Wall Street Analysts

4 Stocks Wall Street Analysts Are in Love with for 2016

Wall Street Analysts

Wall Street had quite the eventful years, with lots of ups and downs. Now that we’re well into 2016, the question many investors have on their mind is what they should or shouldn’t be investing in. After all, with so much information available and so many analysts weighing in, it can be difficult to figure out precisely who to listen to. But we’re here to help. Here are four stocks some of the most successful analysts on Wall Street are backing for 2016.

Facebook Inc

Facebook (FB) has had its ups and downs and, at one time, was considered a poor investment. However, things have changed a lot as 2016 shows. Last year, the company saw their stock go up more than 30 percent due to the increase in their user base as well as the various acquisitions it made. At the moment, Facebook has 1.3 billion users all over the world, with 63 percent of said users visiting the site every day.

Furthermore, Facebook’s Q4 and full-2016 earnings report, which was released at the end of January, showed that the company generate high revenues from advertising. However, Facebook also registered increased costs because of various long-term investments. It should be noted, though, that Facebook’s management team pointed these investments out in the Q3 earnings report. At the time, they explained that investing in Live Rail, ad technology, Atlas and Audience Network were strategic decisions and were essential to the company’s growth. They also pointed out that the payoff would take a while to materialize.

Over the last three months, Facebook has received 22 ratings from top analysts. Of these rating, 21 were bullish, while one was a neutral rating. Thus, the general consensus from the best performing analysts in the business is a rating of strong buy for Facebook.

On January 29th, Youssef Squali, an analyst of Cantor Fitzgerald who has a five-star rating for his predictions, issued his rating for Facebook. Thus, he reiterated his rating of buy but modified the price target per share from $80 to $90, which represents a 12.5 percent increase from his previous price target. On the same day, Facebook’s stock closed at a price of $78 per share, indicating a potential upside of approximately 15.4 percent.

Mr. Squali explained his decision as follows. First of all, he feels Facebook is a top pick because it continues to grow its position as one of the most engaged and largest platforms on the internet that also provides tailored marketing at scale. He also cited the continuing transferal of ad expenditure to mobile and social platforms as well as the monetization potential Facebook still has to unlock for Messenger, Instagram and WhatsApp as reasons he considers the company to be a great investment for 2016.

Facebook’s current valuation is $213.37 billion.

Gilead Sciences, Inc.

Gilead Sciences (GILD) experienced an incredible breakthrough at the beginning of 2016 when they launched Sovaldi. The latter is a drug used to treat people suffering from hepatitis C. Furthermore, in October 2016, Harvoni received approval from the FDA. Harvoni is also used to treat hepatitis C, but it has been shown to cure the disease completely within 8 weeks of continuous treatment.

Gilead signed a deal with CVS Pharmacies at the start of 2016 that means this drug-store chain has exclusive rights to sell Gilead’s hepatitis C treatments. Harvoni will feature on the pharmaceutical chain’s list of preferred drugs. Customers will be able to access the drug through Medicaid, parts of Medicare and the Affordable Care Act.

Gilead Sciences has received 14 ratings over the last three months. All ratings were bullish, which has led to a consensus from top analysts of a rating of strong buy for the firm.

Alan Carr from Needham, a top-rated analysts, recently maintained his rating of buy for Gilead Sciences. The analyst issued his rating on the 28th of January, just ahead of the company issuing their Q4 2016 financial results, which came out on the 3rd of February.

He stated that the superiority of Sovaldi and Harvoni to competing agents would lead to the drugs gaining a dominant market share. Thus, sales of the two drugs are expected to do very well in terms of sales. He further explained that safety data and efficacy in the real world were expected to provide further support to Harvoni’s performance, and thereby improve sales significantly from the originally estimated figures.

At the moment, Gilead Sciences has a valuation of $151.1 billion.

Alibaba Group Holding Ltd

Alibaba Group Holding (BABA) operates in the e-commerce segment. The company has had a meteoric rise, generating incredible results quarter after quarter, and 2016 is lining up to be no different. The company broke a lot of records, including the biggest initial public offering in history, which took place in August, 2016. Since that time, the company has seen their stock value go up by approximately 32 percent.

Despite being criticized for not acting against people selling fake goods, as well as various other illegal activities being carried out on their site, including bribery, the company is still in the lead in the e-commerce market in China, which has seen and continues to see massive growth.

In the most recent earnings report Alibaba issued, the company experienced a 49 percent growth in gross merchandise volume (GMV), which amounted to $127 billion. It’s interesting to note that 42 percent of this figures was generated through mobile devices. Furthermore, the company saw their mobile MAUs (monthly active users) double, reaching 265 million people.

Alibaba has received 16 ratings from top-rated analysts over the last three months. Of these ratings, 15 were bullish, while only one was neutral. Thus, the consensus from top analysts for this e-commerce giant is a rating of strong buy.

Gil Luria, a five-star analysts, maintained a rating of outperform rating for the company. The price target was set at $115. The main reason cited for this decision was that the stock provides an attractive combination of profitability, size and growth at a global level.

Alibaba has a current valuation of $216.65 billion.

Biogen Idec Inc

Biogen Idec develops therapies to treat hematologic, neurodegenerative and autoimmune diseases. At the start of January, 2016, the company posted encouraging interim results from a study that’s in the early stages on the efficacy of BIIB037, which is meant to treat Alzheimer’s. The treatment is formulated to attack amyloid plaques that have formed in the brain. Biogen intends to move into Phase III and plans to do so aggressively. Phase III represents the most advanced stage of a study on a treatment and is usually the final step before application for approval from regulatory bodies.

Furthermore, Biogen’s profits in Q4 2016 increased by almost 100 percent thanks to the company’s various multiple sclerosis therapies generated a growth of 34 percent in revenues. Biogen’s 2016 pipeline features spinal muscular atrophy, multiple sclerosis and Alzheimer’s therapies.

The past three months have seen Biogen receive 9 ratings from top analyst, with 8 of these ratings being bullish, while one was neutral. Thus, the consensus is for a rating of strong buy from top-performing analysts.

Michael Yee, who is rated five stars as an analysts and currently works for RBC Capital, stated that he would be maintaining his rating of buy on Biogen. He feels that BIIB037 will become the drug with the most potential in treating Alzheimer’s until now, which means he foresees Biogen has a good chance of seeing a significant increase in share price, reaching $520 per share, or at minimum an increase of 37 percent, if it works.

He stated that Biogen’s pipeline is one of the most innovative considering the well-understood but transformative, higher-risk drugs it contains. This is why the potential for upside is so much greater than that of a downside. Biogen Idec has a current valuation of $91.99 billion.

 


About

Joe Duerr covers Healthcare Services, Medical Devices and small cap Biotech companies. Prior to joining Micro Cap Mag, Joe was a large cap pharma contributor at Morningstar.


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