In this article, we discuss the 5 stocks that analysts are increasing price targets of. If you want to read our detailed analysis of these stocks, go directly to Analysts are Increasing Price Targets of Tesla and 9 Other Stocks.
5. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders: 44
Teradyne, Inc. (NASDAQ:TER) soared over 6% last week as the firm topped market expectations on earnings for the third quarter. The company, which sells automatic test equipment used by semiconductor manufacturers, has benefited from the surge in chip prices this year on the back of supply chain constraints and increased post-pandemic demand. The increased investment from the government in chipmakers, including $50 billion from the recent Biden infrastructure plan, is another growth catalyst for the firm.
On October 28, investment advisory Craig-Hallum upgraded Teradyne, Inc. (NASDAQ:TER) stock to Buy from Hold and raised the price target to $138 from $120, noting that the firm had posted better than expected results and guidance in the third quarter.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Teradyne, Inc. (NASDAQ:TER) with 128 million shares worth more than $544 million.
4. Xilinx, Inc. (NASDAQ:XLNX)
Number of Hedge Fund Holders: 59
Xilinx, Inc. (NASDAQ:XLNX) recently posted earnings results for the third quarter, beating market expectations on earnings per share and revenue by $0.16 and $45 million respectively. The firm has been acquired by chipmaker AMD in a deal worth $35 billion and is awaiting the formal go-ahead for merging into AMD. The purchase has been received positively by the market, with AMD price targets also raised recently by analysts to reflect the strength of the company after the merger.
Truist analyst William Stein raised the price target on Xilinx, Inc. (NASDAQ:XLNX) stock to $180 from $143 but maintained a Hold rating on October 28, noting that the firm had posted strong quarterly results with broad sales upside across end markets.
At the end of the second quarter of 2021, 59 hedge funds in the database of Insider Monkey held stakes worth $4.1 billion in Xilinx, Inc. (NASDAQ:XLNX), up from 57 the preceding quarter worth $3.5 billion.
3. Lantronix, Inc. (NASDAQ:LTRX)
Number of Hedge Fund Holders: 5
On october 5, Lantronix, Inc. (NASDAQ:LTRX) had announced that it would be expanding connectivity services with site-to-site Virtual Private Network security. The services of the company are available in more than 180 countries around the world and the new security initiative will help customers with IoT-related data connectivity. The firm beat market expectations on earnings in the fourth fiscal quarter.
On October 28, investment advisory Needham maintained a Buy rating on Lantronix, Inc. (NASDAQ:LTRX) stock and raised the price target to $13 from $7, touting the accelerating investment in industrial IoT.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in Lantronix, Inc. (NASDAQ:LTRX) with 691,864 shares worth more than $3.5 million.
2. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 87
Thermo Fisher Scientific Inc. (NYSE:TMO) recently assumed operational charge for a bio manufacturing facility in Switzerland. The responsibility comes through a deal that the firm made with CSL Limited in 2020. Initially, the company plans to use the site to support the manufacturing of Idelvion, a CSL Limited product for hemophilia patients. The firm plans to expand this to include other products in the near future.
On October 28, investment advisory SVB Leerink maintained an Outperform rating on Thermo Fisher Scientific Inc. (NYSE:TMO) stock and raised the price target to $685 from $675, noting that the firm had delivered another strong quarter of earnings.
At the end of the second quarter of 2021, 87 hedge funds in the database of Insider Monkey held stakes worth $7.3 billion in Thermo Fisher Scientific Inc. (NYSE:TMO), up from 79 in the preceding quarter worth $6.2 billion.
In its Q2 2021 investor letter, DEVON Equity Management, an asset management firm, highlighted a few stocks and Thermo Fisher Scientific Inc. (NYSE:TMO) was one of them. Here is what the fund said:
“The broad response to the COVID pandemic from the healthcare, pharmaceutical, and life science industries has been nothing short of incredible.
