Investing

Credit Suisse Issues Top Outperform Stock Picks for 2019

Cheniere Energy Inc. (NYSE: LNG) has a price target of $89, and the firm noted that it has seen a big pullback with energy prices despite strong fundamentals. Cheniere is still considered to be the only public liquefied natural gas (LNG) pure-play of its kind company with operating assets, and the firm prefers its first-mover advantage and sees a constructive view for LNG exports continuing.

Cheniere’s shares were trading at $60.28 on Friday’s close. The 52-week range is $46.00 to $71.03, and the consensus target price is $79.41.

Crown Holdings Inc. (NYSE: CCK) was noted as having been “de-rated materially” since the announcement of the Signode acquisition late 2017. The firm has a $57 target price on the stock, and it sees three strengths here: can volumes in weak geographies while growing where it is well positions; margin expansion in North America mitigating cost inflation; and Signode is delivering the expected high cash conversion while the company is on target to deleverage its balance sheet.

Crown shares were trading most recently at $48.00, in a 52-week range of $40.09 to $62.27 and with a consensus target price of $60.25.

Delta Air Lines Inc. (NYSE: DAL) is seen as having a low-risk profile and best-in-class execution. The firm’s price target is $71, based on a sustainable margin return on capital. Also noted is Delta’s investment-grade balance sheet with a free cash flow yield of about 10% in 2019. All of this will help Delta support billions of dollars in capital return for its shareholders.

Delta shares closed trading at $56.07, in a 52-week range of $48.52 to $61.32 and with a consensus analyst target of $55.80. The dividend yield is 2.5%.

Owens-Illinois Inc. (NYSE: OI) is noted as having a current stock price that already reflects expectations of a structurally declining business, but Credit Suisse sees a credible path for further performance improvement with stronger earnings growth from 2018 through 2021. The firm’s price target is $24. It further sees a possibility for significant value accretion if Owens Illinois can successfully develop a new breakthrough furnace technology, MAGMA, with scale deployment expected in 2022. All this comes with an upward “Blue Sky” scenario in which the firm sees Owens Illinois shares potentially as high as $34.

Owens-Illinois shares closed at $17.63. The consensus target price is $20.93, the 52-week trading range is $15.67 to $24.00, and the dividend yield is 1.1%.

Sarepta Therapeutics Inc. (NASDAQ: SRPT) is a focus on the DMD gene therapy programs in development, and Credit Suisse believes the registrational design proposed by Sarepta is reasonable and ultimately will see initial approval to be supported by functional improvements. An “all clear” outcome from Sarepta’s upcoming FDA meeting should help shares rebound from recent weakness, but the firm sees Sarepta being the first to market with an expected early 2021 launch with a potential best-in-class profile. The price target for the stock is $189.

Sarepta shares closed trading at $121.38, in a 52-week range of $50.68 to $176.50. The consensus target price is $195.43.

United Continental Holdings Inc.’s (NASDAQ: UAL) turnaround is viewed as in being full swing, and Credit Suisse has a $113 price target. The airline is bolstering its domestic network position and improving asset efficiency for margin expansion. It has outperformed peers and is expected to post strong earnings growth for the next two years.

United Continental shares were last seen trading at $88.23. The 52-week range is $60.44 to $97.85, and the consensus target price is $103.59.

U.S. Foods Holding Corp. (NYSE: USFD) has a $37 price target at Credit Suisse. The firm believes that internal operational issues now are largely behind and that the self-driven top-line headwinds are abating. The company is also focused on margin controls after tightening up its sales forecast, and Credit Suisse thinks there is a very low bar for U.S. Foods to clear ahead.

U.S. Foods shares were trading at $31.83 on Friday’s close. The stock has a 52-week range of $27.51 to $40.92 and a consensus target price of $37.47.

And lastly, the end of 2018 has been trading like many of the bear markets of the past. Analyst target prices seem to not matter on most days, and many stocks sell off for the same reasons over and over. Please read the 24/7 Wall St. report about dire warnings surrounding analyst calls during bear markets to avoid some serious pitfalls around Buy and Outperform ratings.

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