31 January, several securities that have sagged since the beginning of the year rose by more than 10% after the revision of investment banks' estimates. Here are the experts' arguments.
Tesla (TSLA) — 936,7 $ per share (+10,7%)
Credit Suisse upgrades Tesla stock to outperform from neutral. The bank said: The current pullback is a good opportunity to buy stocks, which should recover in the coming months. Credit Suisse's goal is 1025 $ per share.
26 January, the company reported better than expected and reported record revenue and profit. Tesla sold 309,000 cars in the fourth quarter. It's on 71% more, than a year ago. Also increased margins: gross — from 19.2 to 27,4%, operating room with 5,4 to 14,7%.
“Tesla unexpectedly increased margins, largely due to cost reduction. And we believe, that this margin is quite stable”, - added Credit Suisse.
In its report, Tesla also said, that sales were negatively affected by the shortage of microcircuits: “Due to supply disruptions, our factories have been operating at less than full capacity for several quarters.. apparently, in 2022 the situation will remain the same". The auto company has postponed the release of new car models, including pickup Cybertruck, until at least 2023.
Even after recent gains, auto companies are worth about 20% cheaper, than at the beginning of the year. In anticipation of tightening monetary policy FED investors began to get rid of the shares of expensive companies, and Tesla's capitalization for January fell from 1,2 up to $0.9 trillion.
Netflix (NFLX) — 427,1 $ (+11,1%)
Citi upgrades Netflix stock to Buy from Neutral, because "the fall has gone too far".
According to the bank, the company has the opportunity to painlessly increase the price of a subscription, and the share price does not reflect the prospect of growth in the number of subscribers after 2023. Despite the upgrade, experts have reduced the target for shares from 595 to 450 $.
Increasing the number of paid subscribers and the cost of a subscription are the main drivers of Netflix revenue growth. In the last quarter of 2021, the number of subscribers grew by 9%, average subscription price 7%, revenue — on 16% compared to 2020.
The result was better than expected, but the company made a weak forecast for the current quarter. According to Netflix, Only 2.5 million people subscribe to the service, although analysts expected almost 7 million users. One of the reasons for the slow growth is the high competition in the industry., Netflix said.
With recent gains, Netflix shares are worth about 30% cheaper, than at the beginning of the year.
Beyond Meat (BYND) — 65,1 $ (+15,2%)
Barclays immediately increased the rating of Beyond Meat by two notches, from “worse than the market” to “better than the market”, and the stock target is from 70 to 80 $. The bank expects, that working with catering chains can give a company a competitive advantage: "We believe, that growth potential in the food service industry is not priced into Beyond Meat's stock.".
Partnership with McDonald's and other networks will allow the company to grow steadily in the coming years, especially in the international market, said the bank.
As of the third quarter of 2021, sales in grocery stores and catering are approximately 70 And 30% of Beyond Meat's total revenue. According to Barclays, ratio may change in the future: "We acknowledge, which can take more than two years, before revenues from foodservice and retail chains begin to 50% from proceeds, but this trend seems to us obvious”.
Beyond Meat itself gives a restrained short-term forecast. Its loss almost tripled in the third quarter of 2021, up to $ 55 million, due to additional costs. For example, for transportation and storage of raw materials. As predicted by Beyond Meat, in the fourth quarter, sales will be about 85-110 million dollars. This is much less than analysts' expectations of 132 million.
Shares of Beyond Meat are now trading at about the same level., as at the beginning of 2022.
