Companies in the Services sector have received a lot of coverage today as analysts weigh in on DHT Holdings (DHT), Wendy’s (WEN) and Sinclair Broadcast (SBGI).
DHT Holdings (DHT)
In a report released yesterday, Jonathan Chappell from Evercore ISI maintained a Buy rating on DHT Holdings, with a price target of $8. The company’s shares opened today at $5.51.
Chappell observed:
“We retain our Outperform rating and price target of $8 on DHT. The promised (and hoped for) cycle is now arriving… Lost amid imploding equity and commodity markets over the last five days has been a meaningful improvement in VLCC spot rates, at a time of year when crude tanker markets are usually seasonally depressed. Indeed, according to Poten & Partners, the benchmark VLCC spot rate (Arabian East) now stands at a TCE of $26,300/day, up from $10,700/day one week ago. VLCC TCE rates from East are at $31,100/day today, up from $19,300/day one week ago. Furthermore, with many refineries only beginning to return from maintenance and newbuild deliveries set to slow in the remainder of the year, we believe this early move in VLCC spot rates is just the beginning of further strengthening into yearend.”
Chappell has an average return of 41.6% when recommending DHT Holdings.
According to TipRanks.com, Chappell is ranked #1571 out of 5229 analysts.
DHT Holdings has an analyst consensus of Moderate Buy, with a price target consensus of $6.67.
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Wendy’s (WEN)
Evercore ISI analyst David Palmer maintained a Hold rating on Wendy’s yesterday and set a price target of $20. The company’s shares opened today at $19.68, close to its 52-week high of $20.14.
Palmer wrote:
“We are maintaining our 2019 and 2020 guidance: $0.61-$0.63; cons. $0.63) and $0.76, respectively. 2Q19 EPS of $0.18 exceed our estimate of $0.16 (cons. $0.17) but we view this to be more timing related with a lower EBITDA growth outlook into 2H19 (EVRe down 1% vs. up 10% in 1H19) driven by: 1) $10M digital scanner investment and 2) G&A incentive compensation true-up of ~$5M. While we are maintaining our 2% SSS outlook for 2H19 given easier YOY comparisons beginning in August through the end of the year, we believe July sales trends have decelerated and we have concerns that new product offerings from competitors could weigh on the 2H19 improvement expected. We maintain our $20 target which is derived from a blended adj. 2020/2021 6.0% FCF yield but we recognize the potential for an upside case of $24 (page 2).”
According to TipRanks.com, Palmer is a 5-star analyst with an average return of 10.3% and a 69.8% success rate. Palmer covers the Consumer Goods sector, focusing on stocks such as Mondelez International, Conagra Brands Inc, and Hostess Brands Inc.
Wendy’s has an analyst consensus of Hold, with a price target consensus of $20.17, a 2.5% upside from current levels. In a report released today, Wedbush also maintained a Hold rating on the stock with a $20 price target.
Sinclair Broadcast (SBGI)
Evercore ISI analyst David Joyce maintained a Hold rating on Sinclair Broadcast yesterday and set a price target of $50. The company’s shares opened today at $46.75.
Joyce said:
“We estimate that Adj. EBITDA was $158M (-22%) before backing out deal expenses, or $4M below our estimate – excluding deal expenses the metric would be above our estimate. EPS of $0.45 was still above our $0.36 but was below the $0.54 consensus. There was a lack of detail in the press release to comment in further granularity.”
According to TipRanks.com, Joyce is ranked #1335 out of 5229 analysts.
Sinclair Broadcast has an analyst consensus of Moderate Buy, with a price target consensus of $64.
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