美股的20支股票策略

1、GlobalResearch17 December 201920 Stocks for 2020Our Highest Conviction CallsWhat is your top pick for 2020?UBS Research Management asked this question of all our analysts in NorthAmerica. Weve collected their responses and selected what we consider to be the 20 most compelling Buy- or Sell-rated inv

2、estment ideas for the year ahead. Weve focused on stockswherewebelieveouranalystshaveatrulydifferentiatedviewvs.consensus,and where we have interesting or proprietary data sources (from UBS Evidence Lab or elsewhere). Weve also considered upside (or downside) to price target, risk/reward skew,andsec

3、torweightings(toroughlymatchtheS&P500).For2020,weveselected 15 buys and 5 sells.Advancing your thinking with the UBS Research Thesis MapWeve included a UBS Research Thesis Map for each stock, outlining (1) the pivotal questionsdrivingthestock,withlinkstomoredetailedworkonthesetopics;(2)whats priced

4、in by current market expectations; (3) the UBS view of why the market may be wrong; (4) what new evidence we have uncovered; (5) the potential upside vs. downside; and (6) upcoming catalysts to watch in 2020. Finally, we provide key valuation metrics and financial snapshots for eachcompany. Equities

5、 AmericasU.S.EquityProductManagementJoseph Product Manager HYPERLINK mailto:joseph.parkhill +1-212-7133716Peter Lennox-KingProduct Manager HYPERLINK mailto:peter.lennox-king +1-212-7133215SectorSectorTotal Return to Price TargetPriceUBS (12/16/19)TargetCompanyNameRatingTickerTHCBuyTenet Healthcare C

6、orp$38$5340%HealthcareTMUSBuyT-Mobile US$75$9627%TMTGEBuyGeneral Electric$11$1426%IndustrialCTLTBuyCatalent Inc.$53$6624%HealthcareCBuyCitigroup$77$9324%FinancialsNSCBuyNorfolk Southern$191$22520%IndustrialSPGIBuyS&P Global$273$32420%FinancialsKOBuyCoca-Cola$54$6319%ConsumerAMZNBuyA$1,769$2,10019%TM

7、TLOWBuyLowes$120$14018%ConsumerAXSBuyAxis Capital Holdings$60$6918%FinancialsHASBuyHasbro Inc.$102$11717%ConsumerAEPBuyAmerican Electric Power$93$10516%EnergyVARBuyVarian Medical Systems$143$16012%HealthcareNOWBuyServiceNow Inc$282$31010%TMTCMISellCummins Inc.$182$162(8%)IndustrialWBASellWalgreens B

8、oots Alliance Inc.$58$50(10%)HealthcareCIENSellCiena Corporation$41$34(18%)TMTSTXSellSeagate Technology$59$41(26%)TMTXSellUnited States Steel Corp$13$7(45%)IndustrialSource: UBS HYPERLINK /investmentresearch /investmentresearchThis report has been prepared by UBS Securities LLC. ANALYST CERTIFICATIO

9、N AND REQUIRED DISCLOSURES BEGIN ON PAGE 34. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report

10、as only a single factor in making their investment decision.ContentsAmerican Electric Power (AEP-Buy)3A (AMZN- Buy)4Axis Capital Holdings (AXS-Buy)5Citigroup (C - Buy)6Catalent Inc (CTLT-Buy)7General Electric (GE-Buy)8Hasbro Inc. (HAS- Buy)9Coca-Cola (KO - Buy)10Lowes (LOW- Buy)11ServiceNow Inc (NOW

11、- Buy)12Norfolk Southern (NSC- Buy)13S&P Global (SPGI-Buy)14Tenet Healthcare Corp (THC-Buy)15T-Mobile US (TMUS- Buy)16Varian Medical Systems (VAR-Buy)17Ciena Corporation (CIEN- Sell)18Cummins Inc. (CMI- Sell)19Seagate Technology (STX-Sell)20Walgreens Boots Alliance (WBA-Sell)21United States Steel Co

12、rp (X-Sell)22 HYPERLINK l _TOC_250000 SummaryFinancials23UBS Research THESIS MAP a guide to our thinkingPIVOTALQUESTIONSQ: Will the North Wind project getthrough?It is likely. North Wind is a 1,485 MW, $2B project which could add $0.10-$0.15/share. AEP settled withkeypartiesinOklahomaon45%oftheproje

