We see daily analyst upgrades and downgrades, coming with price targets. They can be helpful tools for investors, providing a more structured plan and helping to inject positivity surrounding future performance.
Of course, stocks don’t straightforwardly reach price targets, as unforeseen circumstances can always influence performance. Overall, the positive shift in sentiment can be seen as a primary takeaway from these upgrades.
Recently, three stocks – AbbVie (ABBV – Free Report) , Hershey (HSY – Free Report) , and Dollar Tree (DLTR – Free Report) – have all gotten favorable upgrades from analysts. Let’s take a closer look at each.
AbbVie
William Blair upgraded AbbVie shares to Outperform and provided a fresh $190 per share price target, which implies roughly 15% upside from today’s levels. It’s worth noting that the upgrade came just a few days before the company’s next quarterly release expected this Friday, February 2nd, before the market’s open.
AbbVie has been a consistent earnings performer as of late, exceeding our consensus revenue and EPS expectations in each of its last three releases. Concerning its latest print, the better-than-expected results were driven by a strong performance across its non-Humira growth platform, allowing the company to lift its guidance for FY23.
The company’s shareholder-friendly nature certainly can’t be overlooked, holding a spot in the elite Dividend Aristocrats club. ABBV shares presently yield a solid 3.8% annually paired with a sustainable payout ratio sitting at 50% of its earnings.
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Shares trade at a premium relative to historical levels, with the current 14.5X forward 12-month earnings multiple above the 9.1X five-year median. Still, the current multiple compares favorably to its Zacks – Large Cap Pharmaceuticals industry average of 18.9X.
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Hershey
Bernstein upgraded Hershey shares to Outperform, with its $235 price target suggesting more than 20% upside from current levels. Shares have had a rough showing over the last year, down roughly 12% and underperforming relative to the general market.
Like ABBV, Hershey carries a shareholder-friendly nature, currently sporting a 10% five-year annualized dividend growth rate.
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The company’s steady growth is slated to continue, with consensus expectations for its current year suggesting 12% earnings growth on 8% higher sales. Peeking ahead to FY24, estimates allude to an additional 3% of bottom line expansion paired with a 2.9% sales increase.
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Dollar Tree
JPMorgan upgraded Dollar Tree to Overweight and moved its price target up to $157 per share, implying 18% upside from current levels. Shares have displayed a modest amount of relative strength over the last three months, up 21% compared to the S&P 500’s impressive 18% gain.
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Consensus expectations for its next quarterly release suggest solid growth, with earnings forecasted to climb 13% year-over-year on 12% improved sales. Analysts have shown optimism for the release, taking the $2.66 Zacks Consensus EPS Estimate 3% higher since November.
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Bottom Line
Price targets can be helpful tools. Of course, it’s critical to note that not all stocks reach these forecasted levels, as unforeseen circumstances can always affect future performance.
Still, the positivity surrounding upgrades can be seen as a solid takeaway.
For those seeking stocks that analysts have recently received favorable coverage, all three above – AbbVie (ABBV – Free Report) , Hershey (HSY – Free Report) , and Dollar Tree (DLTR – Free Report) – precisely fit the criteria.
