Analysts are weighing in today on offshore drilling giant Transocean LTD (NYSE:RIG), online retail giant Amazon.com, Inc. (NASDAQ:AMZN), electric car giant Tesla Motors Inc (NASDAQ:TSLA), and internet radio giant Pandora Media Inc (NYSE:P).
Canaccord Genuity analyst Alex Brooks weighed in with a few insights on Transocean after the company announced that it is going to delay the delivery of its two ultra-deepwater drillships under construction at Jurong yard by two years each. The analyst maintained a Sell rating on RIG with a price target of $10.00, which reflects a potential downside of 40% from Wednesday closing price.
Brooks wrote, “We now see the net requirement for new debt capital at $1.25bn by the end of 2016, and a further $1.25bn by the end of 2017. Whilst this is not trivial, there are a number of avenues open to Transocean to fund this, including additional dropdowns into Partners (potentially the first two Shell drillships due in 1H16). This leaves the question of compliance with covenants. On our forecasts, Transocean’s net debt : EBITDA will peak at over 6.25x in 2018E before falling, but the more important gross debt to tangible capital will peak at just 48% – and the limit is 60%. We nonetheless continue to see a high risk of an equity issue, particularly with potentially attractive opportunities opening up to consolidate the industry.”
According to TipRanks.com, analyst Alex Brooks has a total average return of 8.8% and a 66.7% success rate. Brooks has an -2.8% average return when recommending RIG, and is ranked #1663 out of 3632 analysts.
Evercore ISI analyst Ken Sena downgraded shares of Amazon from a Buy to a Hold rating, while keeping the price target at $460, which represents a slight upside potential from current levels.
Sena commented: “We’re reducing our Amazon rating to HOLD from BUY as shares now trade within a close range of our $460 target. While retail and Amazon Web Services (AWS) trends appear on track and N/T operating margins seemed poised for upside this quarter and next, our reduced rating recognizes the strong run in shares, now up 45% YTD, and the growing capital investment we are seeing through leasing activity, making modeling upside on the basis of FCF increasingly difficult.”
Analyst Ken Sena has a total average return of 6.3% and a 53.3% success rate. Sena has a 21.3% average return when recommending AMZN, and is ranked #901 out of 3632 analysts, according to TipRanks.
Tesla Motors Inc
Jefferies analyst Dan Dolev reiterated a Buy rating on Tesla Motors, while raising the price target to $360 (from $350), which implies an upside of 35.8% from current levels.
Dolev noted, “Our survey of ~145 Tesla owners challenges conventional wisdom that owners are a uniform group of luxury car buyers (e.g. Mercedes-Benz S-Class or BMW 7-Series). The survey highlights a longer-than-expected tail of 82 unique substitute combustion engine models (only ~25% were AVs), with 13 of the top 20 models priced at <$60K and 4 priced at <$35K.”
“On average, owners were willing to pay ~60% more for a Tesla, so that introducing Model III by 2017 (expected ASP of +/-$50K) should help Tesla tap into the $35K+ price point. Our detailed analysis of actual US/North America sales and pricing by make and model across 200+ different models implies an aggregate global TAM of ~19m vehicles for Models S, X and III combined, or roughly 75% above our initial estimate.”, the analyst added.
Analyst Dan Dolev has a total average return of 13.9% and a 83.9% success rate. Dolev has a 13.8% average return when recommending TSLA, and is ranked #605 out of 3632 analysts, according to TipRanks.
Pandora Media Inc
Canaccord Genuity analyst Michael Graham maintained a Buy rating on Pandora with a $26 price target after holding a series of investor meetings with Pandora management and spoke with music and advertising contacts.
Graham stated, “We continue to believe Pandora’s business is progressing nicely within the context of a rapidly changing music industry. Many investors feel more comfortable waiting until the CRB decision regarding new rates is handed down (likely close to December 14). It is hard to argue strenuously with this risk-averse stance. However, we continue to believe the range of likely outcomes is fairly narrow, and we believe the stock is reflecting expectations of a negative outcome. In addition, short interest has held fairly level at ~26M shares (12% of outstanding).”
“Meanwhile, we believe Pandora continues to improve its monetization abilities with advertiser enthusiasm high. We think Pandora will evolve its service over time to leverage its large user base and ensure that it remains one of the leading, relevant music services in a music industry that is shifting rapidly towards its strengths.”, the analyst added.
Analyst Michael Graham has a total average return of 16.0% and a 54.9% success rate. Graham has a 18.3% average return when recommending P, and is ranked #172 out of 3632 analysts, according to TipRanks.