Boeing and Other Quality Growth Stocks (BA, DKS, SWN)

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In a new report, the analysts at UBS have added
BoeingBA
,
Dick's Sporting GoodsDKS
and
Southwestern EnergySWN
to their list of quality growth stocks with attractive valuations. Their so-called Q-GARP (quality growth at a reasonable price) stocks all feature sustained profitability, high expectations for earnings growth and a low valuation compared to their peers. Others on the list include
AppleAAPL
,
DuPontDD
,
QualcommQCOM
and
United TechnologiesUTX
. Below we take a look at how Boeing, Dick's Sporting Goods and Southwestern Energy have fared and what analysts in general expect from them.
Boeing
This Chicago-based aerospace and defense giant received a big order from Lufthansa last week, and its shares hit a multiyear high. Boeing sports a market capitalization of about $88 billion and offers a dividend yield near 1.7 percent. Its long-term earnings per share (EPS) growth forecast is almost 13 percent. The number of shares sold short in Boeing represented about one percent of the float as of the August 30 settlement date, though that was the second lowest level of short interest in the past year. It also saw the lowest average daily share volume year-to-date. The days to cover was about two. The consensus recommendation of the analysts surveyed by Thomson/First Call who follow the stock is to buy shares. Their mean price target, or where the analysts think the share price will go, is almost seven percent higher than the current share price. That would be a new multiyear high. The share price has retreated about two percent from last week's multiyear high. It is more than 51 percent higher year-to-date. Over the past six months, the stock has outperformed competitors
General DynamicsGD
and
Lockheed Martin
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LMT
.
See also:Lufthansa Announces Mega Deal With Boeing And Airbus, Amid RestructuringDick's Sporting Goods
Last week, this sports and fitness retailer operating primarily in the eastern United States announced a five-year plan to reach $10 billion in sales. The Pennsylvania-based company has a market cap of more than $2 billion and a dividend yield near 1.0 percent. Its long-term EPS growth forecast is more than 12 percent. The short interest in Dick's Sporting Goods was more than six percent of the float at the end of August. The number of shares sold short shrank about three percent from the previous period, and the days to cover fell during the period from about five to a little more than two. Of the 30 analysts surveyed, 11 rated the stock at Strong Buy and another 12 also recommend buying shares. The analysts' mean price target indicates that they see more than eight percent potential upside. The UBS price target is more than 10 percent higher than the current share price. The share price fell more than 13 percent in August due to a disappointing quarterly report, but it has bounced back since. Shares are up more than 15 percent year-to-date. Over the past six months, the stock has outperformed
WalmartWMT
and the S&P 500.
See also:Dick's Outlines Growth Strategy, Targeting $10B In Sales By End of 2017Southwestern Energy
A director recently purchased more than 10,000 shares of this natural gas and oil exploration and production company. Southwestern Energy is headquartered in Houston and it has a market cap near $13 billion, but it offers no dividend. Its operating margin is higher than its peers mentioned below. After retreating marginally from the previous period, which was the highest level of short interest since the middle of March, the number of shares sold short represented less than four percent of the total float at the most recent settlement date. The days to cover rose from less than four to about five. Here the consensus recommendation of the polled analysts is to hold shares, and it has been for at least three months. Yet they feel shares have some room to run as their mean price target is more than 12 percent higher than the current share price. UBS sees more than 17 percent potential upside. Southwestern Energy shares are trading more than 11 percent higher year to date, though they have faced resistance above $38 since March. The stock has not only underperformed the broader markets over the past six months, but the likes of
Chesapeake EnergyCHK
and
Williams CompaniesWMB
as well.
At the time of this writing, the author had no position in the mentioned equities.
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