U.S. stocks traded higher on Friday as investors digested Fed Chair Janet Yellen speech, while parsing through upbeat results from JPMorgan and Citigroup and U.S. economic data. Among the equities in focus on Smarter Analyst today are GoPro Inc (NASDAQ:GPRO) and Alibaba Group Holding Ltd (NYSE:BABA). Let’s take a closer look:
As Wall Street debates the progress of GoPro’s recently unveiled “Hero 5” camera, Pacific Crest analyst Brad Erickson is out today with his insights. The analyst rates GPRO a Sector Weight, without providing a price target.
Erickson wrote, “Our checks over the past 11 days since Hero 5 products launched have shown unusually inconsistent distribution, with Best Buy being the only retailer we spoke to having had steady stock. In cases like Target, WalMart or REI, it’s unclear whether GoPro is playing catch-up on its initial ship-in, or if some retailers are proactively managing down GoPro’s shelf space.”
“Positively, we found overall days of inventory at <9 days; no cause for concern, from our perspective, as we estimate overall sell-through tracking up nearly 30% y/y. Negatively, we think 80% to 90% of initial demand is skewing toward the Hero 5 Black, which we view as indicative that Session is off to a disappointing start. Sales person feedback indicates that the touch screen functionality and similar video quality of the Black is proving more compelling at only $100 more,” Erickson added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brad Erickson has a yearly average loss of 3.6% and a 54% success rate. Erickson is ranked #3471 out of 4182 analysts.
Out of the 13 analysts polled by TipRanks (in the past 3 months), 3 rate GoPro stock a Buy, 8 rate the stock a Hold and 2 recommend a Sell. With a downside potential of 3%, the stock’s consensus target price stands at $13.25.
Alibaba Group Holding Ltd
As the earnings season gets underway, Nomura analyst Jialong Shi sets expectations on Alibaba. The analyst maintained a Buy rating on the stock, while increasing his target price to $129 (from $95), due mainly to a higher valuation for Alibaba’s investees. The new price target represents a potential upside of 26% from where the stock is currently trading.
Shi wrote, “We looked for 52% YoY revenue growth in 2QFY17 (ending on 30 Sept 2016) versus consensus estimate of 54%. We estimate China retail revenue grew 44% YoY. We think this growth rate was solid despite a slowdown from the 49% growth in 1QFY17, which was helped partially by a temporary low comp. We estimate 2Q non-GAAP EPS rose 27% YoY to CNY4.6/share, in line with Street consensus. Its non-GAAP operating margin likely dropped 5ppts YoY due to the consolidation of Youku and Lazada.” As such, “We increase our FY17/18F earnings estimate by 8%/9%, mainly on the back of a higher revenue forecast.”
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to data compiled by TipRanks.com, Jialong Shi has a yearly average return of 14.4% and a 76% success rate. Shi has a 24.6% average return when recommending BABA, and is ranked #622 out of 4182 analysts.
The overwhelmingly majority of analysts on TipRanks say BABA is a “Buy.” The average forecast is for the stock to hit $116 in the coming months.