Barron's - USA (2021-03-01)

M10 BARRON’S March1,2021

ResearchReports

HowAnalystsSizeUpCompanies

These reports, excerpted and edited by Barron’s, were issued recently by investment

andresearchfirms.Thereportsareasamplingofanalysts’thinking;theyshouldnot

beconsideredtheviewsorrecommendationsofBarron’s.Someofthereports’issuers

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

companies being analyzed.

To be considered for this section, material

should be sent [email protected].

Caterpillar•CAT- NYSE

Overweight•Price $222.47 on Feb. 24

by J.P. Morgan

We are raising our CAT estimates on improv-

ing equipment fundamentals, particularly in

construction, mining, and energy. We view the

unprecedented winter storm in Texas as a

catalyst for near-term construction and back-

up power-equipment demand (rental initially,

sales thereafter) while also strengthening bi-

partisan support for a broad-based [national]

infrastructure package. Additionally, U.S. oil/

gas production is likely to accelerate, albeit

off a relatively low base. Separately, we be-

lieve that mining capex is entering a sus-

tained, demand-driven upcycle as hard com-

modity prices continue to rally and equipment

replacement is likely to continue to acceler-

ate. We raise our December 2021 price target

to $237 from $205.

Redfin•RDFN-Nasdaq

Outperform•Price $91.63 on Feb. 25

by Wedbush

Redfin reported strong fourth-quarter re-

sults, plus first-quarter guidance well ahead

of expectations, on both the top and bottom

line. Guidance implies results in the core

real estate services segment well ahead of

our expectations (we raise our 1Q growth

estimate for this business to 53% from 31%).

The strength in the housing market is con-

tinuing to drive material benefits to Redfin.

It is having trouble keeping up with de-

mand, even after making changes to its site

that discourage customers from requesting

tours when an agent is unlikely to be avail-

able. Redfin still doesn’t have nearly the

number of agents it needs for the level of

demand it is seeing and is hiring aggres-

sively to get there. Redfin is also seeing in-

creasing repeat rates and referrals, which

can support longer growth. We continue to

see Redfin as exceptionally well positioned

to [benefit from the] real estate tech evolu-

tion. Our $109 price target is six times our

2022 enterprise value/revenue estimate.

Agree Realty•ADC-NYSE

Outperform•Price $64.56 on Feb. 23

by Baird

Our $77 price target is derived from applying

about a 30% premium to our one-year for-

ward net-asset-value per share estimate of

$58.49. The premium is due to ADC’s exter-

nal growth opportunities, favorable access to

capital markets, active portfolio management,

and the high quality of its existing proper-

ties. Around 68% of ADC’s rent is derived

from tenants [or their parent companies]

with an investment-grade rating. The strong

tenant profile has translated into top-tier

rent collections during the Covid-19 pan-

demic. The low cost of capital, combined with

Agree’s existing tenant relationships, should

yield above-average deal volume, with the

pipeline skewed toward lower-risk invest-

ments.

PennNationalGaming•PENN-Nasdaq

Overweight•Price $117.70 on Feb. 22

by J.P. Morgan

We view PENN as a catalyst-filled stock, su-

percharged to benefit from a post-Covid-19

recovery. We don’t see any need for investors

to be cautious and wait for a pullback to add

here, and the same could be said for most re-

gional/land-based/online-sports betting/iGam-

ing operators. We think this subsector will

continue to work through midyear before one

reasonably has to reassess the risk-reward

balance. We are raising our December 2021

price target to $142 from $134.

Cars.com•CARS-NYSE

Buy•Price $14.30 on Feb. 25

by BTIG

CARS beat fourth-quarter expectations on

both revenue and adjusted Ebitda [earnings

before interest, taxes, depreciation, and

amortization]. Total revenue came in at $153

million versus our $147 million estimate,

which is also where the Street was. Average

revenue per dealer was $2,264, up 6%, year

over year. Management cited FUEL [a sys-

tem that allows car dealers to target online

consumers who are shopping for a car] as a

key contributor. While FUEL has low mar-

gins, that didn’t stop Cars.com from deliver-

ing a gross margin in line with our 82% esti-

mate. Overall, adjusted Ebitda came in at $49

million, versus our $42 million estimate,

helped by lower marketing spending. How-

ever, all three car listings companies expect

higher marketing expense in 2021 as the mar-

ket becomes more competitive. Despite this,

CARS guided to a 1Q adjusted Ebitda mar-

gin of 27% to 30%, bracketing the consensus

of 28%. Overall, we view this as a solid report

that supports our thesis that CARS is rein-

vigorating its top line. Our price target: $16.

Under Armour•UAA-NYSE

Outperform•Price $22.28 on Feb. 19

by Oppenheimer

We are establishing a 12- to 18-month stock-

price target of $30. Over the past several

years, Under Armour and its once enviable

brand have suffered, owing to significant

mismanagement and heightened competition

in the global athleisure marketplace. UAA is

not yet out of the woods, but we are increas-

ingly confident that a much more targeted

consumer focus and improved operational

controls should gradually facilitate a return

to outsize top-line expansion and unlock sig-

nificant profit potential.

INSIDERTRANSACTIONSRATIO

0

10

20

30

40

50

60

70

80

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

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 676, 180 ,232 and 34, 441 ,261 respectively; Source: Thomson Reuters

Bearish

Bullish

Ratio=20

INSIDERTRANSACTIONS:RecentFilings

Purchases

$ Val

Company/Symbol Insiders Shares (000's)

OncorusONCR 1 300,000 5,700

CorvusPharmaceuticalsCRVS 2 1,385,714 4,850

AmericanAssetsTrustAAT 1 117,998 3,480

SignifyHealthSGFY 8 88,900 3,215

SonosSONO 1 53,666 2,004

NuSkinEnterprisesNUS 2 40,870 2,004

FranklinStreetPropertiesFSP 3 369,552 1,553

BridgebioPharmaBBIO 2 24,000 1,500

Kkr&CoKKR 1 26,000 1,251

ZoetisZTS 1 7,590 1,250

AgreeRealtyADC 1 19,525 1,242

AvisBudgetCAR 1 23,735 1,089

FiservFISV 1 9,100 1,010

IncyteINCY 1 12,925 1,000

QuidelQDEL 1 5,000 827

CernerCERN 1 10,655 750

FirstBank(Hamilton)FRBA 1 51,345 549

BumbleBMBL 1 6,535 498

TwoHarborsInvestmentTWO 2 55,000 363

ChevronCVX 1 3,200 305

Sales

$ Val

Company/Symbol Insiders Shares (000's)

PelotonInteractivePTON 6 401,670 59,667

CarvanaCVNA 4 190,301 56,834

Leslie'SLESL 6 2,219,167 55,967

PalantirTechnologiesPLTR 3 1,479,629 39,607

PinterestPINS 3 451,185 38,791

SchrodingerSDGR 3 357,559 36,806

TwilioTWLO 6 84,131 36,233

MarathonPatentMARA 1 700,000 34,055

JfrogFROG 6 507,478 33,663

SonosSONO 1 895,285 32,038

CheggCHGG 1 300,000 29,866

ZoetisZTS 4 165,955 26,913

PacificBiosciencesOfCaliforniaPACB 4 549,937 26,904

RaymondJamesFinancialRJF 2 230,000 26,834

CrisprTherapeuticsCRSP 1 171,003 25,498

CloudflareNET 4 300,080 24,897

LovesacLOVE 1 400,000 23,017

DuckCreekTechnologiesDCT 4 427,668 22,953

TeConnectivityTEL 2 175,045 22,880

SeerSEER 1 354,741 22,757

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