Every day, stock analysts release price targets as upgrades and downgrades. Investors typically count on these to add structure to their investment plan, bringing about an air of optimism about the future performance of a given stock.
Nonetheless, reaching these price targets is never a straightforward journey, as unforeseen circumstances can always disrupt the expected trajectory. Despite this, the overall positive shift in sentiment due to these upgrades remains a key takeaway for investors.
AbbVie Inc. (ABBV)
AbbVie saw a significant upgrade from William Blair, moving the stock to Outperform and setting a fresh price target of $190 per share. This implies an approximately 15% upside from the current levels. Interestingly, the upgrade came just before the company’s next quarterly release expected on February 2nd.
AbbVie has consistently surpassed revenue and EPS expectations in its last three releases. Its recent performance was driven by a robust showing across its non-Humira growth platform, leading to an upward revision of its FY23 guidance.
Additionally, AbbVie boasts a generous dividend yield of 3.8% per annum, with a sustainable payout ratio of 50% of its earnings. Although the stock is trading at a premium compared to historical levels, the earnings multiple remains favorable when compared to the Zacks – Large Cap Pharmaceuticals industry average.
Hershey Company (HSY)
Bernstein lifted Hershey shares to Outperform, coupled with a $235 price target indicating over 20% upside from present levels. Despite a lackluster performance over the past year, down by approximately 12%, Hershey maintains a shareholder-friendly stance with a 10% five-year annualized dividend growth rate.
The company is poised for steady growth, with consensus expectations projecting a 12% earnings increase for the current year and similar growth projections for FY24.
Dollar Tree, Inc. (DLTR)
JPMorgan upgraded Dollar Tree to Overweight and raised its price target to $157 per share, signaling an 18% upside from current levels. Over the last three months, Dollar Tree has shown relative strength, with a 21% increase compared to the S&P 500’s 18% gain.
Analysts anticipate solid growth in the next quarterly release, with a forecasted 13% year-over-year climb in earnings on 12% improved sales. Notably, consensus estimates for Dollar Tree’s EPS have risen 3% since November.
Final Words
While price targets from analysts can be beneficial, it’s important to remember that these targets are not always met due to unforeseen circumstances impacting future performance. Nevertheless, the overall optimism surrounding these upgrades remains noteworthy. For investors interested in stocks favored by recent analyst coverage, AbbVie Inc. (ABBV), Hershey Company (HSY), and Dollar Tree, Inc. (DLTR) all make the cut.
