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These reports, excerpted and edited by Barron’s, were recently published by investment and research firms. The reports are a sample of the analysts’ thinking; they should not be considered Barron’s opinions or recommendations. Some of the issuers of the reports have provided, or expect to provide, investment banking or other services to the companies analyzed.
Kenvue
KVUE-NYSE
Overweight • Price $26.30 on May 26
by JP Morgan
We launch Kenvue coverage with an overweight rating and a December 2023 price target of $29. As the largest pure-play consumer health company in the world after its separation from parent company Johnson & Johnson, Kenvue is uniquely positioned to benefit from consumer megatrends (personal care, aging).
We expect Kenvue to deliver resilient growth in large addressable markets, with iconic brands that form strong bonds with consumers from birth across a portfolio spanning colds, flu, pain, allergies and over-the-counter medications. to quit smoking, skin care, mouthwashes. , baby care and wound care, among others.
As a stand-alone company, we believe Kenvue’s board and management will be more focused and accountable for the growth and profitability of the business after the separation that began in 2019, with significant opportunities devolution.
At our price target of $29 in December 2023, Kenvue will be valued at 16 times enterprise value over estimated 2024 Ebitda, which is roughly where overweight-rated Colgate-Palmolive , is trading for 2023 estimated.
C3.ai
AI-NYSE
Outperformance • Price $40.01 on June 1
by Wedbush
We upgrade C3 from Neutral to Outperform and raise our price target to $50 from $24.
Although it’s a bumpy road, we believe C3 has turned a corner and is now poised to capitalize on the $800 billion AI transformation opportunity over the next decade, with cases of increasing usage at all levels and the company in a unique position. to help lead the charge and monetize this in the next 12-18 months.
C3.ai posted strong results in the fourth quarter with both higher and lower results. As the company targets positive cash and non-GAAP profitability by fiscal year 2024, we believe this quarter was another major step in the right direction.
CSX
CSX-Nasdaq
Buy • Price $30.67 on May 31
by UBS
We upgrade CSX[la compagnie de chemin de fer]from Neutral to Buy. Our analysis of interest rate changes, ISM new orders and industrial production point to a weakening and possible bottoming in industry-related volumes in Q2 2024 or Q3 2024. quarter2024orthird-quarter2024 [therailroadcompany}fromNeutraltoBuyOuranalysisofinterestratechangesISMnewordersandindustrialproductionpointtoweakeningandaneventualbottominginindustrial-relatedvolumesinsecond-quarter2024orthird-quarter2024
However, with intermodal volumes likely hitting a year-over-year low in the second quarter, we expect a volume growth path for CSX in 2024, with 4% intermodal growth offsetting a 1% decline in commodities.
CSX also achieved the most significant improvement in manifest train speed (30% year over year) of any rail, which positions CSX to capture truck share. With rail stocks typically bottoming several months before volumes bottom out and with the CSX trading at just 15x our estimated 2024 earnings per share, we believe this is now an attractive entry point ahead of a potential volume inflection in 2024.
Price target: $37.
Grill
TOST-NYSE
Buy • Price $20.97 on June 1
by BofA Global Research
We’re kicking off coverage of leading restaurant technology provider Toast with a Buy rating and a price target of $26. Our audits at the National Restaurant Association conference last week showed that Toast provides the best cloud-native point-of-sale software/hardware technology to the restaurant industry. Beyond the point of sale, the innovative Toast platform integrates payment processing, restaurant operations, digital ordering and delivery, team and table management, payroll, loans and reporting/analytics .
Adjusted EBITDA margins have steadily improved over the past five quarters, and Toast forecasts positive Adjusted EBITDA for the second half of 2023. Free cash flow is also expected to turn positive later this year.
Ryanair Holdings
RYAAY-Nasdaq
Solid • Purchase price of $106.39 on June 1
by Raymond James
We are raising our earnings forecast following Ryanair’s Q4 2023 fiscal report and investor meetings we held last week, primarily reflecting a stronger pricing environment and weaker fuel forecast, partly offset by the discounted fuel hedge position and greater pressure on non-fuel unit costs.
Despite embedding characteristic conservatism in its FY2024 outlook, near-term trends remain constructive, and the recently announced MAX-10 order, combined with an increased likelihood of industry consolidation in Europe, is bodes well for Ryanair’s longer-term prospects, given its cost and balance. balance sheet (net cash) advantage over peers.
We continue to believe that Ryanair is well positioned to take advantage of strengthening demand in the region and has a unique advantage to avoid potential shocks in the sector as its peers grapple with higher indebtedness and cost pressures.
Target price: $128.
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