Each day brings a flurry of analyst upgrades and downgrades, accompanied by new price targets. These can serve as valuable tools for investors, offering a roadmap and a dose of optimism regarding future performance.
Nevertheless, stock prices don’t march obediently to their targets, as unexpected events can always intervene. However, the overall shift in sentiment is the key takeaway from these upgrades.
AbbVie: A Prescription for Optimism
William Blair has upgraded AbbVie shares to Outperform and set a new price target of $190 per share, implying a 15% upside from current levels. This upgrade arrived just days ahead of the company’s next earnings release, slated for this Friday, February 2nd.
AbbVie has been consistently beating revenue and EPS expectations in recent quarters. Its last release outperformed, driven by strong performance across its non-Humira growth platform. The company also raised its guidance for FY23.
AbbVie is not just about performance – it is also in the elite Dividend Aristocrats club, offering shareholders a solid 3.8% annual yield and a sustainable 50% payout ratio.
Hershey: A Sweet Turnaround Story
Bernstein upgraded Hershey shares to Outperform, with a $235 price target suggesting a more than 20% upside. Hershey shares have struggled over the past year, trailing the general market by about 12%.
Similar to AbbVie, Hershey has a shareholder-friendly aspect, with a 10% five-year annualized dividend growth rate.
Dollar Tree: A Growth Bargain
JPMorgan upgraded Dollar Tree to Overweight and lifted its price target to $157 per share, indicating an 18% upside. Dollar Tree shares have shown relative strength, gaining 21% over the past three months compared to the S&P 500’s 18% climb.
Analysts are optimistic about Dollar Tree’s upcoming quarterly release, with consensus estimates forecasting a 13% year-over-year growth in earnings and a 12% increase in sales.
Conclusion
Although stock prices may not align precisely with their forecasted targets, the upbeat sentiment surrounding these upgrades is a significant positive. For investors seeking stocks endorsed by analysts, AbbVie, Hershey, and Dollar Tree present compelling opportunities.