Analyst: Smaller TARP raise will power more Regions gains
Count Craig Siegenthaler as a bull on Regions Financial: The Credit Suisse analyst on Friday raised his rating on the bank holding company (Ticker: RF) to 'outperform' even though it's up by more than a third since mid-November. Among the main reasons is his expectation that President and CEO Grayson Hall will raise only about $800 million to help him pay off Regions' TARP obligation, while the consensus has been well above $1 billion.
Analyst action: Hospitals, BioMimetic
Shares of HCA Holdings and Community Health Systems may not be the best long-term bet for investors eyeing the hospital space, says analyst Ralph Giaccobe at Credit Suisse. But if you're looking for a quick pop — albeit with the volatility that could swing the other way quickly — the local companies are a better idea than his overall top pick, Universal Health Services.
Collins Stewart last week became the sixth firm to formally cover shares of Franklin-based BioMimetic Therapeutics. The firm's analysts have the local stock (Ticker: BMTI) rated a 'buy' and see it climbing to $7. That rise — which would reverse about half of the stock's 2011 losses — is likely to come at the hands of the Food and Drug Administration.
Over the next couple of months, BMTI should receive official comments from FDA regarding the regulatory pathway for Augment. We believe that any clarity on the next steps for Augment would be a catalyst for BMTI shares. We recently saw this with three companies whose share prices had fallen significantly only to rise later (by 75% on average) following FDA feedback that provided visibility on the regulatory pathway.
Analyst action: HealthSpring, LP
Analyst David Windley at Jefferies has lifted to $46 his price target for shares of Medicare insurer HealthSpring (Ticker: HS) ahead of the company's investor day tomorrow. There, Windley says, execs are likely to lower their EPS guidance to reflect their recent $301 million stock sale and — more importantly — talk positively about the Medicare environment these days. That should be good for the stock, which Windley has at 'buy.'
Thinking along the same lines is Josh Rankin at Barclays, who has hiked his HealthSpring target price to $48 from $44, making him the most optimistic on the stock, which has run up from the high teens since last August. Rankin has an 'overweight' rating on HealthSpring.
Shares of construction materials supplier Louisiana-Pacific (Ticker: LPX) are down more than 3 percent today after Credit Suisse analyst Chip Dillon lowered his rating on the company to 'neutral' from 'outperform.' Dillon is keeping his $13 price target for the stock, which until this morning had risen about 10 percent year to date.
Look for 'must-own' Tractor Supply to beat Q1 estimates
Two more analyst have lifted their expectations for shares of Tractor Supply. Credit Suisse researcher Gary Balter has maintained his 'neutral' rating but now sees the stock (Ticker: TSCO) climbing to $57, up from his previous $53 estimate. Peter Benedict at Baird has gone a step further, upgrading Tractor Supply to 'market outperform' and hiking his target to $64. Benedict said the Brentwood-based retailer has the stuff grow earnings per share at a double-digit clip for the next five years and thus "deserves a premium valuation."
He also said Tractor Supply has a new focus on returning excess cash to shareholders through increased share buybacks. He predicted that first-quarter earnings per share would exceed last year's record of 14 cents and raised the share price target to $64 from $53, implying growth of 18 percent from Tuesday's close.
SEE ALSO: The less enthusiastic recent price target hike from Goldman
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