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As the earnings season has come, analysts have picked up three companies with renewed price targets over some fundamental and financial improvements taking place. Take a look at what has changed for Intel, BioMarin and Avid Technology.
Wall Street indices have rallied pretty well at the beginning of 2021. Over the last week, the US stock market remained under a bit of pressure as Wall Street awaits the approval of the $1.9 trillion COVID-19 relief package proposed by the Biden administration. Although there’s a bit of optimism around the new stimulus, the subdued jobs data has kept the market on the edge. While the Biden administration will take charge soon, market analysts are keeping a close eye on earnings season. Ignacio Cantos, investment director at ATL Capital in Madrid said the earnings season will provide markets the next catalyst. Analysts have given the top stocks to watch out for the earnings season. These stocks are Intel Corporation (NASDAQ: INTC), BioMarin Pharmaceutical Inc (NASDAQ: BMRN), Avid Technology Inc (NASDAQ: AVID).
After last week’s new management shake-up, analysts are positive about the INTC stock going forward. Last week, Intel revealed that VMware CEO Pat Gelsinger and firmer Intel CTO shall be replacing current CEO Bob Swan. Intel stock has already surged 10% since then. However, JPMorgan analyst Harlan Sur believes that there’s more rally left ahead of INTC stock. Thus, the analyst has given a buy rating with a target price of $70.
Intel has already stated that its Q4 2020 revenue and EPS shall surpass its previous guidance. This comes on the backdrop of the strong progress of its 7nm process technology.
“Looking ahead, we anticipate better than seasonal demand for PCs and for cloud data center investments to inflect positively in 1H21, which bodes well for Intel. We also note that during the CES, Intel announced that Ice Lake (10nm) is in production… we believe Intel has a strong roadmap of future products and, assuming, they can execute on their roadmap without further delays, we think the company will stem share loss,” Sur commented.
Another company that is in the row with Intel is the biotech company BioMarin. It released its top-line Phase 3 results for the company’s gene therapy Roctavian (valrox). Roctavian has been designed to treat hemophilia and has delivered favorable results in the primary endpoint of a reduction in the mean annualized bleed rate (ABR). The ABR is down 84% against the standard of care.
JPMorgan analyst Cory Kasimov has given a buy rating for BioMarin stock with a target price of $131. “Roctavian demonstrated mean FVIII of 42.9 in the modified ITT population, which we believe is clearly better than prevailing assumptions (at least based on our conversations),” the analyst noted. Kasimov said that the outcome supports the “approvability of Roctavian”.
“Either way, however, we believe these results meaningfully de-risk the asset and add to the company’s overall strategic value. We underscore BioMarin’s attractive valuation (trading slightly above the base business) and expect the pipeline to have a meaningful contribution to share performance in 2021,” Kasimov opined.
Avid Technology, the media company has recently announced its debt refinancing that has a $180 million in term loan and a $70 million unfunded revolving credit facility. Maxim Group’s Jack Vander Arde has given a buy rating for the stock bumping its target from $14 to $23.
The analyst notes that the debt refinancing cuts the company’s annual interest expense by roughly $10 million. Besides, it also adds an incremental $0.20 to non-GAAP EPS in 2021.
“While we hold a cautious view for non-recurring product sales in 2021, we continue to expect robust growth in services segment revenue as early-stage subscription revenues continue to ramp at an accelerated pace (up 74% year-over-year in 3Q20, representing ~20% of total 3Q20 revenue). We also remain highly confident in management’s ability to execute on margin expansion and free cash flow generation, even despite near-term top-line pressure from COVID-19 on some of AVID’s core verticals (live events, music festivals/ concerts), which we anticipate will gradually recover by 2H21,” Vander Aarde explained.
The analysts are quite optimistic about Avid, Intel and BioMarin. Let’s wait and see what will happen next. Other news from the stock markets can be found here.