Yesterday, Dougherty analyst Charlie Anderson reiterated a Buy rating on shares of GoPro, while slashing the price target to $13 (from $30), after the action camera company cut sales estimates and announced it will be letting go of 7% of its workforce.
Anderson observed, “GoPro finally delivered the bad news that the market had been anticipating since weak Black Friday/Cyber Monday indicators and the subsequent price cut on the Hero4 Session. Even with a 7% headcount reduction, also announced Wednesday, we now expect GoPro to lose money through 1H16. The stock was indicated post-close at ~$11, or 0.75x EV/S and 25x P/E on our new deeply-lowered FY16 estimates. In terms of EV/S, that is nearly as low as we’ve ever seen peers. On P/E, it is well above floor valuations. If the stock traded to a 12x P/E it would be at a 0.2x EV/S. Never say never, but we can’t fathom that. So at $11, we believe downside is fairly limited. For the stock to work again, GoPro clearly needs to exceed expectations on the Karma drone (due 1H16). Our new $13PT is based on 1x EV/S.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Charlie Anderson has a yearly average return of 6.1% and a 44% success rate. Anderson has a -37.7% average return when recommending GPRO, and is ranked #799 out of 3607 analysts.
Out of the 19 analysts polled by TipRanks, 7 rate GoPro stock a Buy, 10 rate the stock a Hold and 2 recommend to Sell. With a return potential of 74.5%, the stock’s consensus target price stands at $20.
Wal-Mart Stores, Inc.
Today, MKM Partners analyst Patrick Mckeever reiterated a Neutral rating on shares of Wal-Mart, with a price target of $63, following the news that Wal-Mart will close 269 stores (154 of them in the U.S.), a move that will result in 16,000 job cuts.
The news doesn’t change our basic investment thesis — encouraged by recent traffic gains (up 1.7% in 3Q15 and likely held up in 4Q) but we think the story is still too mixed (ongoing earnings pressures, slowing e-commerce) and we don’t see enough upside potential in the stock at 15.2x our 2016 EPS estimate vs. a 13x-14x historical valuation to get constructive. That said, we recognize that WMT could continue to outperform (up 1% YTD vs. SPX down 9%) if heightened concerns about the macro environment persist, given the company’s more defensive business model (more than 55% grocery/consumable).
According to data compiled by TipRanks.com, analyst Patrick Mckeever has a yearly average return of 4.3% and a 59.2% success rate. Mckeever is ranked #642 out of 3607 analysts.
The overwhelmingly majority of analysts still say Apple is a “hold.” The average forecast is for the stock to hit $65.38 in the coming months, according to TipRanks.