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Top Paper and Packaging Stock Picks for 2013 (DB, OI, IP, GLT, BERY, WPP)

Lee Jackson — Thu, 07 Feb 2013 15:10:51 +0000

While the paper and packaging industry might not seem quite as exciting as the glamorous world of high tech or high finance, it is often a closely watched sector by economists and market strategists at the big Wall St. firms. The reason is simple: solid earnings and growth at companies in the sector often mirror solid consumer and business growth. With consumer spending representing 70% of gross domestic product, this is a sector to keep an eye on.

Deutsche Bank A.G. (NYSE: DB) has issued a new research report noting that comments from timber and wood products companies have been surprisingly upbeat, while things are more checkered in paper and packaging. In nonpaper packaging, most of their coverage universe posted sluggish fourth-quarter results and softer-than-expected first quarter 2013 guidance. However, the analysts see stronger-than-expected 2013 free cash flow targets and the potential impact of targeted restructuring moves bolstering most packaging stocks. The top picks at Deutsche Bank for 2013 are as follows.

Owens-Illinois Inc. (NYSE: OI) manufactures and sells glass container products primarily in Europe, North America, South America and the Asia-Pacific. Deutsche Bank has a Buy rating with a price target of $28, which is the same as the Wall St. consensus target.

International Paper Co. (NYSE: IP) is the largest and most globally oriented North American paper company. Deutsche Bank’s price target of $50 compares to the consensus target of $48. International Paper also pays a 2.80% dividend.

P.H. Glatfelter Co. (NYSE: GLT) manufactures and sells specialty papers and fiber-based engineered materials in the United States and internationally. The Deutsche Bank price target on this buy-rated stock is $21, while the consensus estimate is in line at $21.50.

Berry Plastics Group Inc. (NYSE: BERY) engages in the manufacture and marketing of plastic consumer packaging and engineered materials in the United States, Canada, Mexico, Belgium, Australia, Germany, Brazil, Malaysia and India. Berry Plastics gets a Buy rating and a $21 price target. The Thomson/First Call estimate is essentially in line at $21.50.

Wausau Paper Corp. (NYSE: WPP) manufactures, converts and sells paper and paper products in the United States and internationally. The company operates in two segments, Tissue and Paper. The last Deutsche Bank top pick for 2013, this buy-rated stock has a $13 price target that is substantially higher than the consensus target of $10.50.

In an improving economy, investors looking to have some exposure to the paper and packaging sector have five solid names to choose from Deutsche Bank. While the sizzle may not be there, it looks like the profits may be.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Consumer Goods, Consumer Product, Economy Tagged: BERY, DB, featured, GLT, IP, OI, WPP

Small & Mid-Cap Stocks With 50% Upside In 2012 (OIS, OI, ROSE, WBC, CIE)

Jon C. Ogg — Wed, 28 Dec 2011 13:01:47 +0000

In December you get to see all sorts of predictions and stock picks from market pundits for the year ahead. This year is no different, and Credit Suisse has issued this month its list of Small Cap Stocking Stuffers. In the heart of the small-cap and mid-cap universe, called the SMID, Credit Suisse had ten new additions and the total group was twenty-four stocks. We pulled those with the most implied upside and the following had implied upside of close to 50% or more in the year ahead: Oil States International Inc. (NYSE: OIS); Owens-Illinois, Inc. (NYSE: OI); Rosetta Resources, Inc. (NASDAQ: ROSE); and WABCO Holdings Inc. (NYSE: WBC). Cobalt International Energy, Inc. (NYSE: CIE) is a “runner-up” only now because it has outperformed the market so much this month.

We have shown how Credit Suisse’s price targets compare to the consensus targets and shown price history as well to give investors a feel for what the price targets might imply. Other color has been added in if applicable.

Oil States International Inc. (NYSE: OIS) is in the Energy Equipment & Services sector. Credit Suisse’s Arun Jayaram has an Outperform rating on the stock and it has been on the top picks list since September under the growth category. Shares are trading at $75.00 and the $110.00 price target objective implies upside of almost 47%. Thomson Reuters has a $95.92 consensus price target on Oil States and Credit Suisse has the “street high” target. It should be worth noting that shares tanked in the summer sell-off and they have now recovered actually by about 50% since the September-October selling climax.

