After a few warnings from other retailers some consider quasi-peers, a number of analysts and investors are looking at Tractor Supply shares as being vulnerable to a pullback beyond the 11 percent they've given up in the past month. Gene Marcial has a rundown of the conflicting sentiments while Barron's says Tractor Supply is still expensive on just about any measure.
Few retailers were likely more direct beneficiaries of the unusually clement weather in the first quarter, which pulled forward the planting-and-mowing season, helping Tractor Supply's same-store sales jump 11.5% and average sales ticket rise 7.1%.
Meanwhile, Stephens Inc. has launched coverage of the Brentwood-based company with an 'overweight' rating and $107 price target. That brings to 14 the number of analysts with 'buy' or equivalent ratings; there are eight others who suggest investors 'hold' the stock.
Denise Chai at Bank of America Merrill Lynch has no such qualms about Dollar General shares. She has lifted her recommendation for the discount retailer's stock to 'buy' and now sees it climbing to $60. The company, she said, should show solid same-store sales growth for the foreseeable future. Dollar General (Ticker: DG) shares closed Friday trading at $52.60 and have climbed almost 30 percent so far in 2012.
Bank of America analyst Vincent Sinisi has done his Q1 channel checks and says the numbers look good for Tractor Supply. The warmer weather looks to have boosted sales, leading Sinisi to lift his earnings estimates and price target — at $103, his is now the highest on the Street. Tractor Supply shares (Ticker: TSCO) have climbed 32 percent year to date and 45 percent in the past 12 months.
Another local high-flying stock may face a little headwind following regulators' decision to delay the implementation of a new diagnostic coding system. Richard Close at Avondale Partners says the proposal to push back the deadline for ICD-10 by a year to October 2014 takes away a near-term growth driver for HealthStream and a few other health IT companies. But, he adds, "a 1-year delay will not meaningfully impact providers schedules for the most part; however, this delay definitely takes some of the urgency out of the equation." HealthStream (Ticker: HSTM) has run up about 30 percent in 2012.
Bank of America Merrill Lynch has added Dollar General to its list of most recommended U.S. shares. Analyst Denise Chai says the Goodlettsville-based retailer will continue to make market-share gains and fully deserves a higher valuation than its peers. She has raised her price target to $56, the highest on the Street.
In addition, DG is expected to further optimize its capital allocation, leading to higher returns, buyback support and a lower cost of capital. We are raising our estimates and PO given our increased confidence in the company.
Dollar General shares (Ticker: DG) closed Tuesday trading at $47, just shy of their all-time high. They've risen 14 percent year to date.
Elsewhere at BofAML, analysts have upgraded shares of Noranda Aluminum to 'buy' from 'neutral' now that former majority owner Apollo Management has completed a secondary offering. That sale, they say, removes an overhang that has pushed Noranda (Ticker: NOR) down 18 percent in the past month.
Delek US Holdings may have climbed 50 percent since early December, but Tracey Ryniec at Zacks points out that there's still plenty of value in the parent of Mapco Express and owner of two mid-continent refineries. Now that the market's anxiety over crack spreads has subsided and analysts are hiking their earnings estimates, she says, Delek's low valuation ratios look inviting. Delek (Ticker: DK) closed Tuesday's session at $15.14, up about 1 percent on the day.
Saying they have "trouble seeing the downside of [a] limited class action treatment," Seventh Circuit Court of Appeals judges have ruled that a group of African-American Merrill Lynch investment brokers can move forward with a class action that alleges the firm's teaming-up policies created a discriminatory environment. Nashville broker George McReynolds first filed suit against Merrill in 2005. His case was turned down two summers ago by a Chicago District Court judge.
Bank of America has relaunched its coverage of shares of Noranda Aluminum with a 'neutral' rating and a price target of $11. But that's not doing the stock (Ticker: NOR) any favors today: It's down about 3 percent to near $8.50.
The 64% stake still held by private equity sponsor Apollo is an overhang, in our view, but we think it is more than discounted in its low multiple relative to peers. Investors may also worry about single smelter risk, with more potential disruption to operations, but in our view disruption likelihood is low and priced in already.
Two of Middle Tennessee's publicly traded manufacturers have been on the sharp end of some analyst moves in recent days. At RBC Capital Markets, Stephen Atkinson lowered his rating on Louisiana-Pacific (Ticker: LPX) to 'sector perform' from 'outperform' but kept his $8 price target. Scotia Capital's Benoit Laprade has made a similar move — from 'sector perform' to 'underperform' — but actually raised his target slightly to $8.25.
Over at Bank of America Merrill Lynch, Oscar Cabrera has lowered his price target for shares of Noranda Aluminum to $8 from $10, 50 cents below where the stock (Ticker: NOR) is changing hands this morning. The culprit: A lower forecast for 2012 aluminum prices.
Analyst Stephen Anderson at Miller Tabak says things are looking up for Cracker Barrel Old Country Store, which Tuesday reported fiscal first-quarter earnings it said reflected the progress it's making in driving traffic. On top of that, continued cost management means it's time for investors to step in. "In our view, the retreat on Cracker Barrel's share price does not reflect weakness in the company's fundamentals, and thus we recommend buying on the decline," Anderson wrote in hiking his price target to $56 from $53.
No surprise here, but HCA on Wednesday said that its three directors associated with Bank of America Merrill Lynch stepped down after the hospital giant bought back $1.5 billion of its shares. The company's board has been reduced in size to 12.
- ALEX B FRUIN INHERITANCE TRUST; CANDACE F STEFANSIC INHERITANCE TRUST; CANDANCE F STEFANSIC INHERITANCE TRUST; FRUIN, ALEX B TRUSTEE; FRUIN ALEX B INHERITANCE TRUST; STEFANSIC, CANDACE F TRUSTEE; STEFANSIC CANDACE F INHERITANCE TRUST; STEFANSIC CANDANCE F INHERITANCE TRUST
- ROSS, BRIDGETT D
- COOKE, ETHEN LANYARD TRUSTEE; COOKE, ETHEN LEWIS ESTATE
- JACOBS, JESSICA ALEXANDRA; JACOBS, ERIKA BESS