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A Trading Opportunity in Peloton


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These reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s. Some of the reports’ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

Peloton Interactive PTON-Nasdaq

Outperform Price $28.40 on Dec. 31

By Baird Equity Research

We were surprised by the delayed positive reaction following the strong early-November fiscal first-quarter report (stock eventually gained 48% during November), as well as by the nearly 20% pullback during December. With few identifiable new fundamental concerns, we suspect that the recent pullback has reflected an anticipation of the calendar first-quarter post-IPO lockup expiration for original shareholders, plus technical trading factors (stock back near 50-day moving average). With lockup concerns probably fully embedded here, and with a healthy fiscal second-quarter to third-quarter setup taking shape, we think the stock can trade back toward prior highs, resulting in a compelling near-term trading opportunity. Price target: $35.

777彩票地址Eurnav EURN-NYSE

OutperformPrice $12.54 on Jan. 2
by Evercore ISI

777彩票地址Eurnav [an oil tanker company] announced that it has completed a sale-and-leaseback transaction for three 12-year-old very large crude carriers, or VLCCs, with an aggregate sale price of $126 million. After repayment of debt, the transaction adds $66.6 million of liquidity to Eurnav’s already industry-leading balance sheet.

The vessels will be chartered back at a bareboat rate of $20,681/day for a 4.5-year period, translating to a roughly 6% cost on the facility. However, Eurnav retains market exposure with these ships in a strong underlying tanker rate environment. Net-net, our earnings-per-share forecast for 2020 comes down by two cents, to $2.48, owing to the interest expense associated with the leaseback facility, but the liquidity benefit from the deal far outweighs the modest bottom-line impact. All told, we retain our Outperform rating, with a 12-month price target of $19.

Nvidia NVDA-Nasdaq

BuyPrice $209.79 on Dec. 31
777彩票地址 by Benchmark

We reiterate our Buy rating and raise our price target to $275 from $240 on Nvidia shares, ahead of our expectations for a recovery to strong revenue and earnings growth in fiscal 2021. Specifically, we are forecasting revenue and earnings growth of 20% and 34%, respectively, following declines in a challenging fiscal 2020. We expect Nvidia to benefit from a reacceleration of data-center spending, coupled with an improving demand environment for graphic processing units, or GPUs, in gaming end markets. In our view, potential catalysts for Nvidia shares in 2020 include 1) positive bias to estimates on continued data-center demand improvement, 2) visibility into Nvidia’s 7-nanometer product road map, and 3) the closing of the pending Mellanox acquisition.

Sol-Gel Technologies SLGL-Nasdaq

Strong Buy Price $15.87 on Dec. 30
by Raymond James

As 2019 fades away, Sol-Gel has accomplished its most important inflection point along the journey toward commercializing Twyneo as it reports positive top-line data from Phase 3 studies. Twyneo is a novel, once-daily, nonantibiotic topical cream for the treatment of acne vulgaris that contributes 65% to our per share valuation.

While we await the complete study data set, one of the arms, SGT-65-04, appears consistent with strong positive Phase 2 results, which we viewed to be better than some of the leading marketed branded products, such as Epiduo Forte or Aczone, despite a much larger patient population. The company plans to submit its new drug application, or NDA, in 2H20, targeting commercialization in second-half 2021. With positive Phase 3 results from both Twyneo and Epsolay, we are reiterating our Strong Buy rating and raising our price target to $23 from $21.

Apple AAPL-Nasdaq

Outperform Price $300.35 on Jan. 3
777彩票地址 by RBC Capital Markets

We raise our near-term estimates, as our social-media web-scraping analysis indicates higher customer interest and satisfaction with the current-year iPhone lineup, as well as sustained and increasing interest in wearables (AirPods).

In addition, we believe that better customer reception and our outlook for the fiscal-year 2021 fifth-generation, or 5G, lineup warrant a higher multiple, and we raise our price target accordingly [to $330 from $295].

777彩票地址 Worth noting: September interest (measured by tweet volume) in the 11/11 iPhone Pro model is above the X model year and well above last year’s incremental XS update. While October–December interest decreased from the September peak (as happens every year), the decline was far less than in the prior two model years.

Despite being priced at a premium to the (already premium-priced) AirPods, AirPods Pro (with noise cancellation) have helped drive continued interest in the wearables category. There is currently about a four-week wait period for new Pro orders after being on the market for two months.

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