13、ctandneedsatleast9%commitmentfromAR,LA orTXtomoveforward. Financingwouldinclude50%equity. ARPSCStaffsupportsmovingforward with (10%) of the project with conditions.Q: What is the outlook for transmission growth under the new FERC ROE framework?AEP projects 12% rate base growth through 2024 and for t

14、ransmission to comprise 55% of cap-ex overtheperiod. AEPhassettledfora10.35%ROEforitsPJMsystemand10.50%ROEforitsSPP systemwhichFERCapprovedinMayandJunerespectively. Theoutcomesaresimilartotherecently awarded 9.88% base ROE excluding a 50 bp added for RTOmembership.Q: Does AEP require more equity to

15、maintain its credit ratings?We think AEP does not require block equity outside of the $500M in 2022 in the plan. The company targetslowtomid-teensFFO/debtwithaccelerateddeferredtaxrecovery. Whenthecompanymoves forward with North Wind it could require additional equity but that would be a positive de

16、velopment, in our view.UBSVIEWAEPisawell-run,jurisdictionallydiverseutilityandhasatleastabove-averageEPSgrowth.Thereisa growinglikelihoodthatNorthWindwillmoveforward.AEPhasthelargesttransmissioncap-exbudget intheUSwhichprovidesreturnsabovejurisdictionallevels.Thestocktradesinlinewiththegroupbut bene

17、fitsfrombetterregulatoryjurisdictionsandgrowth.Our$105pricetargetreflectsa7%premium toRegulatedUtilitypeerson21EPS(+2%forsecondquartileEPSgrowthand+5%forregulation).EVIDENCEWith regard to North Wind AEP settlement with the Staff and Attorney General in OK and Staff inAR is supportive. AEPs transmiss

18、ion ROE settlements are within the last 6months.WHATSPRICEDIN?Webelievethestockpricesina$0.60reductiontoEPSusing22x21or5%EPSgrowth. Thiswould include an extra $1.5B of equity versus the plan.RELATEDRESEARCHWind Settlement in Oklahoma; Low-Risk UtilityUPSIDE / SPECTRUMAEP.N Price11110511110583.16 Dec

19、+12 mo.110US$93.03EPS 12/21EP/EImpliedUpside to Downside1.8 to 1.00 .00 00 =4.90 4.75 4.46 22.7xUpside: Base:Downside:+19%+13%-11%201720182019Source: UBS ResearchValue drivers5 Yr. EPSNorth WindEquityReg Ute(CY21)GrowthEPSPremium$111 upside7%$0.15-10%$105 target6%7%$83targetSource:UBS5%$1.0B0%UPCOMI

20、NG CATALYSTSForNorthWindSWEPCOTexasStafftestimonyisdue1/22andSWEPCOLouisianaisdue2/7. The fal ecson n te AEP Texas rate cae s 1. Texas ate DyamcUBS Research THESIS MAP a guide to our thinkingPIVOTALQUESTIONSQ: Can Amazon continue to drive top line momentum?Yes.WebelievestrongPrimemembergrowth(esp.in

21、Intl)andfastsellerFBAadoptionwillcontinue toadvanceAmazonsPrime+FBAflywheeleffectthatislikelytobesupportiveofa17%revgrowth CAGR(18-23).Whileweexpectinvestmentsinits1-dayshippinginitiativetocontinueinto2020,we think the scale of efficiency gains paired with potential revenue upside (in both US & Intl

22、) is not yet well understood by investors. Further, beyond AWS, we believe Amazons growing advertising business should contribute to sustained top linemomentum.Q: Can Amazon stabilize/expand OI margins over the next few years?We believe Amazon will continue investing in multiple growth opportunities

23、 (1-day shipping, AWS, licensed&originalcontent,logistics,India,etc.).However,weexpectgrossprofitdollargrowth(driven by3P,AWS,andadvertisingmixshift)willallowforlong-terminvestments&marginexpansion.Q: Can AWS sustain high revenue growth along with maintaining/expanding OI margins? Yes.AWShas(andwill

