Burger King, Marvell, CarMax: Ratings Changes
BOSTON (TheStreet) -- Here are four important upgrades from TheStreet's stock model.
4.
The model upgraded restaurant owner and franchiser
Burger King
(BKC)
to "buy." During the past three years, Burger King has boosted revenue 15% annually, on average, and profit 44% a year. Its stock posted declines over the same period.
Quarter
: Fiscal second-quarter profit increased 13% to $50 million, or 37 cents a share, as revenue inched up 1.8% to $645 million. The operating margin remained steady at 14%. Burger King holds $140 million of cash and $859 million of debt.
Stock
: Burger King has dropped 12% in the past 12 months, lagging behind U.S. indices. The stock trades at a price-to-projected-earnings ratio of 14 and a price-to-book ratio of 2.6, reflecting 53% and 55% discounts to peer-group averages.
Consensus
: Of analysts covering Burger King, six, or 32%, advise purchasing its shares and 13 recommend holding them.
Deutsche Bank
and
Piper Jaffray
expect the stock to hit $24, implying a potential 18% gain in the weeks ahead.
3.
The model upgraded used-vehicle retailer
CarMax
(KMX) - Get Report
to "buy." During the past three years, CarMax's revenue has stagnated, but net income has risen 8.1% annually. Its return on equity, a profitability measure, trails the industry average.
Quarter
: CarMax swung to a fiscal third-quarter profit of $75 million, or 33 cents, from a loss of $22 million, or 10 cents, a year earlier. Revenue jumped 24%. The operating margin turned positive. CarMax holds $15 million of cash and $147 million of debt.
Stock
: CarMax nearly doubled during the past year, beating major benchmarks. The stock sells for a PEG ratio, a measure of value relative to expected long-term growth, of 0.1, a 93% discount to the industry average. A PEG ratio below 1 signifies a bargain.
Consensus
: Of researchers evaluating CarMax, four rate its stock "buy," 11 rate it "hold" and one ranks it "sell."
Rochdale Securities
expects the stock to advance 22% to $30. Less-bullish
Bank of America
projects a future share price of $28.
2.
The model upgraded
St. Jude Medical
(STJ)
to "buy." St. Jude makes equipment for the human heart, including pacemakers, replacement valves and repair products. Its stock has risen 9.8% in the past three months, beating U.S. indices.
Quarter
: St. Jude swung to a fourth-quarter profit of $190 million, or 57 cents, from a loss of $201 million, or 58 cents, a year earlier. Revenue rose 6.3%. The operating margin extended to 29%. St. Jude holds $393 million of cash and $1.9 billion of debt.
Stock
: St. Jude has climbed 7.4% during the past 12 months, trailing U.S. indices. The stock trades at a PEG ratio of 0.8, a 34% discount to the industry average and a bargain relative to projected long-term growth. It's also cheap based on sales.
Consensus
: Of analysts rating St. Jude, 21, or 62%, suggest purchasing shares, 11 advise holding and two say to sell them.
Soleil Securities
and
JPMorgan
value each share at $48, leaving a potential 18% gain. The stock has jumped 10% in three months.
1.
The model upgraded chipmaker
Marvell Technology
(MRVL) - Get Report
to "buy." It designs analog, mixed-signal and embedded microprocessor circuits. During the past three years, Marvell Technology has tripled net income annually, on average.
Quarter
: Marvell swung to a fourth-quarter profit of $205 million, or 31 cents, from a loss of $65 million, or 11 cents, a year earlier. Revenue soared 64%. The operating margin rose to 25%. Marvell holds $1.8 billion of cash and $2.5 million of debt.
Stock
: Marvell Technology has more than doubled in the past year, outperforming major benchmarks. The stock sells for a PEG ratio of 0.2, a 61% discount to the peer-group average and a bargain when considering expected growth rates.
Consensus
: Of firms following Marvell, 29, or 85%, rate its stock "buy" and five rate it "hold."
JMP Securities
and
Pacific Crest Securities
predict a future share price of $30, implying a potential 44% upside. Marvell has risen 8% in the past month.
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