAR 4 123,054 33,221

C3AiAI 3 646,219 31,227

Amc EntertainmentAMC 5 763,331 30,755

DropboxDBX 3 1,051,721 28,046

Installed Building ProductsIBP 2 202,000 26,637

RokuROKU 4 97,475 26,586

RevolveRVLV 3 308,723 25,229

ZiprecruiterZIP 4 802,941 24,411

Big 5 Sporting GoodsBGFV 6 574,098 23,511

Aninsiderisanyofficer,directororownerof10%ormoreofaclassofacompany'ssecurities.Inmostcases,aninsidermustreportanytradetothe

SECwithintwobusinessdays.ThetableshighlightcompaniesthatfiledwiththeSECthroughlastWednesday.Thetablesdonotincludepension-

planoremployeestock-optionactivity,tradesbybeneficialownersof10%ormore,tradesunder$2pershareortradesunder100shares.The

"Purchases"columnincludesonlyopen-marketandprivatepurchases;the"Sales"columnincludesonlyopen-marketandprivatesales,and

excludestradesprecededbyoptionexerciseinthe12monthspriortothereportedevent. Source:ThomsonReuters