Owens-Illinois, Inc. (NYSE: OI) is in the Metal and Glass Containers sector and Credit Suisse’s Al Kabili has an Outperform rating and it is listed as a value stock. This stock was added to the top picks list in mid-December. At $18.65, there is an implied upside of almost 61% to the firm’s $30.00 price target. Interestingly enough, the consensus price target from Thomson Reuters is $28.11 and the highest target from other analysts is $32.00. It looks like there are still many bullish analysts here on this one outside of Credit Suisse. The summer sell-off was brutal here as shares were more than cut in half at the extreme point before recovering recently.

Rosetta Resources, Inc. (NASDAQ: ROSE) is in the Oil and Gas Exploration and Production segment. Credit Suisse’s Mark Lear has an Outperform rating and calls ita growth stock. At $44.00, there is an implied upside of 52% to the firm’s $67.00 price target. The Thomson Reuters consensus price target is $58.64 and the year high is $58.04. There are some other analysts with far higher expectations as there is one price target as high as $82.00 on the stock. This one has been an aggressive earnings growth name and that is expected to remain in 2012.

WABCO Holdings Inc. (NYSE: WBC) is into braking, stability, suspension, and transmission control systems primarily for commercial vehicles. Credit Suisse’s Peter Chang has an Outperform rating on Wabco as a growth stock. The $43.00 share price today leaves an implied 53% upside to the firm’s $66.00 price target. This one has been very volatile as the 52-week range is $34.17 to $75.00. Credit Suisse is only a tad more bullish than the consensus as Thomson Reuters has a median price target of $63.71 and the highest analyst price target is $71.00.

Cobalt International Energy, Inc. (NYSE: CIE) is now just a “runner-up” in the Oil and Gas Exploration and Production segment and Credit Suisse’s Edward Westlake has an Outperform rating. This one was added as a fresh addition to the top picks list in December, but investors have effectively missed this one. It had 50% implied upside to the $17.00 price target at the time, but now shares have risen to $15.98. If it matters, Thomson Reuters has a higher consensus price target of $18.40 on the stock.

JON C. OGG

Filed under: Analyst Calls, Oil & Gas, Value Investing Tagged: CIE, OI, OIS, ROSE, WBC

S&P Slashes Europe GDP Targets, Still No Double Dip Recession (CAT, FLS, PCAR, OI, PLL, ADBE, LXK, F, GM, PM, CCE, MCD, YUM)

Jon C. Ogg — Tue, 30 Aug 2011 12:00:07 +0000

Europe posted anemic GDP growth in the second quarter of 2011, but the continent can still avoid a double-dip recession if European governments could solve a few problems. First is high unemployment which is having a direct effect on consumer spending. Second, converting the accommodative monetary policies of European banks into the real economy.

These are the conclusions of a new report from Standard and Poor’s in which the agency lowers Europe’s GDP growth forecasts for the rest of 2011 and all of 2012. What does this slowdown mean for US companies that do significant business in Europe?

S&P sees demand for European goods continuing to grow in emerging markets, but that’s not much help for US industries’ European sales. But European capital spending is increasing slightly, which should continue to be good news for Caterpillar Corp. (NYSE: CAT), which generated 26% of its total revenues last quarter in Europe, at a year-over-year growth rate of 53%, the highest of all the company’s geographic regions. Other industrial manufacturers like Flowserve Corp. (NYSE: FLS), Paccar Inc. (NASDAQ: PCAR), Owens-Illinois Inc. (NYSE: OI), and Pall Corp. (NYSE: PLL), all of which do more than 40% of their business in Europe, could also benefit from increased capital spending.

Technology companies like Adobe Systems Inc. (NASDAQ: ADBE), which does about 33% of its business in Europe, and Lexmark International Inc. (NYSE: LXK), with 36% of its business in Europe, have not had a lot of success in Europe recently and increased capital spending may not help tech companies very much..

