A month ago, there was palpable anxiety on Wall Street over first-quarter results. Everything from bad weather to a cyclical slowdown to slower tax returns had many fearing the worst. With more than half of the S&P 500 companies having reported, things are looking much brighter, as some of the biggest and best blue chip leaders have posted very respectable results.
The good thing for investors is the solid results are not just limited to one or two sectors; they are coming in across the board. In a series of new reports that cover the results for the quarter, the analysts at Deutsche Bank are raising their price targets on some of the top companies in the firm’s research universe. We picked four that look like solid ideas for the second quarter and the rest of 2019.
This top internet company has long been rumored to be in play as a takeover target. eBay Inc. (NASDAQ: EBAY) operates e-commerce platforms that connect various buyers and sellers worldwide. Its platforms enable sellers to organize and offer inventory for sale, and buyers to find and buy it virtually anytime and anywhere.
The company’s Marketplace platforms include its online marketplace at ebay.com and the eBay mobile apps, as well as StubHub platforms that comprise its online ticket platform at stubhub.com and the StubHub mobile apps, which enable fans to purchase tickets to the games, concerts and theater shows. Its Classifieds platforms include a collection of brands, such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Classifieds and others that offer online classifieds and help people find whatever they are looking for in their local communities.
eBay posted solid results, and the analysts said this:
In our view, eBay reported significantly better than feared results. Although unit growth was flat year-over-year and gross merchandise value declined ex-currency primarily on more rational marketing spend, revenue and operating income came in significantly better than Street expectations. The company also provided segment-level margins as well as visibility into the impact of the cross-sell efforts on Classifieds and StubHub, likely to dispel any expectations that a transaction may be imminent for the two businesses. Promoted Listings revenue continues to grow triple digits year-over-year and the company appears to be on track to achieve its objective of $1 billion in advertising revenue.
Shareholders receive a 1.47% dividend. Deutsche Bank lifted its price target from $39 to $42, which compares with the Wall Street consensus target of $37.48. The shares closed Thursday at $38.011.
This top Warren Buffet holding not only offers safety but an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. With coolers getting packed for picnics, parades and vacations you can bet that they will be stuffed with products from this iconic American company. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
The soft-drink giant posted solid numbers, and the analyst said this:
Although +1.5-2.0 points of the quarter’s top-line strength was timing-related (safety-stock shipments ahead of Brexit), the company stressed that underlying top-line strength (5%+ after backing out the safety-stock build, but adding back 1 point for one fewer selling day in the quarter) was encouraging versus plan (not to mention Street estimates of +3%-4%) and indicative of improved system execution due to improved Coke execution and bottler alignment.
Coca-Cola investors receive a 3.34% dividend. The $53 Deutsche Bank price target ticked up to $54, while the consensus price target is $50.33. The stock closed at $47.84 on Thursday.