Investing

8 Fresh Analyst Picks Called to Rise 50% to 100%

CIT Group Inc. (NYSE: CIT) may have said that John Thain would retire as CEO, but the lender was given some key upside based upon its value and opportunities ahead. CIT was raised to Outperform from Neutral at Macquarie on Thursday, and the firm’s price target of $65.00 compares to a prior close of $39.88 before the call and a close of $45.76 on Friday.

This was well over 50% upside when the call was made, and is now close to 50% after such a strong rally. CIT has a consensus target closer to $52.00 and a 52-week range of $39.18 to $49.98.

Clean Diesel Technologies Inc. (NASDAQ: CDTI) was started as Buy at Rodman & Renshaw and H.C. Wainwright on Tuesday, and the firms both reportedly assigned $3.00 price targets. The long and short of the matter was that this implied upside of roughly 80% from the prior $1.61 close, and the analyst calls were largely overlooked by the investment community when made.

Clean Diesel may have suffered from its name having “Diesel” in its title. The company has a 52-week range of $1.45 to $3.97. This was almost $2.00 just a month ago. Shares closed at $1.67 on Friday, even after news that it named a new CEO.

DepoMed Inc. (NASDAQ: DEPO) was reinstated as Buy at Janney Capital Markets on Tuesday. The firm issued a fair value estimate of $35.00 at the time, versus a prior close of $20.60 and versus a $16.94 share price as of Friday’s close. The $14.00 to $33.74 range of the last 52-weeks, and the sell-off this week, is a result of drug pricing coming under fire now.

Janney said that rising prescription growth for Nucynta and an improved formulary status are drivers for DepoMed as well: The buyout offer from Horizon Pharma has taken market focus off improvements in the underlying fundamentals for the business. Prescription data points to solid Nucynta relaunch and we have found evidence for positive changes in formulary status for key products in 2016.

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GoDaddy Inc. (NYSE: GDDY) was given upside of nearly 50% late in the week after the website hosting giant was started with a Buy rating and was assigned a $40.00 price target at UBS. GoDaddy’s prior close was $26.86 and it had a consensus price target of $33.00 at the time. Despite a $4.4 billion market cap, GoDaddy has a consensus estimate for a loss of -$0.82 EPS in 2015 and is expected to earn a mere $0.01 in EPS in 2016.

After closing at $28.17 on Friday, that 50% threshold is going to be only available on pullbacks and GoDaddy has a post-IPO range of $20.00 to $33.00. Investors need to keep in mind here that UBS put its price target  $4.00 higher than the prior street-high analyst price target of $36.00.

Pandora Media Inc. (NYSE: P) was absolutely gutted after a weak earnings reaction took more than one-third out of the stock. Pandora closed down 35% at $12.39 versus a prior 52-week range of $13.30 to $22.60. Most analysts were more than cautious here with downgrades seen from Oppenheimer, Pacific Crest, RBC, Piper Jaffray, and so on.

Canaccord Genuity was the outlier here, maintaining its Buy rating but with a lower target price of $24 from $26 for Pandora. Its report does acknowledge the setbacks and admitted to it challenge some of its bullishness. Still, they are more inclined to buy the stock on the weakness than to sell. Again, they were the outlier here.

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Windstream Holdings, Inc. (NASDAQ: WIN) is one of the telecom and communications mega-dividend yield stocks that is harder to evaluate on a dividend versus earnings basis. That is why the analyst community is so mixed. Still, a data center sale earlier this week brought out a “refresh view” from the BofA Merrill Lynch analyst team — with a sum-of-the-parts analysis (rather than cash flow or earnings analysis) generating a $16.00 price objective with the Buy rating. Some is due to its ownership and some is due to the exit of this business.

24/7 Wall St. would point out that the $7.18 close on Friday is versus a $7.42 consensus analyst target. We covered this analyst report in detail this week and would point out to readers that Merrill Lynch’s view is a total outlier call with the highest price objective by far. Still, back in August Windstream was one of the featured ten companies that had decided to ignore the market’s massive selling pressure.