Investing

Deutsche Bank Raises Price Targets as Q1 Earnings Come in Red Hot

Stryker

This leading medical devices company is a big beneficiary in the aging of America thesis. Stryker Corp. (NYSE: SYK) operates in two business segments. Its orthopedic implants business produces implants used in joint replacement, trauma, spine and craniomaxillofacial procedures. The MedSurg segment produces surgical equipment (other than orthopedic hardware), as well patient handling and emergency medical equipment.

The company once again reported outstanding results, and the analysts noted this when breaking down the results:

Stryker remains one of the best positioned medtech companies in our coverage universe. While 1Q’s results were strong and Stryker raised the lower end of organic revenue guidance and EPS guidance, we also acknowledge that expectations were high into the print and we could see some short-term pressure. However, with a strong cadence of new product flows in all businesses, K2M integration tracking ahead of schedule, building momentum internationally (particularly EM where SYK’s revenue mix is currently well below peers), and continued visibility on further margin improvement, the company is well positioned for another year of strong organic revenue and EPS growth at the high end of large cap medtech peers – as evidenced by the bullish initial guidance.

The Deutsche Bank price objective was raised to $208 from $181. The consensus target was last seen at $197.67, and shares closed Thursday at $187.17.

Yandex

This is the top search engine in Russia, with almost 65% advertising and traffic share in paid search, and it continues posting solid growth.  Similar to China’s Baidu, Yandex N.V. (NASDAQ: YNDX) is one of the few players globally that managed to successfully compete against Google in paid search.

The company is geared to structural growth in internet advertising as the Russian market sees higher internet penetration and higher share of ad budgets moving away from traditional media to new media. Many on Wall Street expect rapid growth of internet advertising and that Yandex will stay in the lead in paid search.

Yandex Taxi is a fast growing segment, and analysts expect it to carry out as many as 2.2 billion rides and achieve a 20% take-rate (net) across Russia by 2022. Assuming 35 million users, which is 24% of the population, that could translate into 64 rides per user by 2022, which compares to 53 for Uber globally in 2018. A stunning growth rate.

Deutsche Bank has been bullish on the company for some time and said this:

Despite the IPO of Lyft (not covered) providing another play on ride sharing, we think Yandex stands out as a profitable play on ride sharing in addition to other related businesses that have greater long-term margin potential given market dominance. We do not expect much disclosure around capital structure but see this as an outstanding overhang on shares.

Deutsche Bank lifted its price target to $48 from $44. The consensus target is $42.83, and shares closed at $37.12.

These four top stocks are all rated Buy and the companies have posted outstanding results. For investors looking for ideas, these make sense because any potential headline issues over earnings results are out of the way for now, and they all seem to be trending higher with solid corporate metrics.