Barron\'s 03.16.2020

March 16, 2020 BARRON’S M11

Research Reports

HowAnalystsSizeUpCompanies

Thesereports,excerptedandeditedbyBarron’s,wereissuedrecentlybyinvestment

and research firms. The reports are a sampling of analysts’ thinking; they should

notbeconsideredtheviewsorrecommendationsofBarron’s.Someofthereports’

issuers have provided, or hope to provide, investment-banking or other services to

the companies being analyzed.

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United Parcel Service•UPS-NYSE

Buy•Price $87.18 on March 10

by Stifel

After the selloff in the market, one of the

names most interesting to us, due to

healthy cash generation, is UPS. While

we’re lowering estimates for the parcel

names, we believe UPS [which just an-

nounced that it will have a new CEO, effec-

tive June 1] has a steadier earnings and

cash-flow profile that investors should find

attractive in a fearful market.

Domestic Package (63% of revenue; 54%

of earnings before interest and taxes) is

where the business is growing nicely,

given the assumption of FedEx business

for Amazon.com. Margins leave something

to be desired, but as long as volume isn’t

hit too hard by the coronavirus, earnings

should be OK. We are reducing our 2020

and 2021 earnings-per-share estimates

from $7.90 and $8.35, respectively, to $7.02

and $7.71. FedEx next week will give us

the latest update on the parcel market’s

outlook, so we may revise estimates again.

Regardless, we feel UPS stock is compel-

ling enough to warrant an upgrade in the

middle of this selloff. Target price: $104.

Torm•TRMD-Nasdaq

Outperform•Price $7.10 on March 11

by Evercore ISI

Torm posted fourth-quarter 2019 EPS of 37

cents (excluding one-time items), a penny

below our forecast, but still representing its

most profitable period since first-quarter

2016. The company [a tanker concern that

transports refined-oil products] has re-es-

tablished a dividend for the period, with 10

cents a share recommended to the board

and likely to be paid on May 6. Further-

more, the board has approved the begin-

ning of a modest share-buyback program

for the first half of 2020, adding to the total

capital return. Perhaps most importantly,

first-quarter-to-date rates have come in

very strong, and with 87% of the quarter

already booked, Torm is trending toward a

more-than-doubling of its EPS for first-

quarter 2020 versus fourth-quarter 2019.

Developments in the tanker market are

fluid, with plummeting demand forecasts

offset by accelerating oil production and as-

sociated floating storage. The supply side

remains constrained, however, with uncer-

tainty keeping the order book muted. We

are maintaining our spot-rate forecasts

through 2021 for now, pointing to substan-

tial EPS expansion at Torm in 2020 and

2021. We retain our Outperform rating, but

lower our price target to $16 from $18.

Charter Communications

• CHTR-Nasdaq

Buy•Price $476.76 on March 11

by Benchmark Research

We are upgrading our rating to Buy from

Hold, with a $573 price target, which is

ahead of our prior $541 fair value assess-

ment. We view cable stocks as good haven

candidates, given their recurring revenue

and battened-down capital structures, de-

spite Monday’s indiscriminate selloff of vir-

tually all leveraged names. Also, we are in-

creasingly confident that 5G may have only

a near-neutral effect on cable, even as mo-

bile carriers with ambitious deployment

plans (at perhaps naive cost assessments)

may be disciplined into more rational be-

havior, given possible prolonged economic

and debt-market dislocations. Our $573

price target assumes that the S&P 500 in-

dex ends 2020 at 2800 and represents a

near-17 times target multiple of earnings.

