TE Connectivity (TEL) announced that its board has approved a recommendation to raise quarterly cash dividend by approximately 4.2% to $0.50 per share. The connectivity and sensor product manufacturer said that its board will present the recommendation at its annual shareholder meeting scheduled on Mar. 10, 2021, for approval.
The planned dividend hike would represent an annual dividend of $2 per share and translate into an annualized dividend yield of approximately 1.7%.
TE Connectivity said that quarterly cash dividend hike will be applicable for “the four fiscal quarters starting in April 2021, the beginning of the third fiscal quarter.” (See TEL stock analysis on TipRanks)
On Oct. 30, Oppenheimer analyst Christopher Glynn reiterated a Buy rating and price target of $114 (3.5% downside potential). In a note to investors, Glynn wrote that our “rating reflects our view of extending track record of long-term revenue and margin execution. TEL looks increasingly well positioned for long-term solid organic growth prospects via global positioning against secular demand expansion for high-quality connectivity assurance.”
Overall, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 6 Buys and 2 Holds. The average price target stands at $115 and implies downside potential of about 2.6% to current levels. Shares have gained 23.2% year-to-date.
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Construction Partners reported mixed 4Q results, as the company's earnings came ahead of the Street's estimates but revenues fell short of expectations. Meanwhile, the infrastructure development company's FY21 sales outlook surpassed analysts' projections. Shares rose 1.1% in Friday’s extended trading session after closing down 4.8% on the day.
Construction Partners’ (ROAD) 4Q EPS of $0.34 grew 6.3% year-over-year and topped analysts’ estimates of $0.30. However, revenues fell 5.3% year-over-year to $224.7 million and missed the Street consensus of $241.5 million.
Construction CEO Charles E. Owens said, “Our successful year was primarily driven by our disciplined approach to productivity at the project level and bidding processes, effective utilization of crews and equipment, vertical integration synergies and lower fuel costs.” He continued, “Heading into fiscal year 2021, our organization is well-positioned for continued growth. We see strength in the state funding programs across our geographic footprint, where the demand for road repair and maintenance are ongoing.”
As for fiscal 2021, the company expects sales to generate between $950-1000 million, which is above the $859.25 million forecasted by analysts. (See ROAD stock analysis on TipRanks)
Following the results, Raymond James analyst Joshua Wilson maintained a Buy rating on the stock. The analyst said, “Initial FY21 guidance suggests solid growth, likely with a significant (but not yet quantified) contribution from the recent wave of acquisitions.”
Meanwhile, the Street has a bullish outlook on the stock with a Strong Buy analyst consensus. With shares up 64.2% year-to-date, the average price target stands at $23.50 and implies downside potential of about 15.2% to current levels.
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United Airlines predicts increased cash burn in the fourth quarter as a rise in COVID-19 cases continues to impact travel demand.
The carrier now expects 4Q cash burn of about $24 million-$26 million, plus $10 million of average debt principal payments and severance payments per day. United Airlines (UAL) had earlier predicted 4Q cash burn of $15 million-$20 million, plus $10 million of severance and debt principal payments. It cited continued deceleration in bookings and a change in working capital due to a shift in the timing of certain payments and receipts between quarters as reasons for the revised cash burn guidance.
Furthermore, the carrier expects 4Q revenue to decline by about 70% year-over-year. United Airlines stated it does not expect demand recovery to follow a linear path. That said, it added that recent favorable developments in COVID-19 vaccines show “an encouraging line of sight to the other side of the pandemic,” with current bookings for 3Q21 down about 40% compared to a decline of 70% in December 2020 and January 2021 travel. (See UAL stock analysis on TipRanks)
“While it will take time for the vaccine to be widely distributed, the Company’s confidence is even stronger in the recovery and the trajectory of the rebound in 2021 and beyond,” the company stated in an SEC filing.
