Our EquityAnalytics department is always updating price targets and ratings on companies that we cover based on new information. Our price targets and ratings are thoroughly researched and use financial analysis tools to determine stock prices. Today we are updating the following companies from our coverage: Ashland (ASH), DR Horton (DHI), Domino's Pizza (DPZ), Standard Pacific (SPF), and Westlake Chemical (WLK).
The chart below shows new ratings, price targets, and buy/sell ranges vs. old ones:
Ashland: Maintain at Hold, Increase PT From $72 to $76
Ashland put together another solid quarter in the chemicals industry, and we raised our estimates moving forward as the company continues to outperform in tough markets. We raised our expectations as margins continue to expand, and we believe that their lineup is less cyclical than others due to a large slates of products being consumer staples like Valvoline. The company, additionally, recently upped their quarterly dividend 29% to 22.5 cents, which is a positive move for the company as well. Overall, we like ASH a lot as a company that can continue to do well in comparison to others during tough times, and we would acquire shares on a break below $60.
DR Horton: Maintain at Buy, Increase PT from $17.50 to $21
We like homebuilders in 2012 as supplies are lower and prices are rising. The average sale price will help revenue, profits, and margins. The latest round of earnings for us looked very promising. The company saw their cancellation rate drop to 22% and saw new orders move up 19% YoY as well, both moving in the right direction. The nation's largest homebuilder is looking really solid and moving upwards faster than we expected.
Domino's Pizza: Upgrade from Hold to Buy, Increase PT from $37 to $42
We really like the global expansion success of DPZ, and we believe that they are in a solid growth cycle right now that will allow them to make a solid move up after some post-earnings weakness. A lot of traders/investors saw the earnings miss and revenue decline, but we believe these short-term hiccups are just that...short-term. The company has a really solid global growth model, will see input costs declining, and we believe that the company is a nice Buy on this recent dip. We increased our targets as we believe margins will move back upwards from here.
Standard Pacific: Downgrade from Hold to Sell, Increase PT from $3 to $4
Some better results from SPF have fueled our price target increase. Yet, the company is still very risky, and we do not see them as a solid investment.
Westlake Chemical: Maintain at Sell, Increase PT from $44 to $45
We still believe WLK is a solid Sell candidate as the company is still overvalued in our opinion. They have a decent business line with solid growth, but we believe that commodity chemical companies are going to go through a bit of price declining that will hurt their margins. They have decent revenue growth moving forward, but we are expecting more margin decline. We still see them having more downside risk from here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.