Review Of Analyst Upgrades This Week - Part I

by: The Value Investor

Analysts have been sending out their research reports to their clients again this week. In the following, a review of the most important upgrades of the week of April 9 - 13.

Alpha Natural Resources

Nomura raised its advice for Alpha Natural Resources (ANR) from hold to buy with a target price of $20, indicating that there is 28% upside for the supplier and exporter of metallurgical coal. Shares have fallen almost 80% since the beginning of 2011 amidst a decline in coal prices. Helped by the news that its commercial officer will become the new president of the company and the upgrade, shares ended the week 10% higher.

Johnson Controls

Deutsche Bank raised its advice for Johnson Controls (JCI) from hold to buy with a target price of $39. According to the bank, the provider of automotive interiors has 20% upside which would bring shares back to the levels at which the company traded during the first half of 2011. The bank believes that investors have become too bearish and it is more confident in the prospect for double digit earnings growth in the near term. Shares ended the week 2.7% higher.

Acme Packet

Barclays Capital raised its advice for Acme Packet (APKT) from equalweight to overweight with a target price of $33. The UK bank believes there is 20% upside for the provider of network solutions. Shares in Acme have seen a strong correction, trading as high as $80 this time last year. The analyst upgrade provided a boost to the stock which closed the week 3.8% higher.

Apollo Investment Corporation

Barclays Capital furthermore raised its advice for Apollo Investment (AINV) from equalweight to overweight with a target price of $9. The closed-end business development company has seen steady long term declines in its share price, but Barclays believe there is 26% upside left remaining. While the upgrade gave a boost to Apollo's share price on Thursday, it still ended the week 2% lower.

HEICO corporation

RBC Capital Markets raised its advice for HEICO (HEI) from neutral to outperform with a target price of $62. Shares of the jet engine manufacturer have seen a steady long term upward trend prompting the company to announce a 5 for 4 stock split two times in recent years. Shares ended the week flat but analysts see 24% upside potential left.


Despite a correction in the general stock market analysts see plenty of upside potential in some names. The five names discussed above returned on average 3% on the week, a 5% outperformance to the general market which fell 2%. Furthermore analysts think there is on average 24% more room towards the upside before shares trade at fair value. Irrespective of the long term value of analyst recommendations they can surely move stocks on the day of the announcement and days thereafter.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.