There’s a lot to be optimistic about in the Consumer Goods sector as 2 analysts just weighed in on Luna Innovations Inc (LUNA) and Skyworks Solutions (SWKS) with bullish sentiments.
Luna Innovations Inc (LUNA)
In a report released today, Dave Kang from B.Riley FBR maintained a Buy rating on Luna Innovations Inc, with a price target of $5.70. The company’s shares closed yesterday at $4.65.
Kang wrote:
“LUNA reported 2Q sales/EPS of $17.8M/$0.04 (non-GAAP), ahead of consensus estimates of $15.6M/$0.01. The company raised its 2019 revenue/AEBITDA guidancefrom $60M-$65M/ $6.0M-$6.5M to $66M-$69M/$7.2M-$7.6M. Management cited broad-based strength across both Tech/Dev as well as Prod/Licensing. As expected, GM increased to 49.1% from 45.6% in 1Q, driven by higher volume and favorable mix. New products, coupled with secular growth in datacenter and advanced materials, are enjoying a solid tailwind despite macro headwinds. We raise our 2019/2020 EPS estimates from $0.13/$0.18 to $0.17/$0.19. We raise our PT from $5.50 to $5.70, which is based on an unchanged EV/sales multiple of 2.2x our 2020 revenue estimate plus net cash. Maintain Buy.”
According to TipRanks.com, Kang is a 5-star analyst with an average return of 18.9% and a 62.8% success rate. Kang covers the Consumer Goods sector, focusing on stocks such as DASAN Zhone Solutions Inc, Applied Optoelectronics, and Acacia Communications.
Currently, the analyst consensus on Luna Innovations Inc is a Moderate Buy with an average price target of $5.85, implying a 25.8% upside from current levels. In a report released today, Northland Securities also assigned a Buy rating to the stock with a $6 price target.
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Skyworks Solutions (SWKS)
B.Riley FBR analyst Craig Ellis reiterated a Buy rating on Skyworks Solutions today and set a price target of $95. The company’s shares closed yesterday at $79.90.
Ellis commented:
“SWKS F3Q19 result matched the Street, though F4Q19’s guide was $20M/$0.08 below, in part as Huawei dropped to minimal levels and as an uncertain macro drives conservatism. However, excluding Huawei the business is growing 20% Q/Q in F4Q, we believe signaling strong Integrated Mobile content gain and continued Broad Markets growth. Shares eased 4.5% AMC, slightly more than returning the day’s gains, we believe as we and others suspected greater Huawei shipment potential in the post-shipment resumption period. Overall, we had three key takeaways. First, despite volatile customer dynamics SWKS is operating well, with resilient gross margins and strong opex control. That’s sustaining healthy EPS in a cyclical trough period. Inventory is at the high end of the target range, but normalize in F4Q&1Q.”
According to TipRanks.com, Ellis is a 4-star analyst with an average return of 6.1% and a 51.7% success rate. Ellis covers the Consumer Goods sector, focusing on stocks such as Applied Materials Inc, Axcelis Technologies, and Rudolph Technologies.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Skyworks Solutions with a $85.27 average price target.
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