Last week, Deutsche Bank analyst Michael Linenberg downgraded United Airlines to Hold from Buy but increased the price target to $56 from $54. Linenberg feels that airline stocks are fairly valued following the recent rally triggered by positive developments on the COVID front. He noted that the stocks are at or near fair value based on 2022 valuations, suggesting that investors have already paid for two years of earnings growth. However, Linenberg continues to maintain a bullish long-term stance on the sector.
Overall, the Street is sidelined on United Airlines, with the Hold analyst consensus based on 5 Buys, 5 Holds and 3 Sells. The average price target stands at $46.70, reflecting a possible downside of 3.4% in the months ahead. Shares have already declined 45.1% so far this year.
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In 2020, biotechs have taken center stage. There are several biotech stocks that could generate stellar returns over the near future, according to Wall Street analysts. However, one should be aware that many of these stocks are risky as they are largely impacted by any news related to the development of their key drugs and regulatory approvals.
Bearing this in mind, we will use TipRanks’ Stock Comparison tool to place BioXcel Therapeutics and TG Therapeutics alongside each other and select the biotech stock offering higher returns. We are talking about over 100% upside potential here.
BioXcel Therapeutics (BTAI)
BioXcel is a clinical-stage biopharma company that uses artificial intelligence to develop drugs across the neuroscience and immuno-oncology spaces. Currently, the company is not generating any revenue as it does not have any approved drugs on the market. That said, analysts are keeping an eye on the company’s two lead candidates, BXCL501 and BXCL701.
BXCL501 is an orally dissolving thin film formulation of a popular sedative called Dexmedetomidine in late-stage development for the treatment of agitation resulting from neuropsychiatric disorders like schizophrenia and bipolar disorder. Meanwhile, BXCL701 is being developed for the treatment of a rare form of prostate cancer and pancreatic cancer in combination with other immuno-oncology agents.
On Dec. 7, BioXcel announced that it was awarded a grant by the U.S. Department of Defense to evaluate BXCL501 in patients suffering from post-traumatic stress disorder related to alcohol and substance abuse disorder. This will be the first time that BioXcel is investigating BXCL501 as a potential chronic treatment. (See BTAI stock analysis on TipRanks)
Weighing in on this recent update, H.C. Wainwright’s Ram Selvaraju stated, “Dex [Dexmedetomidine] is a full agonist with higher CNS [Central Nervous System] penetration and higher intrinsic activity at the receptor compared to the other alpha-2 receptor agonists, including clonidine and guanfacine, which are only partial agonists. BXCL501 could therefore be a valuable therapeutic option to reduce the hypersympathetic response in patients with PTSD and may have the potential to become a front-line chronic treatment option for PTSD patients.”
BXCL501 has been granted fast track designation by the FDA for the acute treatment of agitation in patients with schizophrenia, bipolar disorders and dementia. Following favorable results from the Phase 3 Serenity trials, the company completed a successful pre-NDA (New Drug Application) meeting with the FDA for BXCL501 for the acute treatment of agitation in patients with schizophrenia and bipolar disorders. What’s more, the FDA agreed to a rolling review of the NDA, with the company already submitting part of the NDA. BTAI plans to submit the complete application in 1Q21.
Selvaraju believes that BXCL501 could be approved in the U.S. by the end of 2021 or early 2022, assuming an on-time NDA submission. The 5-star analyst drew investors’ attention to the fact that BXCL501 is also being developed to treat acute delirium in hospitalized patients, including COVID-19 patients. Given multiple additional applications for BXCL501, Selvaraju sees a rich pipeline in a single drug candidate, and hence, reiterated a Buy rating with a price target of $175 (upside potential of 306%).
Currently, the Street's average price target of $115 hangs below Selvaraju’s estimate but still indicates an attractive upside potential of about 167% in the months ahead. Shares have already risen by a whopping 195% year-to-date. Overall, BioXcel scores a Strong Buy analyst consensus based on 3 unanimous Buys.
