We’ve identified eight listed technology stocks that have drawn a great deal of attention on Alacra Pulse during 2010 and are worth following in 2011. They range from red hot companies such as Apple (AAPL), to lukewarm ones such as Yahoo! (YHOO). Hot privately held companies, such as Facebook, Groupon and Twitter, are not included.
The online retailer had a successful holiday season, but analysts still wonder if the company’s recent stock run-up will continue. Lazard Capital’s Colin Sebastian said the stats from year-end sales are impressive, but he reiterated a Hold rating on the shares. The stock is already factoring in market share gains over several years, improving operating profit margin, and free cash flow growth, said Sebastian.
According to our last prognosis in November, the median price of 23 sell-side and independent analysts was $180, below Tuesday’s opening price of $186.24. Of the 23 analysts, 16 were positive and seven neutral. None was negative.
Analysts continue to embrace Apple stocks as its products gain steady market share in both the personal computer and smartphone markets. The median 12-month price target from Alacra’s December prognosis is $375, and all 38 analysts tracked have a positive rating on the company.
Piper Jaffray analyst Gene Munster maintained an overweight rating for Apple’s stock Monday, as well as its 12-month price target of $438, more than $100 higher than Tuesday’s opening price of $332.50.
Shares of China’s largest search engine have seen a big run-up in 2010, but some analysts see the stock possibly retracting in 2011 after the firm’s executives said growth will taper down for the website. However, Goldman Sachs still maintained a Buy rating and $115 price target on Baidu last month.
In our last prognosis on Baidu, the median price based on the most recent 12-month targets of sell-side and independent analysts tracked by Alacra Pulse is $115, compared with Tuesday’s opening price of $100. Of 22 tracked analysts, 14 were positive, four were neutral and four negative.
Search giant Google remains a favorable pick among tech stocks and the median price target among analysts is at $670, according to our latest December prognosis on the firm. Google opened Tuesday at $605.62. Of 27 tracked analysts, 22 were positive, four neutral and one negative.
Citigroup Internet analyst Mark Mahaney wrote in a note to clients that Google is “arguably the broadest ‘Net play on ‘11 growth drivers,” adding that the stock is his favorite large-cap Internet pick for 2011.
Analysts worry that Microsoft continues to play catch up, especially in its fight against Apple. Microsoft’s stock has traded in the same range for a decade, and in our December prognosis, the median price based on the most recent targets tracked by Alacra Pulse stood at $32, compared with Tuesday’s opening of $27.92. Of 20 analysts tracked, 13 have a positive rating, seven are neutral and none is negative.
“By the time Microsoft gets it figured out everybody will already own an iPad,” said Keith Goddard, CEO of Capital Advisors, an investing firm in Tulsa, Oklahoma, that holds Apple shares. “That train has left the station,” Goddard said last week.
Piper Jaffray analysts reiterated an Overweight rating on shares of Netflix in a research note to clients and investors last week. The analysts currently have a $217 price target on the stock. Goldman Sachs initiated coverage on shares of Netflix and has set a Neutral rating and $200 price target on the stock. They said that the company could be hurt by incremental broadband prices.
In our last Netflix prognosis, out of 19 analysts tracked by Alacra Pulse, five have a positive rating on Netflix, six are negative and eight are neutral. The median target price is $155, significantly below the opening price Tuesday of $181.35.
Research In Motion (RIMM)
The BlackBerry maker is in fierce competition with rivals such as Apple and Google, but the Canadian company has seen stable growth in markets outside of North America in the past year. However, analyst views on the firm’s 12-month stock price continue to be mixed.
In our latest December prognosis, the median was $70, compared with Tuesday’s opening price of $59.39. Of 41 sell-side and independent analysts tracked by Alacra Pulse, 20 are positive on the company, eight are negative and the remaining 13 are neutral.
Kaufman Brothers analyst Shaw Wu said RIM’s new tablet PlayBook will ship at most only 1 million units this year: “It’ll be a modest seller, and the iPad will likely do 10 times as much,” said Wu, who cut his RIM rating to Hold in early November.
Yahoo did not have the best 2010, but S&P Equity Research Information Technology Analyst Scott Kessler predicts that in 2011, Yahoo will engage in at least one significant transaction, possibly the sale of its stake in Alibaba Group or an acquisition focused on the international, social media or mobile markets.
Hudson Square Research initiated the internet search company with a Buy. The median price target of sell-side and independent analysts tracked by Alacra Pulse stood at $18.00 in our latest prognosis, compared with Tuesday’s opening of $16.71. Of 24 tracked analysts, 13 were positive, 10 neutral and one negative.
(Source: Alacra Pulse, Apple Insider, Tech Trader Daily, San Francisco Chronicle, China Analyst, American Banking News, Street Insider, Media Post News, The Star, Yahoo Finance)