Consumer-oriented companies like automakers Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) and tobacco company Philip Morris International (NYSE: PM) have experienced sales declines. The European “cash for clunkers” programs finally expired last quarter and that has put a damper on new car sales.

Some consumer products are doing fine, however. Coca-Cola Enterprises (NYSE: CCE) does about 60% of its business in Europe and it reports good sales growth. But a bottle of Coke is a lot cheaper than even a Ford Escort.

Fast-food leader McDonald’s Corp. (NYSE: MCD) got 22% of its revenue from its European region last quarter. Comparable store sales for the quarter were up 5.2% year-over-year. Yum! Brands Inc. (NYSE: YUM) is more focused on building its operations in China, but sales in its international division, which includes Europe, grew 6% in the second quarter, with same-store sales up 2%.

S&P expects a “rather more gloomy outlook emerging for consumer demand” in the UK than in the rest of Europe. Like their American cousins, citizens of the UK are more highly leveraged than Eurozone citizens. The UK is deleveraging, which, in turn, causes spending on consumer goods to fall. High unemployment and government austerity moves don’t really help the situation.

S&P now expects German GDP to grow at 2% in 2012, down from a forecast of 2.5% in July. Growth in France is now forecast at 1.7%, compared with 1.9% for 2012 just a month ago. The GDP growth forecast for Spain has been cut from 1.5% to 1%, and the UK forecast for 2012 from 2% to 1.8%.

Even if the S&P forecasts turn out to be on target, GDP growth in Europe will be about the same as forecast for the US. That’s not a particularly bright picture for the next 18 months. The only consolation is that it could be worse.

Paul Ausick

Filed under: Analyst Calls, Economy, International Markets, Regulation, Research Tagged: ADBE, CAT, CCE, F, FLS, GM, LXK, MCD, OI, PCAR, PLL, PM, YUM

Week’s Biggest Losers: Owen-Illinois And Nine More

Douglas A. McIntyre — Sat, 18 Jun 2011 14:43:41 +0000

Owens-Illinois (NYSE: OI) sold down 15% last week as Venezuela seized some of the company’s assets in that country. Later in the week, Morningstar said the sell-off was overdone.

Cognizant Technology Solutions (NASDAQ: CTHS) dropped 10.2% for the week after the firm disclosed poor earnings.

Shares of JDS Uniphase ((NASDAQ: JDSU) dropped 7.7% after direct competitor Finistar (NYSE: FNSR) disclosed earnings for its last quarter which were below Wall St. expectations

Moody’s (NYSE: MCO) fell 7.1% because of concerns the government will charge the company for its actions related to the credit crisis.

DDouglas A. McIntyre

S&P 500 WEEK: BOTTOM 10 (10 JUN – 16 JUN)	Ticker	Weekly Price Change (%)	Close Price 16Jun11	Close Price 10Jun11	Market Cap ($Mil)
Owens-Illinois Inc.	OI	-15.0	25.07	29.51	4111.6
Cognizant Technology Solutions Corp	CTSH	-10.2	65.54	73.00	19940.5
JDS Uniphase Corp	JDSU	-7.7	15.57	16.86	3534.1
Alpha Natural Resources Inc	ANR	-7.4	42.30	45.69	5112.7
Moody’s Corp.	MCO	-7.1	38.27	41.18	8717.9
Micron Technology Inc.	MU	-6.8	7.87	8.44	7876.6
CF Industries Holdings Inc	CF	-6.7	142.39	152.56	10178.5
Priceline.Com Inc	PCLN	-6.4	461.71	493.18	22922.5
Newfield Exploration Co	NFX	-6.0	63.74	67.81	8571.4
CONSOL Energy Inc.	CNX	-6.0	45.90	48.83	10402.7
Source: Capital IQ

Filed under: Analyst Calls, General, Research Tagged: ANR, CF, CTSH, JDSU, MCO, MU, OI, PCLN

Top Analyst Upgrades & Downgrades (AA, BRK-B, CCL, CPRT, DD, XOM, GSIC, HCBK, MAR, OI, DGX, TRV, TNK, UTI, WAG, XL)

Jon C. Ogg — Tue, 29 Mar 2011 12:22:57 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Tuesday morning.