TG Therapeutics (TGTX)
TG Therapeutics is a biopharma company focused on the development of novel treatments for B-cell malignancies and autoimmune diseases. TGTX shares have exploded over 280% so far this year in reaction to many favorable pipeline updates.
Currently, the company’s two investigational compounds, ublituximab and umbralisib (the combination of which is referred to as U2) are in Phase 3 clinical development for patients suffering from hematologic malignancies, with ublituximab also in Phase 3 clinical development for multiple sclerosis.
Shares spiked 41% on Dec. 10 as the company announced positive results from its Ultimate I and II Phase 3 studies evaluating Ublituximab monotherapy for multiple sclerosis treatment. TG Therapeutics disclosed that both studies met their primary endpoints, with ublituximab demonstrating a statistically significant reduction in annualized relapse rate over a 96-week period.
The company stated that further analyses of the Ultimate I and II studies, including safety and secondary endpoints, will be conducted and detailed data will be presented at an upcoming medical congress in the first half of 2021. Additionally, it expects data from these studies to support a Biologics License Application (BLA) submission for ublituximab in multiple sclerosis, targeted in mid-year 2021.
The favorable update prompted H.C. Wainwright analyst Edward White to significantly raise his price target to $61 from $38. The five-star analyst reiterated a Buy rating on TG Therapeutics as he sees an increased probability of success for ublituximab in multiple sclerosis.
In a research note to investors, White stated, “That the trials are being conducted under an SPA [Special Protocol Agreement] gives us more confidence that the BLA will be successful. We do not expect any issues regarding CMC as the company is already submitting that section to the FDA with the submission for CLL. Importantly, TG plans to strategically price ublituximab to enhance patient access.”
“TG is currently in the early stages of talking with payors. We continue to expect ublituximab to take market share due to its more convenient infusion time. For ublituximab in MS, we estimate sales of $36M in 2022 and $601M in 2028,” White added. (See TGTX stock analysis on TipRanks)
The Street mirrors White’s optimism, with a Strong Buy analyst consensus backed by 5 unanimous Buys. Given the meteoric rise in the stock, the price target of $54.20 implies an upside potential of 28.2% over the coming year.
Conclusion
Clearly, the Street’s outlook on BioXcel and TG Therapeutics is very bullish based on optimism surrounding their lead candidates. However, the triple-digit upside potential in BioXcel stock makes it a more compelling pick than TG Therapeutics. A word of caution for investors would be to consider all risks associated with investing in emerging biotech stocks, including the failure of obtaining regulatory approvals for promising drugs, funding requirements and competition from pharma giants.
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment
Tesla will put a halt on production of its high-end Model S sedans and its luxury model X SUV lines for 18 days starting on December 24, according to CNBC.
The S and X lines are older models and only accounted for around 11% of deliveries in the third quarter, with the newer Model 3 and Model Y versions making up the rest.
Tesla (TSLA) CEO Elon Musk informed employees working on those production lines at the Fremont, California factory on Friday that they were being offered one full week of paid leave, and were encouraged to try and find work in other areas of the factory, or alternatively, to “volunteer” to assist the company in making deliveries to customers during the shutdown.
Tesla announced in October that it was recalling nearly 50,000 Model S and Model X vehicles in China over potentially unsafe suspension issues. Further questions arose in November when Tesla declared that it was refunding some Model S and Model X owners and extending its warranty due to touchscreen blackouts and other problems.
When questioned by CNBC about Tesla’s intentions regarding the Model S and Model X lines during the shutdown, Tesla failed to immediately offer a response. (See TSLA stock analysis on TipRanks)
Goldman Sachs analyst Mark Delaney recently upgraded his rating on the stock to a Buy and increased his price target from $455 to a Street high target of $780 (28% upside potential). He believes that EV penetration will happen quicker than he first projected and that EV sales will account for 15% of new car sales by 2025.
Consensus among analysts is a Hold based on 8 Buys, 10 Holds and 7 Sells. The average price target of $392.40 implies a potential decline of around 36% over the next 12 months.
