Analyst upgrades and downgrades with associated price targets can be valuable tools for investors, providing guidance and injecting optimism about future performance. While stocks may not always reach these targets due to unforeseen circumstances, the positive sentiment shift is noteworthy.
AbbVie (ABBV)
Recently, AbbVie received an upgrade to Outperform from William Blair, along with a fresh price target of $190 per share, signifying approximately 15% potential upside. This upgrade closely precedes the company’s upcoming quarterly release, expected this Friday, February 2nd.
AbbVie has consistently outperformed earnings expectations, demonstrating strong performance across its non-Humira growth platform, leading to an uplift in its guidance for FY23. Furthermore, as a member of the elite Dividend Aristocrats club, AbbVie currently offers a solid 3.8% annual yield and upholds a sustainable payout ratio of 50%.
Although trading at a premium relative to historical levels, AbbVie’s current forward earnings multiple of 14.5X compares favorably to the Zacks – Large Cap Pharmaceuticals industry average of 18.9X.
Hershey (HSY)
Following an upgrade to Outperform from Bernstein, Hershey received a price target of $235, indicating over 20% potential upside. Despite a challenging year with shares down approximately 12%, Hershey maintains a shareholder-friendly profile, featuring a 10% five-year annualized dividend growth rate.
Consensus expectations for Hershey’s current year project 12% earnings growth on 8% higher sales, with further growth anticipated in FY24.
Dollar Tree (DLTR)
JPMorgan upgraded Dollar Tree to Overweight and raised its price target to $157 per share, implying an 18% potential upside. Demonstrating relative strength over the last three months, with shares up 21% compared to S&P 500, Dollar Tree is poised for solid growth in its next quarterly release, with a forecasted 13% increase in year-over-year earnings on 12% improved sales.
Key Takeaways
Analyst price targets serve as useful tools for investors, instilling positivity about future performance, though their attainment is not guaranteed. For investors seeking stocks with favorable analyst coverage, AbbVie (ABBV), Hershey (HSY), and Dollar Tree (DLTR) all stand out as promising options.
