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Maxar Technologies (NYSE: MAXR)
Maxar shares have a $52 price target at Goldman Sachs. Maxar’s position as the “world leader in high resolution earth imagery,” according to Poponak, was emphasized.
“This is a recurring, high-margin business that has compounded cash flows for years. Government and commercial customers are increasingly prioritizing Earth observation data and analytics, and the upcoming launch of the Worldview Legion constellation will increase capacity to meet excess demand,” Poponak wrote.
The National Reconnaissance Office, which expects to issue new long-term satellite imagery contracts soon, is a key revenue stream for Maxar’s earth imagery business. Maxar is facing competition from the rise of private companies such as Planet Labs and BlackSky, but Goldman is unconcerned.
“New competitors are entering this market, but we believe they will lag far behind MAXR,” Poponak added.
Maxar’s space infrastructure business “has been loss-making for several years” due to a drop in the number of orders for large geostationary communications satellites, a market that, according to Poponak, has “undergone a downturn.”
“That market has now stabilized, with higher orders in 2020 and a wave of replacement demand on the horizon,” Poponak said. “Furthermore, MAXR is diversifying into Civil and Defense end markets, which would add to the current revenue base and drive meaningful top-line growth, as well as provide greater visibility into long-term profitability.”
Goldman Sachs believes Maxar’s $2.6 billion valuation is “very attractive,” with the company providing 2023 earnings targets that “may actually be a bit conservative,” according to Poponak.
“We expect continued financial improvement to drive a re-rating, as the overhang from a challenging past gives way to a promising future,” Poponak wrote.
Carnival (NYSE: CCL)
Carnival, Royal Caribbean and Norwegian Cruise Line Holdings were upgraded to superior performance by analyst Greg Badishkanian, who informed customers Wednesday that earlier signs pointed to a strong reboot for the sector.
“Our checks indicate that booking / pricing trends out of North America have improved over the last month, with stronger trends over the last week.” While there is some lingering uncertainty surrounding the U.S. restart (CDC / Florida, for example), we see those unknowns as largely transitory when viewed against the broader reopening backdrop,” the note said.
According to Wolfe, bookings and demand are outpacing pre-pandemic levels.
“Cumulative 2022 bookings are now up approximately 10% to 15% versus 2019 levels, with signs of improving 1Q demand” (especially in January). Before factoring in [future cruise credits], pricing is up by 15% to 25% compared to 2019.
Wolfe has set a $32 per share price target for Carnival, a $96 price target for Royal Caribbean, and a $36 price target for Norwegian. These correspond to gains of approximately 12%, 8%, and 17%, respectively.
Exxon Mobil (NYSE: XOM)
According to Morgan Stanley, Chevron and Exxon Mobil should exceed profit expectations during the second quarter and see their shares continue to increase.
Morgan Stanley analyst, Devin McDermott, predicted that the two oil majors will easily exceed consensus expectations and that the results should drive future forecasts higher as well.
“As we enter the second quarter, we expect the trend of strong results to continue, with rising commodity prices and capital discipline supporting our constructive call that earnings and FCF estimates need to move higher,” said the note.
According to FactSet, Morgan Stanley expects Chevron to earn $1.63 per share in the fourth quarter, well above the $1.47 per share projected by analysts. Exxon has estimated $1.23 in earnings per share, compared to a Street average of 91 cents.
Morgan Stanley expects the companies to continue to surprise on the upside in the coming years.
“Assuming the most recent commodity prices and margins, we are 30% above XOM consensus earnings and 17% above CVX in 2021/22 on average. This results in organic FCF that is 30% above consensus for both XOM and CVX over the next two years,” according to the note.
Morgan Stanley has overweight ratings on both stocks, but prefers Exxon due to its higher rate of change for free cash flow and its chemicals business, according to the note.
Farfetch (NYSE: FTCH)
Farfetch, a British-Portuguese online luxury fashion retail platform, ranked first on Cowen’s list of “Top Conviction Stocks.”
According to the analysts, led by Oliver Chen, the online luxury fashion market will maintain strong momentum even as physical stores reopen, as consumers continue to prefer to shop online.
They expected Farfetch, a New York-listed company, to benefit from this trend, especially given its March launch on Alibaba-owned Chinese online retail platform Tmall.
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MYT Netherlands Parent BV, a U.S.-listed German holding company that owns the luxury fashion e-commerce business Mytheresa, came in second on the analysts’ list.
They praised Mytheresa’s curation of fashion line edits and predicted that an increase in exclusive events for VIP customers would “fuel growth across regions, particularly in Europe.”
Cowen analysts noted in a deep dive into the stock in February that Mytheresa’s curation and content strategy made it “un-Amazonable.”
It has, for example, created campaign videos, fashion films, and music videos for brands, most notably for exclusive capsule collections. Stella McCartney, for example, created an exclusive capsule collection of 11 pieces for Mytheresa.
American Eagle Outfitter s is a clothing store in the United States.
American Eagle Outfitters ranked third on Cowen’s list, thanks in part to its ongoing “body positivity innovation” at its women’s clothing brand Aerie. Furthermore, they predicted that Aerie’s OFFLINE activewear line would help drive sales and attract new customers into the second half of 2021.
According to the analysts, American Eagle Outfitters is their “top back-to-school pick.” They expected the business to benefit from the return of the “denim cycle,” which refers to a longer-term shift in fashion trends. Kohl’s
Cowen’s analysts predicted that the back-to-school season would be good for U.S. department store Kohl’s, which was ranked fourth on its “Top Conviction” list.
They also mentioned Kohl’s partnership with cosmetics retailer Sephora, which was announced at the end of last year. The first 200 “Sephora at Kohl’s” stores will open in the fall.
Kohl’s has also focused on using cotton, polyester, and other fabrics that are sourced more sustainably.