Broadcom (AVGO)
Analysts at CitiGroup have maintained their Buy rating and raised their price target for Broadcom to $475 which is a 45% increase forecasted for the next year. AVGO has a high valuation with a Price to Earnings ratio of 67, but with four recent earnings beats and EPS growth estimates as high as +79% over the next 12 months; we think it’s safe to say that it’s current valuation is justified. To top it off, the semiconductor industry as a whole is expected to grow at a compound annual growth rate (CAGR) of around 8-13% out to 2030 which makes Broadcom a serious growth stock contender. We have put AVGO as a medium risk, high reward stock and maintain a Strong Buy rating.
Arvinas (ARVN)
CitiGroup has raised their price target on ARVN to $18 which now represents a potential upside of +35% one year from today. ARVN has missed its latest earnings call and has seen plenty of downside earnings revisions from analysts recently, so it’s interesting to see CitiGroup putting their targets in the opposite direction. Analysts are forecasting decent revenue growth over the next few years but don’t expect it to become profitable until at least 2030. However, by their nature pharmaceutical stocks are known to be incredibly volatile and there is a chance it could turn a profit sooner, but this risk factor is something that should be taken into account if one considers adding it to their portfolio. We put ARVN as a high risk, low return stock and have rated this a Strong Sell with a. -70% one year growth forecast.
Agios Pharmaceuticals (AGIO)
Maintaining their Buy rating, CitiGroup has just raised their AGIO price target to $47 which would mean an incredible +74% upside over the next year. However, like ARVN – they have decent revenue forecasts but are currently not profitable and don’t expect to be for quite some time. Down over 24% in the past 6 months despite beating recent earnings calls, Agios is currently facing regulatory threats and shares the same risk factor as other pharmaceutical companies. The average analyst rating for Agios is a Strong Buy with a +44% one year forecast. We have put AGIO as a high risk, medium reward stock and maintain a Strong Buy rating with a +110% one year forecast.
