Price Target And Ratings Updates: Chipotle, Yum, Cree And More

by: David Ristau

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: Albemarle (NYSE:ALB), Chipotle Mexican Grill (NYSE:CMG), Cree (NASDAQ:CREE), DuPont (DD), and Yum! Brands (NYSE:YUM).

The chart below shows new ratings, price targets, and buy/sell ranges vs. old ones:

Unknown ObjectAlbemarle: Maintain at Hold, Increase PT From $57 to $60

Albemarle put together another good quarter, and we upped our price target for the next 12 months slightly to $60. Yet, we see the company as fairly valued at this time. The company increased profits despite decreasing revenue, which was great to see - improving margins despite tough market conditions. At the same time, however, we worry about the cyclical nature of the chemicals industry and believe that the company's upside is limited due to this moving forward this year. There is some uncertainty surrounding the industry, and we believe we have priced in the proper levels of growth for the company.

Chipotle Mexican Grill: Maintain at Hold, Increase PT from $445 to $500

We upped our targets for Chipotle after another stellar quarter from the company. The margins improved for the company YoY as its operating margins improved to 16%. The company continues to impress us with its comps and ability to deal with inflating inputs. The company has been able to pass on costs well to customers. We also decreased our discount rate as beta came down, and the company's balance sheet has improved exceptionally. We look for it to continue higher about 20% in the next 12 months.

Cree: Upgrade from Hold to Sell, Increase PT from $23 to $27

Cree is looking better right now with improving fundamentals. The company's margins improved despite tough market conditions and it seems to suggest that the company has the ability to do well when the industry starts to pick up cyclically. LED lighting is still looking weak for now, though, and we think that the company is not a Buy at this time until the industry improves. Guidance was weak, but it was closer in line with our expectations. The PT was improved by better cash, more depreciation, and better trends that should happen in 2013-2014.

DuPont: Maintain at Hold, Increase PT from $54 to $58

We increased the price target on DuPont after the latest earnings. While the expectations actually came in lower than we expected, we did improve our price target as we extended our PT with income projections through 2015. The company is fairly valued right now. DuPont has some value right now. CapEx was a bit high for the year, but the company has some improving trends.

Yum! Brands: Maintain at Hold, Increase PT from $63 to $71

Yum! Brands had some really solid earnings and saw some very solid growth in operating margins in the latest quarter that we were not expecting. We improved our expectations for the company quite significantly. China is looking solid and even the American markets are improving. Further, the company looks like the Indian business is going to start improving and growing over the next few years. Right now, we think the stock is fair valued, and a lot of the upside is priced into the stock. At the same time, we do see potential in Yum!, and we believe it's a great pickup on any weakness whatsoever.


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