Review Of Analyst Upgrades This Week - Part X

Includes: A, ASNA, AVGO, BX, JNJ, UNH, WWD
by: The Value Investor

Analysts have been sending out their research reports to their clients again this week. The following is a review of the most important upgrades for the week of June 11th till June 15th.

Blackstone Group

Barclays Capital raised its advice for Blackstone Group (BX) from equalweight to overweight with a $15 price target. Analysts think that the overall industry is well-positioned for growth and the cycle is heading upwards. Shares have some 20% upside potential from their current levels after having seen a correction of 10% so far this year. Recently the Blackstone Group announced the $1.9 billion acquisition of Motel 6 from Accor.

Ascena Retail Group

FBR Capital Markets raised its advice for Ascena Retail Group (ASNA) from market perform to outperform with a $23 price target. Shares have some 17% upside according to analysts. Ascena announced this week that it completed the acquisition of Charming Shoppes in a deal valuing the women's apparel retailer for approximately $900 million. Despite a sizable 15% correction in recent weeks, shares are still up 30% so far this year.


KeyBanc Capital Markets initiated its advice for Woodward (WWD) with a buy rating and a $45 price target. Analysts see some 20% upside potential for the manufacturer of energy control and optimization solutions. The company offers "a unique play on two compelling, late secular growth markets - commercial aerospace and energy." The company is ideally situated to monetize its offerings for energy control, optimization and efficiency according to KeyBanc. Shares have fallen 8% year to date as investors are worried about a global economic slowdown.

Agilent Technologies

Citigroup initiated Agilent Technologies (A) with a buy rating and a price target of $46. Analysts see 15% upside potential for the company's shares as it sees 5-6% revenue growth through 2014 and EPS growth of 10-11%. The shifting focus towards life science and increasing emerging market exposure combined with margin expansion opportunities will most likely lead to an outperformance of the stock. Shares are up 14% so far this year as investors applaud the acquisition-based strategy of the company.


JP Morgan rates UnitedHealth (UNH) at new overweight accompanied with a $72 price target. Analysts see almost 25% upside potential for the healthcare company. Despite uncertainty caused by the 2014 Healthcare Reform implementations and complicating factors of the imminent Supreme Court ruling and the November elections, analysts still find shares attractive. Momentum in the company's Health Benefits segment and confidence of earnings in the Optum business should provide investors with an interesting opportunity. Shares in UnitedHealth are up 16% so far this year.

Johnson & Johnson

JP Morgan upgraded Johnson & Johnson (JNJ) from neutral to overweight with a $74 price target. Analysts of the bank see 13% upside for the company as they note that the company's valuation vs. the sum of the parts valuation has eroded from a 27% premium to a 5% discount. Furthermore shares in the company have lagged those of competitors while offering an annual dividend yield of 3.7% at the moment. Shares of Johnson & Johnson have gained 5% over the past week, now trading flat for the year.

Wedbush rates Broadcom (BRCM) as a new outperform with a price target of $40. Analysts see almost 20% upside for the shares amidst continued market share leadership in connectivity combo solutions, market share gains in baseband and organic growth in broadband communications. Furthermore the company has a very solid financial position according to the analysts. In the quarter ending in March 2012, the company held approximately $1.7 billion in cash and equivalents. Shares in Broadcom have returned about 17% so far this year.


Stock markets have seen a strong correction this week, closing about 1.3% higher in the case of the S&P 500. Amidst optimism about a solution for Greece, brokers have sent out favorable research reports again to clients. Many of the recommendations were made after the release of earnings reports and often come after a large move to the upside. However on the day of the announcement, analyst recommendations can still move the stock price significantly.

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

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