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Virgin Galactic aborted the first powered test flight of its spaceplane on Saturday despite getting the all-clear before launch, Sky News reported.
The spaceplane was released from under its carrier aircraft at an altitude of about 40,000 feet, but the spacecraft’s engine shut down after igniting momentarily. No passengers were on board and pilots, CJ Sturckow and Dave Mackay, were able to glide the spacecraft back to base safely.
The full impact of Saturday’s aborted test flight is uncertain at this time.
Virgin Galactic (SPCE) aims to begin commercial operations after a series of three final test flights have been completed. Saturday’s failure to launch would have been the first in the series and company founder, Sir Richard Branson, is scheduled to personally be on board the third test flight in Q1 2021.
Five spaceplanes carrying tourists into sub-orbital space will make up Virgin Galactic’s fleet and the goal is to offer space tourism flights by as early as next year. Virgin Galactic already has more than 600 customers who have committed to the $250,000 price per seat, including Justin Bieber and Leonardo Dicaprio.
Demand for tickets is reportedly high and Virgin Galactic expects to raise ticket prices substantially once ticket sales reopen after Branson has completed his test flight, according to CNBC. (See SPCE stock analysis on TipRanks)
Cowen and Co. analyst Oliver Chen reiterated a Buy rating a month ago on the stock with a price target of $22 (31% downside potential). The analyst stated that the company is in the final innings of technological feasibility test programs and success should yield commercial operations and associated revenue generation.
Consensus among analysts is a Strong Buy based on 3 Buy ratings and 1 Hold rating. The average price target of $25.25 implies a potential decline of around 21% over the next 12 months.
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MetLife announced a new share buyback program worth $3 billion. The leading financial services provider also said that it has completed repurchases under its previous repurchase authorization.
Metlife’s (MET) CEO Michel Khalaf said, “This new authorization highlights our continuing confidence in our financial strength and flexibility.”
Khalaf added, “Despite a challenging 2020, we expect by year-end to have invested about $3 billion to support new business growth at attractive returns and payback periods, deployed nearly $1.7 billion to growth-oriented and accretive M&A, and returned at least $2.6 billion to shareholders through common stock dividends and repurchases while maintaining a liquidity buffer well in excess of the $3-4 billion target.”
Concurrently, the company agreed to divest its Metropolitan Property and Casualty (P&C) Insurance unit to a subsidiary of the Zurich Insurance Group. The all-cash $3.94 billion deal is expected to close in the second quarter of 2021. (See MET stock analysis on TipRanks)
On Dec. 11, Wells Fargo analyst Elyse Greenspan raised her price target to $53 (12.3% upside potential) from $51 and maintained a Buy rating on the stock, following the sale of the P&C business. The analyst said, “We view the P&C sale favorably and came away incrementally more positive on the shares.”
Meanwhile, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 7 Buys and 2 Holds. The average price target stands at $52 and implies upside potential of about 10.2% to current levels. Shares are down by about 7.4% year-to-date.
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AstraZeneca announced that it has agreed to acquire US drugmaker Alexion Pharmaceuticals in a cash and stock deal worth $39 billion. The Britain-based pharmaceutical company said that the buyout will help expand its presence in the rare disease and immunology drug market.
AstraZeneca (AZN) CEO Pascal Soriot stated, "Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases. This acquisition allows us to enhance our presence in immunology. We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients."
AstraZeneca will pay $60 in cash and 2.1243 AstraZeneca American Depositary Shares for each Alexion (ALXN) share held. The transaction is likely to complete during the third-quarter of 2021, following which, Alexion shareholders will own a 15% stake in the combined company.