Whilst Vaccine makers understandably garner the highest profile, Thermo Fisher (6.2% of NAV) should be considered one of the outstanding performers, reflected in their ‘COVID related revenue’ hitting US$9.4bn in the 12 months since March 2020 (we appreciate measuring ‘contribution’ to the pandemic by ‘dollars’ generated is a little crude – but ultimately it does tell us something).
Ever the short-termist, Mr Market has looked to the inevitable slowdown in COVID related revenue uneasily – questioning whether it might mean a decline in Earnings come 2022. These concerns resulted in TMO shares declining 5% since their November 2020 peak, the worst performer of our Top 10 holdings.
Fortunately, we look at the COVID dynamic for Thermo in the diametrically opposite fashion.
We think Thermo’s response to COVID has bolstered their competitive positon in multiple verticals, and meaningfully enhanced the long term earnings potential of the company:
Firstly, Thermo came from ‘also-ran’ to leading player in diagnostic testing in 6 months. In ordinary times, this might be expected to take 5+ years. As demand for COVID testing inevitably declines, the capacity Thermo built during 2020 will be filled with demand from non-COVID diagnostic tests, a fast growing area before the pandemic with improved prospects in light of the role testing is playing in the COVID response.
Secondly, Thermo invested heavily…”[read the entire letter here]
1. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 91
ServiceNow, Inc. (NYSE:NOW) recently posted earnings results for the third quarter, reporting earnings per share of $1.55, beating estimates by $0.16. The revenue over the period was $1.5 billion, up 32% year-on-year and beating predictions by $30 million. Perhaps the biggest surprise was the increase in subscription revenue, which stood at $1.427 billion against consensus estimates of $1.41 billion.
KeyBanc analyst Michael Turits kept an Overweight rating on ServiceNow, Inc. (NYSE:NOW) stock on October 28 and raised the price target to $765 from $718, highlighting the “solid” earnings beat of the firm in the third quarter.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Lone Pine Capital is a leading shareholder in ServiceNow, Inc. (NYSE:NOW) with 2.4 million shares worth more than $1.3 billion.
In its Q1 2021 investor letter, Palm Capital, an asset management firm, highlighted a few stocks and ServiceNow, Inc. (NYSE:NOW) was one of them. Here is what the fund said:
“ServiceNow provides software solutions to structure and automate various task and processes for large businesses. The company began in 2004 with a solution to help businesses manage the IT services they offer employees and customers. Unlike the existing solutions in the market, ServiceNow’s offering was built using modern architecture that was flexible, modular, and user-friendly. And it left the incumbents – large companies such as BMC, IBM and MicroFocus – playing catch up.
As the company grew to dominate this market, it saw the opportunity to expand its offering to include the broader task of IT Operations Management – or the monitoring and control of an entire business’s IT infrastructure. And over time its success in improving productivity and user experience in IT resulted in customers asking the company to expand its offering into other business workflows including HR Management and Customer Services – which it has since done.
All ServiceNow’s applications (including those built by customers and third parties) are built on its ‘Now’ platform. This allows the company and its customers to innovate and deploy new solutions quickly. And it helps ServiceNow gather a large amount of data to gain insights into and use machine learning to build solutions to meet customer needs in other areas. Crucially, this platform can interface with other SaaS and legacy software services used by its customers. Not only does this allow an IT department to manage all the myriad software services used by a business from a single point of control, it also reduces the operational disruption risk for those transitioning from legacy software systems to the cloud.
Aside from the ease of use of ServiceNow’s offerings, the other factor driving its growth is that its ‘land and expand’ strategy starts in the IT department of customers – the very department whose task it is to recommend other software solutions for businesses. It is therefore no surprise that more than 75% of ServiceNow’s customers use more than one of its products and 80% of its new business is from existing clients.
The company now serves…”[read the entire letter here]
You can also take a peek at 10 Companies that Benefit From Crypto Mining and 12 Best Artificial Intelligence Stocks To Invest In Right Now.