Alcoa Inc. (NYSE: AA) Reiterated Buy at Argus.
Berkshire Hathaway Inc. (NYSE: BRK-B) named as Bull of the Day with Outperform rating at Zacks.
Carnival Corp. (NYSE: CCL) Reiterated Hold at Argus.
Copart, Inc. (NASDAQ: CPRT) Started as Buy at BofA/ML.
DuPont (NYSE: DD) Reiterated Buy and raised $62 target at BofA/ML.
Exxon Mobil Corporation (NYSE: XOM) Reiterated Buy with $100 target at Argus.
GSI Commerce, Inc. (NASDAQ: GSIC) removed from coverage at BofA/ML.
Hudson City Bancorp, Inc. (NASDAQ: HCBK) Raised to Neutral at BofA/ML.
Marriott International (NYSE: MAR) Raised to Outperform at Wells Fargo.
Owens-Illinois, Inc. (NYSE: OI) Raised to Outperform with $36 target at Credit Suisse.
Quest Diagnostics Inc. (NYSE: DGX) Raised to Outperform with $65 target at Credit Suisse.
The Travelers Companies, Inc. (NYSE: TRV) Cut to Sell at Goldman Sachs.
Teekay Tankers Ltd. (NYSE: TNK) Raised to Buy at BofA/ML.
Universal Technical Institute (NYSE: UTI) Maintained Underperform as Bear of the Day at Zacks.
Walgreen Co. (NYSE: WAG) Raised to Outperform with $36 target at Credit Suisse.
XL Group plc (NYSE: XL) Raised to Buy at Goldman Sachs.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Analyst Calls Tagged: AA, BRK-B, CCL, CPRT, DD, DGX, GSIC, HCBK, MAR, OI, TNK, TRV, UTI, WAG, XL, XOM

Top Analyst Upgrades & Downgrades (CERN, CNQR, RDY, ETN, GCA, HGSI, LLTC, OI, POM, SWI, WFC, XLNX)

Jon C. Ogg — Thu, 22 Jul 2010 12:37:41 +0000

These are some of the top analyst upgrades and downgrades seen in Wall Street research calls this Thursday morning:

Cerner Corp. (NASDAQ: CERN) Raised to Buy at Jefferies.
Concur Technologies (NASDAQ: CNQR) Raised to Buy at Jefferies.
Dr Reddy’s (NYSE: RDY) Cut to Equal-weight at Morgan Stanley
Eaton Corp (NYSE: ETN) Raised to Outperform at Wells Fargo.
Global Cash Access Holdings (NYSE: GCA) Cut to Neutral at Sterne Agee.
Human Genome Sciences (NASDAQ: HGSI) Raised to Outperform at Baird.
Linear Technology Corp. (NASDAQ: LLTC) Reiterated Buy but Raised target to $40 at Gleacher.
Owens-Illinois (NYSE: OI) Cut to Neutral at Goldman Sachs.
Pepco Holdings (NYSE: POM) Raised to Neutral at JPMorgan.
SolarWinds (NYSE: SWI) Cut to Hold at Needham; Cut to Hold at Jefferies; Goldman Sachs cut to Neutral.
Wells Fargo & Co. (NYSE: WFC) Raised to Outperform at FBR.
Xilinx (NASDAQ: XLNX) Reiterated Buy and Raised target to $33 at Gleacher.

JON C. OGG

Filed under: Analyst Calls Tagged: CERN, CNQR, ETN, GCA, HGSI, LLTC, OI, POM, RDY, SWI, WFC, XLNX

The 52-Week Low Club 9/10/2008 (WM)(LEH)(O)(SIRI)

Douglas A. McIntyre — Wed, 10 Sep 2008 15:03:31 +0000

Washington Mutual (WM) Latest victim of credit debacle. Falls to $2.30 from 52-week high of $39.25.

Lehman (LEH) Restructuring plan has few friends. Down to $6.93 from 52-week high of $67.73.

Owens-Illinois (OI) Closed two plants. Drops to $33.91 from 52-week high of $60.60.

