These reports, excerpted and edited by Barron's, were issued recently by investment and research firms. The reports are a sampling of analysts' thinking; they should not be considered the views or recommendations of Barron's. Some of the reports' issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.
Kenvue KVUE-NYSE Overweight -- Price $26.30 on May 26 by J.P. Morgan We are initiating coverage of Kenvue with an Overweight rating and a December 2023 price target of $29. As the largest pure-play consumer health company in the world following its separation from parent Johnson & Johnson, Kenvue is uniquely positioned to benefit from consumer megatrends (self-care, aging).
We expect Kenvue to deliver resilient growth ahead in large addressable markets, with iconic brands that form strong consumer connections from birth in a portfolio spanning cold, flu, pain, allergy, and smoke-cessation over-the-counter medicines, skin care, mouthwash, baby care, and wound care, among others.
As a stand-alone company, we believe that Kenvue's board and management will be more focused and accountable for the growth and profitability of the business following the separation that began in 2019, with significant opportunities to scale.
At our $29 December 2023 price target, Kenvue will be valued at 16 times enterprise value to estimated Ebitda for 2024, which is approximately where Overweight-rate rated Colgate-Palmolive trades for estimated 2023.
C3.ai AI-NYSE Outperform -- Price $40.01 on June 1 by Wedbush We are upgrading C3 to Outperform from Neutral and raising our price target to $50 from $24.
While it will be a bumpy road, we believe that C3 has turned a corner and is ready to now capitalize on the $800 billion artificial-intelligence transformational opportunity over the next decade, with use cases increasing across the board and the company in a unique position to help lead the charge and monetize this looking ahead the next 12 to 18 months.
C3.ai delivered solid fiscal fourth-quarter results featuring top- and bottom-line beats. With the company aiming to be cash positive and non-GAAP profitable by fiscal 2024, we believe that this quarter was another major step in the right direction.
CSX CSX-Nasdaq Buy -- Price $30.67 on May 31 by UBS We upgrade CSX [the railroad company} from Neutral to Buy. Our analysis of interest rate changes, ISM new orders, and industrial production point to weakening and an eventual bottoming in industrial-related volumes in second-quarter 2024 or third-quarter 2024.
However, with intermodal volumes likely bottoming year over year in the second quarter, we see a path to volume growth for CSX in 2024 with intermodal growth of 4% offsetting a 1% decline in merchandise.
CSX has also realized the most significant improvement in manifest train speed (30% year over year) of all the rails, which positions CSX to capture share from trucks. With rail stocks typically bottoming several months before volumes bottom and CSX trading at only 15 times our estimated 2024 earnings per share, we believe now is an attractive entry point ahead of a potential volume inflection in 2024.
Price target: $37.
Toast TOST-NYSE Buy -- Price $20.97 on June 1 by BofA Global Research We initiate coverage of leading restaurant technology provider Toast with a Buy rating and $26 price objective. Our checks at last week's National Restaurant Association conference illustrated that Toast delivers best-in-class, cloud-native, point-of-sale software/hardware technology to the restaurant industry. Beyond point of sale, the innovative Toast platform integrates payment processing, restaurant operations, digital ordering and delivery, team and table management, payroll, lending, and reporting/analytics.
Adjusted Ebitda margins have steadily improved over the past five quarters, and Toast forecasts positive adjusted Ebitda for the second half of 2023. Free cash flow is also expected to turn positive later this year.
Ryanair Holdings RYAAY-Nasdaq Strong -- Buy Price $106.39 on June 1 by Raymond James We are increasing our earnings forecast following Ryanair's fiscal fourth-quarter 2023 report and investor meetings that we hosted last week, primarily reflecting a stronger fare environment and lower fuel forecast, partly offset by the updated fuel hedge position and greater nonfuel unit cost pressure.
Despite embedding characteristic conservatism in its fiscal-2024 outlook, near-term trends remain constructive, and the recently announced MAX-10 order combined with an increased likelihood of industry consolidation in Europe bode well for Ryanair's longer-term outlook, given its cost and balance sheet (net cash) advantage relative peers.
We continue to believe that Ryanair is well positioned to take advantage of further demand strengthening in the region as well as having a unique advantage to avoid possible shocks in the industry as peers grapple with higher debt burdens and cost pressures.
Target price: $128.
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June 02, 2023 16:30 ET (20:30 GMT)
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