HALISTER: BARRON’S ROUNDUP: GM, Ford May Rise 25%; Sarepta, Intel Upsides

BARRON’S ROUNDUP: GM, Ford May Rise 25%; Sarepta, Intel Upsides

(Bloomberg) -- Investors should expect shares of U.S. automakers General Motors (GM) and Ford (F) to rise by at least 25%, according to a Barron’s April 18 cover story. Other findings:
  • Both automakers trade at steep earnings and cash flow discounts to the S&P 500, with Ford valued at 6.6 times expected 2016 earnings and GM at 5.6 times. Both pay hefty dividends, 4.9% for GM, 4.6% for Ford.
  • GM will see sales of new and redesigned products rise to 40% of total volume in 2016 through 2019, up from 25% in 2010 to 2015.
  • GM now sells more vehicles in China, 3.61 million last year, than in the U.S., where it sold 3.08 million. Ford sold 1.12 million vehicles in China in 2015; average U.S. transaction price was $33,900 during the year, up $1,200.
Other highlights from this week’s Barron’s (subscription required):
  • Sarepta Therapeutics (SRPT) “could easily double” if the FDA grants accelerated approval for eteplirsen, a drug for the treatment of Duchenne muscular dystrophy, Barron’s reported. An advisory committee meets April 25 to consider the treatment, and a final FDA decision is expected by May 26. Sarepta shares “could begin to move before the announcement is made,” Barron’s said.
  • Intel (INTC) investors could see a 25% rise in a year, plus a 3.3% dividend yield, if the chipmaker’s server business can grow larger than its personal computer business, Barron’s said. The company, which can return to earnings growth by stabilizing the PC decline as server sales surge, is scheduled to report quarterly results after Tuesday’s close.
  • Sealed Air (SEE), the maker of Bubble Wrap, could jump 30% to $63 in the next year, according to Credit Suisse analyst John McNulty, “based on continued core growth, pricing discipline and cost-cutting.” Earnings may rise on “stronger revenue and slowing capital expense” following a restructuring and rebranding campaign, Barron’s said.
  • Aerojet Rocketdyne (AJRD) could be worth $35 a share, according to a sum-of-the-parts analysis conducted by Jeremy Breindel of Royal Capital Management, a hedge fund. Its defense business alone is worth $21 a share, according to the analysis.
  • TAL Education (XRS), which provides private tutoring in math and science in China, could expand its business to 100 cities from 25, said Kristian Heugh, who manages the Morgan Stanley Global Opportunity Fund.
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
F US (Ford Motor Co)
GM US (General Motors Co)
INTC US (Intel Corp)
SRPT US (Sarepta Therapeutics Inc)
AJRD US (Aerojet Rocketdyne Holdings Inc)

People
Jeremy Breindel (Royal Capital Management LLC/NY)
John McNulty (Credit Suisse Securities USA LLC)
Kristian Heugh (Morgan Stanley)

To de-activate this alert, click here

UUID: 7947283