24、maintain,inourview)thedominantpositionintheInfrastructure-as-a-Service (IaaS) market and increasingly within Platform-as-a-Service (PaaS) & other IT spending pools. Our estimates assume AWS revenue will grow at 26% CAGR (2018-2023E), while margins continueto stabilize.UBSVIEWDespite investor fears a

25、round OI margin pressure in the short-to-medium term (mainly due to 1-day shipping&AWSinvestments),weremainconstructiveonAmazongiventhecompanysstrongmarket positioninginkeyverticalsincl.eCommerce,cloudcomputing,digitaladandmediaconsumption.EVIDENCE3rd party data and early channel checks on the 2019

26、Holiday season point to AMZN emerging as winning in eCommerce & digital advertising (link). Additionally, the latest UBS Evidence Lab US consumersurvey(link)pointstoahealthyPrimeecosystemwithstabletogrowingusagetrendsfrom existing subscribers and oppty to increase wallet share in an overall retail e

27、nvironment where eCommerce continues to gain share.WHATSPRICEDIN?Atcurrentvaluation,wethinkinvestorconcernaroundforwardmarginpressureduetoinvestmentsin AWS and 1-day shipping are largely priced in.RELATEDRESEARCHRinging In a Season of Mobile Acceleration |Examining the AMZN Consumer (2019) |Framing

28、the Forecast for the Global Clouds (2019)UPSIDE / SPECTRUMAMZN.O Price3065.002100.003065.002100.0016 Dec935.00+12 mo.2017201820193,000US$1769.21Upside to Downside1.6 to 1Upside:Base:Downside:+73%+19%-47%Source: UBSValue drivers(2019E)NAIntl AWS GAAPEBITDAMargin$3,065upside25%17%41%12.7%$2,100target2

29、1%13%36%12.1%$935target17%9%31%11.0%Source: UBSUPCOMING CATALYSTSAnyupdateonthe2019HolidaySeasonperformance;Quarterlyearningsreports(esp.Q4inJan/Feb).UBS Research THESIS MAP a guide to our thinkingPIVOTALQUESTIONSQ: What impact does price firming in E&S and Lloyds marketplace have on AXISs earnings?

30、 Meaningful. Axis has one of the highest concentrations among North American P&C insurers of businessexposedtofirmingpricingconditionsinU.S.excessandsurpluslines(E&S),professionallines andatLloyds. Weestimatethefavorablepricingenvironment,coupledwithcontinuedcostsavings, will likely contribute to 15

31、0 bps of underlying underwriting margin improvement in 2020 and another 60bpsin2020. Our2020combinedratioestimateisinlinewithconsensusand2021iscurrently60 bpsbelowconsensusat97.5%. Every100bpsofimprovementinAXSsunderwritingmarginin2021 equals $0.56 per share.Q: Is a double-digit ROE attainable in 20

32、20?We are forecasting a 9.7% operating ROE x/ AOCI in 2020 and 10.2% in 2020, driven primarily by pricinginexcessoflosstrendandportfolioactions,increasedfeeincomefromstrategicpartners,and additionalcostsavings.Weviewourassumptionsasconservative;webelievetheleversthatwehave outlined above could produ

33、ce an ROE closer to 12% in 2021 if management is able to successfully deliver on their key business and profit improvementobjectives.UBSVIEWAXS earns a meaningful portion of its Insurance gross written premiums from U.S. E&S lines and Lloyds of London (60% of GWP) with much of the rest in the firmin

34、g professional liability lines, givingitsubstantialleveragetoimprovementsinthesemarkets.Moreover,thewideninggapbetween pricing and loss trend, reduction in run-off business, and expense savings improves the visibility of underlyingunderwritingmarginexpansionin2020andthelikelihoodofupwardearningsrevi

35、sions,in ourview.InadditiontoupsidetoEPSestimatesweseere-ratingpotentialforAXSssharesifearnings volatility moderates.EVIDENCEAxisreported+8%averagerenewalpriceincreasesacrossitsInsurancebookofbusinessin3Q19with double digit increases in excess casualty and property lines, an acceleration from 2Q19.