AstraZeneca expects the combined company to “deliver double-digit average annual revenue growth through 2025.” Moreover, the transaction is projected to be immediately accretive to earnings per share, “with double-digit percentage accretion anticipated in the first three years following the completion of the acquisition.” (See AZN stock analysis on TipRanks)
On Nov. 30, Cowen & Co. analyst, Steve Scala reiterated a Buy rating and price target of $66 (21.6% upside potential). In a note to investors, Scala cited AstraZeneca as the “Best Pharma Idea for 2021.” The analyst wrote, "AZN has more important news events in 2021 than most other pharma stocks. This includes: Enhertu Ph III data in HER2-low BC, Farxiga Ph III data in HFpEF, Lynparza Ph III data in adjuvant BC, anifrolumab, roxadustat and COVID-19 vaccine approvals/rollouts, tezepelumab full Ph III data/filings in severe asthma, and Tagrisso approval in adjuvant NSCLC, among others."
Overall, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 6 Buys and 1 Hold. The average price target stands at $65.25 and implies upside potential of about 20.2% to current levels. Shares have gained 8.8% year-to-date.
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Abbott Laboratories (ABT) announced a 25% hike in its quarterly dividend to $0.45 per share from $0.36, marking the 49th consecutive year of increased dividend payouts. The healthcare company said that the new dividend will be paid on Feb. 16, 2021, to shareholders of record as of Jan. 15, 2021.
Abbott’s annual dividend of $1.80 per share now reflects a dividend yield of 1.7%. The company’s CEO Robert B. Ford said, “Paying a strong and growing dividend is foundational to Abbott.” He added, “The increase reflects the strength and momentum of Abbott's diversified business and our ability to invest in future growth while returning immediate value to shareholders.”
Earlier on Oct. 21, Abbott delivered better-than-expected 3Q results, wherein earnings of $0.98 grew 16.7% and topped the Street’s estimate of $0.91 per share. The company’s 3Q revenues increased 9.6% year-over-year to $8.9 billion, which came in ahead of analysts’ estimate of $8.5 billion. (See ABT stock analysis on TipRanks)
Following the earnings results, BTIG analyst Marie Thibault said, “We see room for upside to our forecast, particularly in Diagnostics and Devices and expect ABT to remain a consistent outperformer. This is likely baked into the stock price, as shares trade at a premium to the comp group on both a P/E and EV/Sales basis.” She maintained a Hold rating on the stock on valuation.
Unlike Thibault, most of the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 9 Buys and 2 Holds. The average price target stands at $119.30 and implies upside potential of about 11.5% to current levels. Shares gained 23.2% year-to-date.
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Viatris announced a restructuring plan under which the healthcare company plans to cut its total workforce by 20%, which would impact about 9,000 jobs.
Viatris (VTRS), which was formed in November 2020 through the combination of Mylan and Pfizer's Upjohn business, has plans to reduce its costs by at least $1 billion by the end of 2024 or sooner.
The company said that it plans to close or divest up to 15 manufacturing sites globally, including shuttering plants in Morgantown, West Virginia, Baldoyle, Ireland and Caguas, Puerto Rico, with it also closing two manufacturing facilities in India. As a result of the plant closures, Viatris expects to incur a pre-tax charge of about $500 million to $600 million, while it expects annual cost savings of about $250 million to $300 million after the implementation of the restructuring.
Viatris’ CEO Michael Goettler said, “The actions we are announcing today are consistent with our commitment to optimally design our new company to operate efficiently. This initiative is part of Viatris' roadmap to ensure we can maximize long-term value creation for shareholders and for all stakeholders, including the patients and customers we serve.” (See VTRS stock analysis on TipRanks)
Earlier on Nov. 17, Barclays analyst Balaji Prasad lowered the price target to $25 (44.2% upside potential) from $27 but maintained a Buy rating on the stock. The analyst remains optimistic about Mylan's “robust portfolio” of biosimilars. Prasad also believes that a “steady dividend could attract a broader investor base to shares.”
Meanwhile, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 4 Buys, 2 Holds and 1 Sell. The average price target stands at $22.33 and implies upside potential of about 28.8% to current levels. Shares have increased 11.6% since it was listed on the NASDAQ on Nov.12, 2020.
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