Analysts increased their target prices for a number of companies listed on the S&P 500 index. The companies receiving the upgrade are now expected to return between 3.45% and 10.67% more than the previous week. Bloomberg published a list of companies with the highest change in the target price. Before following analyst recommendations, investors should ask:
• Why the company received a higher target price
• If too many investors already optimistic about the companies
• If shares are fully-valued even if trading at or near yearly highs.
In a number of cases, companies are trading at new 52-week highs, which could explain the revised target prices.
S&P companies with the largest increase in target price are:
Business Section: Investing Ideas
The top five companies with the most upside, based on target prices by analysts are listed below.
Trading at 52-week highs:
1. Newell Rubbermaid Inc. (NWL, Earnings, Analysts, Financials): Designs, manufactures, sources, packages, and distributes consumer and commercial products. Market cap at $6.08B, most recent closing price at $21.04. With 16% upside, Newell Rubbermaid recently announced it was cutting 2,000 jobs and reorganizing. The company reported a quarter that beat earnings per share expectations, while meeting revenue forecasts. The company generated $1.54 billion in revenue, and earned $0.47 per share.
2. Cigna Corp. (CI, Earnings, Analysts, Financials): Operates as a health service organization. Market cap at $15.31B, most recent closing price at $53.09. Cigna has 13.5% upside. It is a managed health care company whose earnings were higher than expected. The company benefited on acquisitions, which helped profits double. Cigna forecast earnings of $5.70 to $5.90 per share.
3. Eastman Chemical Co. (EMN, Earnings, Analysts, Financials): Engages in the manufacture and sale of chemicals, plastics, and fibers in the United States and internationally. Market cap at $8.2B, most recent closing price at $59.30. With 13.8% upside and trading 3.55% below a 52-week high, Eastman Chemical is up after reporting earnings. The company earned $1.57 per share, compared to $1.26 per share last year. Eastman thinks it can earn $6 per share in 2013.
4. priceline.com Incorporated (PCLN, Earnings, Analysts, Financials): Operates as an online travel company. Market cap at $31.63B, most recent closing price at $634.74. PCLN rallied 8.30% on November 2. Analysts expect more upside of nearly 18%. Sales in Europe were unexpectedly higher than analyst forecasts.
5. Ford Motor Co. (F, Earnings, Analysts, Financials): Develops, manufactures, distributes, and services vehicles and parts worldwide. Market cap at $42.6B, most recent closing price at $11.17. With a massive 27.8% in upside using analysts’ forecast, Ford rallied after reporting stronger earnings. A positive development for Ford was the announcement that its CEO, Mulally, will stay on indefinitely. Mulally is the architect behind Ford’s recovery.
Disclosure: Author has a long position in Ford Motor Co. (F)
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