36、Mgmt. has stated the rate it is achieving is in excess of losstrend.WHATSPRICEDIN?AXSssharesaretradingatadiscountrelativetopeers;webelieveshareswillre-ratehigheronmgmt. actions to reduce earnings volatility and improvedROEs.RELATEDRESEARCHUpgrade to BuyUPSIDE / DOWNSIDE SPECTRUMValue driversNPEGrowt

37、hPYD(fav)/unfavROE x/AOCI$77 upside+4.4%-3.7%96.7%10.6%$69 target+3.4%-3.2%97,7%10.2%$50targetSource:UBS+1.4%-1.2%100.2%8.1%UPCOMING CATALYSTS4Q19 Earnings ReportUBS Research THESIS MAP a guide to our thinkingPIVOTALQUESTIONSQ: Can Citigroup show continued progress towards a higherROTCE?Yes.Citigrou

38、pisamongthefewbanksinourcoverageuniversethatshouldposthigherrisingROTCEs in the coming years. This reflects ongoing efficiency improvements and better results in Global Consumer Banking (GCB). We forecast that ROTCE reaches 12.6% in 2021, up from 11.8% in 2019E.Q: Can expense management drive meanin

39、gful improvements in profitability?Yes. Citigroup should realize an additional $500-$600mn of savings from ongoing efficiency initiatives. We expect expenses to remain flat in 2020 and for Citigroup to achieve 2.6 pp of operating leverage. Our forecasts have the efficiency ratio falling to 55.1% in

40、2020 and 53.2% in 2021 from 56.5% in 2019E.Q: Can profitability in Global Consumer Banking (GCB) rise?Wethinksoandthereisanupsidebiastoourestimates.Deepeningpenetrationofretailclientsinthe USandefficiencyimprovementsinMexicosuggestprofitabilityhasroomtoincreasematerially.Our estimateshaveGCBreturnso

41、nallocatedequityrisingto17.4%in2021from16.9%.Thiscouldprove conservative.UBSVIEWCiti has the potential to be a beat and raise story with multiple expansion. Citi trades at just 1.11x TBVand7.9x21Eearnings,discountstoallbankswecover. Despitetheupsidebiastoestimates,we forecastlowdoubledigitEPSgrowthi

42、n2020-2021,amongthehighestinourcoverage.EVIDENCECiti has $500-$600mn of expense savings on its $2.5bn efficiency program. The current ROTCE of12%isamongthelowestinourcoverageuniverseandsuggestsgreaterroomforself-helpmeasures to improve profitability. In addition, buying back stock at only 1.1x TBV c

43、ontributes to 9-10% annual TVPS growth.WHATSPRICEDIN?Our residual income framework suggests that the market is pricing a long-term sustainable ROE of 10.4%, below our sustainable long-term ROE of 10.6%.RELATEDRESEARCHWith the bar lowered; risk to reward profile has improved; upgrade toBuyDoing whats

44、 necessary to drive higher returns: takeaways from CEO/CFO(s) meetingUPSIDE / DOWNSIDE SPECTRUMValue drivers(CY21)Loan GrowthRevenue GrowthCost of CreditEPSGrowth$103 upside5%3-4%52-55%1.23%14-19%$93 target2%2%53-55%1.28-1.33%11-12%$69 downside-1%(-3)-(-1)%57%1.45-1.68%(-11)-(-5)%Source: UBSUPCOMING

45、CATALYSTS ThoughCitigroupwilllikelybackawayfromthe13.5%ROTCEtargetfor2020with4Q19earningson Jan 14th, (consensus is well below this figure), management is likely to reaffirm that ROTCE should move higher on operating leverage and continued buybacks at discounted multiples. An improved globaloutlooks

46、houldalsohelpCitigroup,giventhatroughlytwothirdsofearningscomefromoutside of North America.UBS Research THESIS MAP a guide to our thinkingPIVOTALQUESTIONSQ: How does the Paragon deal change CTLTs growthprofile?It should be meaningfully accretive to growth. Post this Spring 2019 acquisition, CTLT man

47、agement raised its LT revenue growth outlook to 6-8% (from 4-6% previously), while EBITDA rose to 8-11% (from 6-8% prior). Despite representing just 10% of revenues (in F20), given Paragons significant growth (we forecast 42% average next 5 years), this business should drive 50%+ of CTLTs total grow

48、th over this period. As such, it remains the key to 40% increase in CTLTs LT growth targets & should put upward pressure on the multiple.Q: Can Softgel grow at least 2% through FY21?Yes. This segment was combined with the Oral Technology segment, making comparisons difficult. Afterdecliningnearly(1%