Rosetta Stone•RST-NYSE

Outperform•Price $11.60 on March 12

by Barrington Research

Last night, after the market close, Rosetta

Stone reported results of its fourth quarter

and year, ended Dec. 31, that were generally

better than expected. Guidance for 2020 was

lowered, due primarily to planned invest-

ments in sales and marketing and an abun-

dance of caution, while longer-term expecta-

tions were reaffirmed across most key

metrics.The stock fell on the reduced guid-

ance and is down 30% year to date. With the

transition to a subscription model complete,

we’d be buyers onweakness.Reiterate

Outperform rating. Suitability/Risk: specu-

lative. Our price target goes to $20 from

$25, to reflect lower multiple assumptions

and slightly lower revenue expectations.

Carnival•CCL-NYSE

Overweight•Price $18.59 on March 12

by Wells Fargo Securities

After a series of company and industry-

related Covid-19 announcements, Carnival

has announced the suspension of Prin-

cess brand operations (about 20% of its

cruise capacity) for 60 days. This will fur-

ther question the company’s near-term li-

quidity (a dividend suspension is a fore-

gone conclusion). We estimate that the loss

of Princess revenue will have about a $2-a-

share 2020 impact on Carnival.

Covid-19’s impact on the industry

will be severe. But major operators are al-

most “too big to fail” from the perspective

of European ship building. There probably

will be broad EU/U.K./North American/

Chinese/Australian government support

for the travel/tourism industry, given

Covid-19’s unusually severe impact. And

return of capital to shareholders is likely

to continue in fiscal 2020-21.

INSIDER TRANSACTIONS RATIO

0

10

20

30

40

50

60

M A M J J A S O N D J FM

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 413, 145 ,563 and 83, 503 ,288 respectively; Source: Thomson Reuters

Bearish

Bullish

Ratio = 5

INSIDER TRANSACTIONS: Recent Filings

Purchases

$Val

Company/Symbol Insiders Shares (000's)

EnergyTransferET 4 1,368,400 10,657

NewellBrandsNWL 4 707,078 10,413

SixFlagsEntertainmentSIX 1 300,000 6,595

KinderMorganKMI 1 300,000 5,854

PlanetFitnessPLNT 4 86,000 5,510

NielsenHoldingsNLSN 1 250,000 4,083

AmercoUHAL 3 13,000 4,058

TrinityIndustriesTRN 2 177,235 3,613

NorthernOilAndGasNOG 1 3,352,443 3,584

Freeport-McmoranFCX 2 335,000 3,358

AmnealPharmaceuticalsAMRX 3 850,000 3,157

QurateRetailQRTEA 1 550,000 2,995

WesternMidstreamPartnersWES 2 422,200 2,913

ProsperityBancsharesPB 5 56,300 2,880

NustarEnergyNS 5 236,000 2,585

RevolveGroupRVLV 2 196,000 2,569

PncFinancialServicesGroupPNC 1 24,415 2,500

UpworkUPWK 2 275,000 2,217

RangeResourcesRRC 2 918,128 2,014

KarAuctionServicesKAR 3 111,355 1,951

Sales

$ Val

Company/Symbol Insiders Shares (000's)

SbaCommunicationsSBAC 6 161,990 47,467

ZoetisZTS 2 307,438 43,411

Marsh&MclennanCosMMC 6 310,267 33,146

TellurianTELL 1 17,988,676 27,496

QuestDiagnosticsDGX 1 230,178 25,935

TradeDeskTTD 2 80,004 21,973

AlteryxAYX 2 148,950 21,082

BlacklineBL 1 314,798 19,407

ZoomVideoCommunicationsZM 4 172,860 19,399

BroadcomAVGO 1 75,000 18,962

AmerescoAMRC 2 805,000 17,104

ThermoFisherScientificTMO 2 49,000 15,767

TylerTechnologiesTYL 3 46,000 15,179

ExtraSpaceStorageEXR 2 130,000 14,114

Five9FIVN 5 184,134 13,414

BeyondMeatBYND 2 134,083 13,379

RealpageRP 1 200,000 12,569

Salesforce.comCRM 4 75,119 12,410

SlackTechnologiesWORK 4 349,452 10,481

QorvoQRVO 2 111,102 10,450

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