Price targets can be helpful for investors, as they can facilitate a more structured trade with pre-determined exit levels. Of course, it’s important to remember that not all stocks reach analysts’ forecasted levels.
Price targets are based on a variety of factors, including the company’s financial performance, industry trends, and overall market conditions.
And recently, three stocks – Kellogg’s K, Philip Morris International PM, and Ulta Beauty ULTA – have all seen favorable upgrades from analysts. Let’s take a closer look at how all three currently stack up.
Kellogg’s
Kellogg’s manufactures and markets ready-to-eat cereals and convenience foods, carrying a balanced portfolio of products. The stock has seen positive earnings estimate revisions, helping land it into a favorable Zacks Rank #2 (Buy). Bernstein upgraded K shares to Market Perform from Underperform with a price target of $62 per share.
The company posted strong results in its latest release, exceeding our consensus EPS estimate by 10% and delivering a positive 2.4% revenue surprise. Kellogg’s revenue growth has remained stable, further reflected in the chart below.
Image Source: Zacks Investment Research
In addition, K shares provide a solid income stream; shares currently yield a solid 3.6% annually, well above the Zacks Consumer Staples sector average. The company has continued to increasingly reward its shareholders throughout the years, as we can see in the chart below.
Image Source: Zacks Investment Research
Philip Morris International
Philip Morris International is a leading international tobacco company working to deliver a smoke-free future, evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. Citi upgraded PM shares from Neutral to Buy with a new price target of $117 per share.
Like Kellogg’s, Philip Morris rewards its shareholders handsomely; the company’s annual dividend presently yields a sizable 5.3%, with the payout growing by nearly 3% over the last five years.
Image Source: Zacks Investment Research
In addition, shares don’t appear stretched regarding valuation, with the current 15.4X forward earnings multiple sitting in line with the five-year median and well below the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
Ulta Beauty
Ulta Beauty is a leading beauty retailer in the United States, with a vast product catalog that includes cosmetics, fragrances, skincare, hair care, bath and body products, salon styling tools, and more. Loop Capital upgraded ULTA shares to Buy from Hold with a $520 per share price target.
The company’s 65.6% trailing twelve-month return on equity is undoubtedly worth highlighting, reflecting higher efficiency in generating profits from existing assets relative to peers.
Image Source: Zacks Investment Research
Further, the company continues to repurchase its shares aggressively, reflecting a shareholder-friendly nature. As of April 29th, ULTA had $816.5 million remaining available under the initial $2.0 billion repurchase program unveiled in 2022.
Image Source: Zacks Investment Research
Bottom Line
Price targets can help investors structure a trade, as they reflect current sentiment around the stock. Of course, it’s critical to remember that not all stocks reach analysts’ forecasted levels.
And recently, all three stocks above – Kellogg’s K, Philip Morris International PM, and Ulta Beauty ULTA – have received favorable upgrades from analysts.
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Free: See Our Top Stock And 4 Runners Up
Philip Morris International Inc. (PM) : Free Stock Analysis Report
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
Kellogg Company (K) : Free Stock Analysis Report
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