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: Cott (COT), Dean Foods (DF), Georgia Gulf (GGC), Nordstrom (JWN), Insight Enterprises (NSIT), Nuance Communications (NUAN), PolyOne (POL), and Papa John's International (PZZA).
The chart below shows new ratings, price targets, and buy/sell ranges vs. old ones:
Cott: Maintain at Buy, Increase PT from $9 to $10
We continue to see Cott as a solid value stock with its future PE at just 10, and we believe that the stock has some decent upside from here. The company is currently doing a solid share buyback right now that is going to continue to decrease the PE ratios. Further, we like the stock as a "lower income" play as they work with store brands to sell private label soda. With the current market downturn an uncertainty, we like COT to have some value appealing to consumers as they move to lower priced soda and beverages. The company has done well with margins, but they have a lot of inputs that are going to limit upside. We like the stock for value, but it's not a growth story
Dean Foods: Upgrade from Hold to Buy, Increase PT from $14 to $22
The last couple quarters have been very solid for Dean Foods as the company has seen a return in its milk business as well as WhiteWave-Alpro business. The company has reduced its costs and increased its expectations for the year, which caused us to increase our expectations. Margins have been improving very nicely, the company is growing nicely, and they have a solid future PE at 11.5. The company has done some great acquisitions, and we believe the stock is quite cheap right now but growing as well.
Georgia Gulf: Maintain at Hold, Decrease PT from $32 to $31
Georgia Gulf continues to look like a Hold right now. The company has pretty decent value right now, but it's also not in a very strong cyclical market in commodity chemicals. Right now, we think that the company is pretty fair valued.
Nordstrom: Maintain at Hold, Increase PT from $45 to $54
Nordstrom continues to look solid as one of the leaders in the apparel industry and department store industry. We have always been a fan of JWN for excellent customer service representation. Further, the luxury industry continues to be a great place to be invested as it continues to do well even during tough times. The company has priced in a lot of risk we believe at this time, and it should have a very strong second half of 2012. The company continues to report strong same-store sales, and we believe it will outperform all other department stores. Yet, we still believe it is not perfectly priced to be bought yet. We would buy on a bit more weakness.
Insight Enterprises: Upgrade from Hold to Buy, Increase PT from $19 to $28
Insight is a great value play right now. The company has a sub-$7 PE ratio, but it is a company that is growing at 10% in income, and we believe that it is very undervalued right now. The company is in the growing IT business, and we believe they are one of the best value plays out there right now.
Nuance Communications: Maintain at Sell, Increase PT from $15 to $16
We continue to believe NUAN is well overvalued at its current prices, and it is a good Sell candidate. While we like the company's product and believe it has a ton of value moving forward, we cannot justify a 133 PE ratio. The company has a much lower future PE ratio, but we believe that its growth is completely priced in at this point. If the company cannot maintain the expected 25%+ EPS growth moving forward, the stock will suffer considerably. We see better investments in more valuable growth positions.
PolyOne: Maintain at Buy, Decrease PT from $19 to $18
Not much change here. We slightly decreased our expectations based on weakening cyclicality, but the company has solid value right now.
Papa John's: Maintain at Buy, Increase PT from $48 to $64
Papa John's looks to be one of the best companies in the entire market right now. They have very solid global growth, and the latest quarter was very strong. We are expecting 10%+ growth in sales over the next two years in a rather low growth industry. The company is not a great value at a 16 future PE, but this stock is now a growth company. With the company's high growth in emerging markets, we foresee them continuing to move higher from here. We like investing here still, and we believe that the company will continue to see strong earnings and sales growth.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.