Sirius XM Radio (SIRI) Market does not like forecast of slowing growth. Drops to $.90 from 52-week high of $3.94

Douglas A. McIntyre

Top 10 Pre-Market Analyst Calls (ADBL, GOOG, LOW, MXIM, MEDX, MS, MOT, OI, TIVO, DIS)

Douglas A. McIntyre — Fri, 01 Feb 2008 07:43:37 +0000

Below are ten of the top analysts calls that247WallSt.com is looking at this morning:

Audible (NASDAQ: ADBL) downgraded to Hold from Buy at Citigroup.
Google (NASDAQ: GOOG) downgraded to Hold from Buy at Jefferies.
Lowe’s (NYSE: LOW) downgraded to Hold from Buy at Citigroup.
Maxim Integrated (NASDAQ: MXIM) downgraded to Hold from Buy at Jefferies.
Medarex (NASDAQ: MEDX) raised to Neutral from Sell at Banc of America.
Morgan Stanley (NYSE: MS) downgraded to Neutral from Buy at Goldman Sachs.
Motorola (NYSE: MOT) raised to Buy at Citigroup.
Owens-Illinois (NYSEO: OI) raised to Buy from Hold at Deutsche Bank.
TiVo (NASDAQ: TIVO) downgraded to Underperform from Market Perform at FBR.
Walt Disney (NYSE: DIS) raised to Outperform from Market Perform at Oppenheimer.

Jon C. Ogg
February 1, 2008

Pre-Market Stock News (June 11, 2007)

Douglas A. McIntyre — Mon, 11 Jun 2007 06:48:10 +0000

(ADLR) Adolor said a complete response to the POI ‘Approvable’ Letter now targeted for 3Q 2007.
(ALXN) Alexion Pharm says studies show efficacy and safety of it’s Soliris in broad population of PNH patients in Phase III studies examining Soliris for the treatment of paroxysmal nocturnal hemoglobinuria.
(BYBI) Backyard Burgers agrees to be acquired for $6.50 cash per share.
(CHINA) CDC Corp making a gaming company acquisition.
(CSGS) CSG Systems is paying $23.5M cash to acquire private ComTec.
(CUP) Peru Copper gets a friendly takeover offer from Aluminum of China.
(EME) EMCOR raised guidance and announced a 2-1 stock split.
(ENDO) Endo pharmaceuticals’ FROVA Phase III study data showed short-term prevention treatment reduces frequency and severity of menstrual migraine.
(ERIC) Ericsson in GSM expansion pact with China Mobile.
(GERN) Geron says research indicates its embryonic stem cell based therapy for spinal cord injury evades direct attack response by the human immune system.
(GOOG) Google announced search and ad pact with Sina in China.
(GOL) Gol Intelligent Airlines said Continental will sell its tickets for travel to Brazil and South America.
(IBM) IBM paying close to $750 million to acquire Telogic AB in Sweden.
(IMCL) Imclone said FDA accepted and granted priority review of ERBITUX sBLA for overall survival in patients with advanced colorectal cancer.
(JOSB) Jos. A. Bank $0.45 EPS vs $0.42e.
(MDVN) Medivation’s Dimebon maintains statistically significant benefit on all five efficacy endpoints in Alzheimer’s disease after one year of therapy
(NGA) North American Galvanizing trades ex-split to reflect a 3-2 stock split.
(NRMX) Neurochem presents update on Alzhemed, but said that no predictions or conclusions can yet be made regarding the outcome of the Phase III study.
(OI) Owen-Illinois is selling its plastics unit to rexam for $1.8 Billion.
(OSUR) OraSure received a CE mark of approval from the EU for its OraQuick rapid HIV test.
(PRGS) Progress Software added one of the Dow Jones news feeds to its algorithmic trading platform.
(PRW) Pro-Pharmaceutical submits data to begin a 505B2 filing with FDA for new formulation of Irinotecan for potential cancer treatment indications.
(RIMG) Rimage announced a $6.5M order from new major national retail customer.
(SINA) Sina in strategic search and ad partnership with Google in China.
(TRLG) True Religion CEO reduced holdings of 2.3 million shares in a private placement.

Jon C. Ogg
June 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.