The trade war between the U.S. and China continues to heat up this week as President Trump blacklisted the technology giant Huawei and China promised to retaliate.
But even amid the trade war noise, Wall Street analysts are hunting down great values and have identified plenty of “compelling” names to add to your portfolio.
Familiar names like Wendy’s (NASDAQ: WEN), Ameriprise Financial (NYSE: AMP), Energizer (NYSE: ENR), Alibaba (NYSE: BABA), MSG Networks (NYSE: MSGN), and Take-Two Interactive (NASDAQ: TTWO) have been singled out by analysts.
First up is Wendy’s. Early this week, analysts at Piper Jaffray initiated coverage on the stock and gave it an Outperform rating and a $22 price target, indicating possible upside of 15% over the next twelve months.
“From a stock perspective, we believe WEN shares offer compelling opportunity as the company works to leverage its made-fresh value proposition and continues to grow its asset-light base,” wrote Piper Jaffray analyst Nicole Miller Regan.
Analyst Andrew Kligerman at Credit Suisse is bullish on Ameriprise Financial and upgraded the stock “to outperform on compelling growth.” “We like that AMP is less sensitive to the balance sheet than life peers,” Kligerman said.
Kligerman also boosted their price target for AMP from $145 to $202, which would see the stock 38% higher over the next twelve months.
Take-Two Interactive’s earnings report may have disappointed some analysts as the company reported a weaker-than-anticipated outlook, but the report didn’t diminish Wedbush’s view on the stock.
“Take-Two has consistently delivered upside to guidance and consensus, making its shares attractive over the near term,” wrote Wedbush analyst Michael Pachter. “We are reiterating our OUTPERFORM rating on Take-Two shares as they continue to present a compelling value.”
Jeffries analyst Kevin Grundy reiterated their Buy rating on Energizer. “We raise our FY20-21 EBITDA/FCF [estimates] by ~2.5% after ENR’s solid 2Q… which was reported on 5/7, and encouraging FY19-20 guidance,” Grundy wrote. “ENR is a highly-levered deal stock in a ‘risk-off’ tape; however, battery fundamentals remain strong… and shares offer compelling value at 9.5x EV/EBITDA.”
Jeffries twelve month price target for ENR is $64 – nearly 40% higher than Wednesday’s closing price.
Imperial Capital’s David Miller issued an Outperform rating for MSG Networks—formerly known as The Madison Square Garden Company—and wrote in a research note to clients, “We believe F2020 could be incredibly compelling. And so we posit rhetorically, if MSGN can grow advertising in a year when both teams were not particularly competitive, imagine what happens when the Knicks become instantly competitive, which starting on 7/1/19, is a scenario that could play out with the Knicks.”
“Advertising effects on these networks given a completely different player line-up is universally compelling, and not at all built in to the stock price,” Miller wrote. “In the meantime, because small-cap value is not particularly in vogue right now, the stock is trading at/near a trough multiple, certainly a unique opportunity for investors willing to be patient.”
Investors are skittish about Chinese-based companies right now in reaction to the trade war and ongoing concerns about a slow-down in China, but the situation with the country isn’t dampening SunTrust’s opinion on Alibaba stock.
BABA shrugged off concerns about escalating trade tensions between the U.S. and China last week when it posted fiscal fourth quarter earnings that topped expectations. The Chinese e-commerce giant forecast more than 500 million renminbi in revenue for its fiscal year ending next March, which represents roughly 33% growth, an estimate that SunTrust believes is conservative. In its just-ended fiscal year, the company’s top line grew by 51% as Alibaba reported $56 billion in revenue.
SunTrust analyst Youssef Squali said these latest numbers were “robust and ahead of expectations on virtually every important metric, highlighting the resilience of Alibaba’s business model in the face of a cooling Chinese economy (although recently stimulated by fiscal policies) and strong macro headwinds.”
Squali reiterated their Buy rating on BABA and set their price target at $200, 26% higher than the current price. The average analyst price target for the stock is $217, indicating possible upside of 37% over the next twelve months.