- The Grade
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- 7th October 2024
7th October 2024
Nick Barber
October 07, 2024
💬 ”Invest for the long haul. Don’t get too greedy and don’t get too scared.” Shelby M.C. Davis
ANALYST STOCK TIPS
Sphere, Salesforce and aTyr get bullish calls.
aTyr Pharma was given an Overweight rating by Wells Fargo. The price target was $17, an upside of over 700%! The rating was driven by optimism surrounding efzofitimod, the company’s lead drug for pulmonary sarcoidosis. The analyst believes the drug's chances of success in its Phase 3 trial are higher than investors expect. With a de-risked mechanism of action, the stock's risk/reward profile is viewed as highly favorable, potentially leading to significant gains ahead of the Q3 data release and up to 20x returns if the trial results are positive.
Innotiv, a preclinical research company, was upgraded to Buy by Lake Street, raising the price target to $4 (an upside of 109%). This change follows improvements in the company's liquidity due to a new debt facility and reworked covenants. The firm expects recovery in the non-human primate (NHP) segment next quarter, which could boost estimates. With expectations at a low, Lake Street believes any positive developments could lead to significant stock gains.
Par Pacific, a Houston-based oil and gas exploration company, was upgraded to Buy by JPMorgan. The price target was $30, representing a 59% upside. The firm believes there has been an “over-correction” in the stock’s price, which has declined over 50% year-to-date. The drop reflects Par Pacific's exposure to Asia cracks and distillates, but JPMorgan now sees the valuation as highly attractive. Additionally, strong capture rates in Hawaii are expected to continue, contributing to the positive outlook.
Thryv Holdings got a Buy rating from Craig-Hallum. The price target was $25 (a 49% upside). While some view Thryv as a declining Yellow Pages business with concerns over debt, the firm sees a growth opportunity in its SaaS segment. Thryv’s software-as-a-service division has shown over 20% growth with expanding margins, driven by cross-selling to its existing small business clients. Around 100,000 clients have already transitioned to Thryv’s integrated SaaS solutions, demonstrating strong potential beyond its legacy print business.
Dine Brands, the company behind Applebee’s and IHOP, was upgraded by Wedbush to Outperform, raising the price target to $47 (a 50% upside). The upgrade is based on the belief that the company’s current sales challenges are already well-known and factored into its low stock valuation. Wedbush sees this "depressed valuation" as an opportunity, indicating that the stock has the potential to recover as the company works through its challenges.
Salesforce was upgraded by Northland Capital Markets due to the launch of its Agentforce platform, which enables AI-driven sales, service, marketing, and commerce workflows without coding. Its pricing model, at $2 per conversation, is expected to expand the total addressable market (TAM) from $0.8 trillion to $3.2 trillion. The price target was $400, a 39% upside.
“We believe CRM is well positioned to capitalize on the more than 4x in software TAM we expect GenAI will drive”
Meta was given a Buy rating by Pivotal Research. The firm expects strong revenue growth driven by increased user engagement, new product launches, improved ad targeting, and higher prices. Additionally, cost efficiencies and a future reduction in losses from Reality Labs support the positive outlook. The price target was $780, a 31% upside.
Sphere Entertainment was upgraded to Outperform by Wolfe research. The firm believes the Las Vegas Sphere, one year after its opening, offers over 20% Return on Invested Capital for future developers of similar venues. Wolfe sees significant growth potential in expanding Sphere’s content and experiences, particularly benefiting Las Vegas and future developers. Additionally, the firm notes that the current stock price doesn’t fully reflect this expansion upside, making the stock more attractive. The price target was $60, a 33% upside.
INDUSTRY FOCUS
Questor says buy Pantheon Infrastructure.
The Telegraph’s Questor, a stock tips column that has been running for 6 decades, is recommending Pantheon Infrastructure as a buy. It thinks the investment fund, which focuses on essential infrastructure projects, is compelling for several reasons:
Discount to Net Asset Value (NAV): The fund's shares are trading at a 20% discount to their NAV, meaning investors are able to purchase £1 of assets for just 83p. This kind of discount is seen as an anomaly, especially given the fund's solid performance.
Strong Performance: The fund has reported a 7.5% rise in shares in the past week, with a 21% increase over six months. This suggests a recovery in investor confidence and performance, driven by strong interim results.
Defensive Assets: Pantheon Infrastructure has a diversified portfolio focused on essential services like digital infrastructure, power, renewables, and transport. These sectors are seen as defensive, providing resilience in economic downturns due to their long-term contracts and blue-chip client base.
Inflation Protection: Much of the fund's income is linked to inflation, offering a hedge against rising prices, which makes it more appealing in uncertain economic environments.
High-Quality Partnerships: Pantheon invests alongside major players like Kohlberg Kravis Roberts, gaining exposure to high-value sectors like data centres and renewable energy, which are in high demand due to trends like AI and cloud computing.
Improving Market Conditions: With falling interest rates and anticipated reforms in investment company charge disclosures, the broader infrastructure sector is expected to recover, positioning Pantheon well for future growth.
EXTRA GRADE