49、)/yearoverF18-F19,guidanceassumesareboundinF20.Long-term,the shifttosmallerpatientsizesforRxdrugsremainsaheadwind,andCTLTisbackingawayfromportions of the faster growing consumer market. However, management makes a credible case that growth can be at least 2% LT (driven by its development pipeline) w

50、hich will allow investors to focus on the Biologics segment.UBSVIEWWe see another turn of multiple expansion (to 16x EV/EBITDA) driven by growing confidence in the companys 6-8% revenue growth and 9-11% EBITDA growth outlook, with biologics the key. 16x multiple is a 33% premium to CTLTs historical

51、average multiple, warranted given the companys organicrevenue&EBITDAgrowthratesarenow1.2-1.8xhigherthanpasthistory.EVIDENCEWe worked with 3rd party experts to assess a LT outlook for biologics & consulted with numerous gene therapy experts to inform our opinion on this market & Paragons position. We

52、 also looked at pipelinegrowthforgenetherapy.Lastly,wereliedonourdiligencewithL.E.K.Consulting.WHATSPRICEDIN?The stock is up 70% YTD (35% since the April Paragon deal), and the EV/EBITDA multiple has expanded over 3 turns. That said, with faster growth than most peers across Tools and Pharma Service

53、s,weseecontinuedroomformultipleexpansionasinvestorsgainconfidenceinthedurabilityof the new growth trajectory.RELATEDRESEARCHLongBiologicsRunwayAhead:IncreasePTto$64;ParagonDealMeaningfullyAccretiveToGrowth; Upgrading to Buy; Notes From The Road; Initiation: Softgel Concerns Offset Biologics Optimism

54、; NeutralUPSIDE / DOWNSIDE SPECTRUMValue drivers2- Yr OrganicGrowthShares2021EPS $85 Upside10.4%162 $2.6632.0$66 Upside7.4%162 $2.2629.2$42 Upside5.4%162 $2.0320.7Source: UBSUPCOMING CATALYSTSEarnings, gene therapy trial/market updates, and M&A (as leverage comesdown).UBS Research THESIS MAP a guide

55、 to our thinkingPIVOTALQUESTIONSQ:CanGEreachitsleveragetargetsof2.5xInd.NetDebt/EBITDA&4xCapitalD/E?Yes,weexpectGEtoreach2xInd.NetDebt/EBITDA&4xD/EforGECS.Thisshouldincreasethe focusontheoperatingbusinesseswhereweseesubstantialvaluethatiscurrentlynotpricedin.Q: GE Aviation will aftermarket strength

56、continue?Yes. Our proprietary Engine Shop Visit Unit Economics model shows the continued strength of this business with 300bps margin expansion and a 8% FCF CAGR to 2022, creating an incremental$2.4B FCF p.a. Near term we see $3B LEAP LTSA cash by 2022.Q: GE Power: Zero or Hero?Neither but we believ

57、e Power will be better than many think. We expect Power Portfolio to remain a multi-yearturnaroundandascribenovaluetothisbusinessinourSOTPcurrently.GasPower,onthe other hand should be a cash contributor going forward to the tune of $13B to2035.UBSVIEWWebelievethestockisatapositiveinflectionpointinto

58、2020,drivenby1)successfulde-levering,2) strong EPS growth of 12% & 29% in 2020/21E and 3) a tripling of industrial FCF to $2.3B in 20E led by Aviation & Healthcare. We expect cash conversion could reach 70% by 2021, following13% in2019Eand36%in2020Eandseethestocknarrativechangefromsignificantcashdra

59、gscenariosto successfultransformation.OurSOTPindicates25%upside,implyinginvestorstodaygettheequiv.of60% of Healthcare for free.EVIDENCEOur proprietary bottom up models of GE Aviation (starting with a unit economics model for engine shopvisits),GEPowerandGEHealthcaregiveusconvictioninouroperationalfo

60、recasts.Ourviewson theturnaroundprogressingwellarealsosupportedbytheUBSEvidenceLabdataonCEOapproval, employeesentimentandbusinessoutlook.WealsotestedthesensitivityofGEspension/LTCliabilities to the fall in interest rates providing insights on risks/upside to ourviews.WHATSPRICEDIN?We believe the gro