Shankar expects competition among auto insurers to weigh on the industry over the next two to three years as consumers shop harder for coverage that is getting more costly. He sees Progressive as “one of the primary beneficiaries of this shift, displaying its superior economies of scale allowing them to offer the best price, and separately, taking advantage of their first-mover advantage with identifying and addressing pricing inadequacies in the face of higher inflation.” Risks include more competition on pricing and lower interest rates that lead to a decline in earning power.
Thermo Fisher Scientific
Thermo Fisher Scientific Inc. (NYSE: TMO) sells a variety of analytical, diagnostic and laboratory products and services to the health care sector. BofA’s Derik de Bruin rates the stock at Buy, with a price objective of $700. Based on Friday’s closing price of around $548.30, the upside potential to de Bruin’s target was 27.7%. The analyst notes that the company “has diversified the business and shifted into more defensive and durable end-markets.”
BofA also noted that as the COVID-19elated business winds down, the effect on Thermo Fisher should have no impact on current-year estimates, where the effects already have been priced in. Risks include a worsening global macro environment and a faster than expected decline in COVID-19elated business.
T-Mobile
T-Mobile US Inc. (NASDAQ: TMUS) gets a Buy rating from BofA analyst David Barden, along with a price target of $155. Based Friday’s closing price of around $136.80, the upside potential is 13.3%. Barden calls T-Mobile “a beat and raise stock story in the telecom space with a clear path to a massive $60bn stock buyback beginning latest in 2023.”
Subscriber growth, aided by lower churn, “is a positive tailwind for subscriber net additions and could pave the way for future positive guidance revisions.” Barden also notes that S&P has put T-Mobile on a positive CreditWatch. A credit upgrade could pull stock buybacks into this year. Risks include tougher competition, difficulties in integrating former Sprint customers, an inability to raise prices to offset inflation and sustainable growth in contract customers.
Originally posted at 24/7 Wall St.
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