There’s a lot to be optimistic about in the Consumer Goods sector as 3 analysts just weighed in on Pacific Ethanol (PEIX), Vishay Precision Group (VPG) and Kratos Defense (KTOS) with bullish sentiments.
Pacific Ethanol (PEIX)
B.Riley FBR analyst Carter Driscoll maintained a Buy rating on Pacific Ethanol today and set a price target of $5. The company’s shares closed yesterday at $1.81, close to its 52-week low of $1.38.
Driscoll said:
“E15 could provide bounce but oversupply market remains. We are lowering our estimates and PT for Pacific Ethanol (PEIX—Buy, $5 PT) on continued oversupply in the domestic corn ethanol market. The ongoing tariff issues with China are also impacting the export markets, with the 30% import tariff locking U.S. producers out of China since early 2018. This effectively removes 200M+ gallons of ethanol demand from China, helping to keep domestic markets in oversupply. On the other hand, Trump’s declaration that he wants to end the summer ban of higher blending rates could soak up some excess capacity in 2019 but more likely have a greater impact in 2020.”
According to TipRanks.com, Driscoll is currently ranked with no stars on a 0-5 star ranking scale, with an average return of -8.8% and a 33.5% success rate. Driscoll covers the Industrial Goods sector, focusing on stocks such as Ballard Power Systems, Amer Superconductor, and Canadian Solar Inc.
The word on The Street in general, suggests a Strong Buy analyst consensus rating for Pacific Ethanol with a $6.50 average price target, implying a 259.1% upside from current levels. In a report issued on November 2, H.C. Wainwright also maintained a Buy rating on the stock with a $8 price target.
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Vishay Precision Group (VPG)
In a report released today, Sarkis Sherbetchyan from B.Riley FBR reiterated a Buy rating on Vishay Precision Group, with a price target of $53. The company’s shares closed yesterday at $36.71.
Sherbetchyan wrote:
“Before the market open on Group (VPG, $53 PT) reported 3Q results above expectations. VPG’s total revenues of $75.5M exceeded our forecast of $73.5M, and the midpoint of VPG’s $70M-$77M guidance. The top-line beat and product mix drove better than expected GM%, while operating expenses came in below our model. As a result, VPG generated adjusted EBITDA of $13.5M, which beat our $11.6M estimate. Similarly, adjusted EPS of $0.57 exceeded our forecast of $0.45 and the consensus of $0.49. Shares closed the day ~6% higher (compared to +0.55% for the Russell 2000). VPG introduced 4Q sales guidance of $73M-$80M, the midpoint of guidance was in line with our/consensus estimate of $77M prior to revisions.”
According to TipRanks.com, Sherbetchyan is a 4-star analyst with an average return of 6.1% and a 48.9% success rate. Sherbetchyan covers the Consumer Goods sector, focusing on stocks such as Lightpath Technologies, S&W Seed Company, and Ferroglobe PLC.
Vishay Precision Group has an analyst consensus of Moderate Buy, with a price target consensus of $53.
Kratos Defense (KTOS)
B.Riley FBR analyst Mike Crawford reiterated a Buy rating on Kratos Defense today and set a price target of $16. The company’s shares closed yesterday at $13.19.
Crawford commented:
“Buy-rated Kratos (KTOS, $16 PT) fashioned a fine 3Q18 performance, producing $159M revenue and $16.7M EBITDA, besting $158M/$13.1M consensus, built on the backs of strong shipments and bookings. In this regard, bookings were $223M in the period, for a 1.4x book:bill, bringing backlog to $572M, including $528M funded. As such, we continue to see both margins and top-line trajectory inflecting higher given increased production cadence and a steady stream of awards, particularly for KTOS’ proprietary unmanned aerial systems solutions. In this regard, we lift FY18 revenue and EBITDA projections from $640M/$58M to $644M/$60M, while our FY19 projections adjust from $728M/$82M to $738M/$77M, we believe better reflecting both pace of ramp and initial margin profile on new manufactured unmanned aerial system platforms.”
According to TipRanks.com, Crawford is a 4-star analyst with an average return of 8.4% and a 57.3% success rate. Crawford covers the Consumer Goods sector, focusing on stocks such as CPI Aerostructures, Finjan Holdings, and Silicon Motion.
Kratos Defense has an analyst consensus of Moderate Buy, with a price target consensus of $18.
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