Thirsty for solid stocks with good prospects? It’s time to try the Coca-Cola stock.

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These reports, excerpted and edited by Barron’s, were recently published by investment and research firms. The reports are a sample of the analysts’ thinking; they should not be considered Barron’s opinions or recommendations. Some of the issuers of the reports have provided, or expect to provide, investment banking or other services to the companies analyzed.


Coca Cola

KO-NYSE

To buy Price $61.08 on March 7

by Edward Jones

Coca-Cola is doing a solid job of reinvigorating its core carbonated soda business, with new sugar-free offerings and smaller cans. It is a very innovative company that improves and expands its offer of energy and sports drinks. Coke continues to expand the number of markets for its smaller, faster-growing brands (eg, Costa Coffee), while seeking acquisition opportunities. It has a strong management team and an admirable long-term strategy. It is streamlining its internal operations, focusing more on digital marketing and big data, and recently phased out many small, slow-growing brands. This should help sales and profits. Coke has a strong presence in growing emerging markets, such as China. As people in emerging markets move into the middle class, they often spend more on prepackaged beverages. Coke has a tax dispute with the IRS that could be significant, but the outcome remains uncertain. Coke got less than 2% of its sales from Russia last year, but that doesn’t change our outlook. [The company has suspended its operations there, in light of the Russian invasion of Ukraine.]


Fifth Third Bancorp

FITB-Nasdaq

Surpass Price $44.74 on March 9

by RBC Capital Markets

Overall, Fifth Third’s outlook is positive, due to its balance sheet positioning for higher interest rates, growth opportunities in its loan book and strong credit quality. The company has been a good steward of capital, which we hope will continue. In 2021, all markets in which FITB operates saw year-on-year household growth: South East up 6%; Chicago, 4%; Midwest ex-Chicago, 2%. The company grew its adjusted noninterest revenue at a compound annual growth rate of 5% from 2015 to 2021, even while relying less on consumer fee revenue. Moreover, Fifth Third is the least dependent on overdraft fees among its peers.

Each of the first four rate hikes of 25 basis points [expected from the Federal Reserve] are expected to add $120 million to $140 million in annual net interest income to the business. The bank has been disciplined in underwriting and is confident that credit quality will remain strong over the next 12 to 18 months. It invests in organic growth (people, process and technology) to gain market share, continues to pay a strong dividend and conducts share buybacks. Acquisitions remain a lower priority. Our target price on the stock is $50.


nokia

NOK-NYSE

Four out of five stars Price $4.53 on March 7 by Morningstar

Nokia is a key supplier of hardware, software and services to communications service providers. CSP equipment spending offers robust growth during generational wireless upgrade cycles, followed by spending lulls, with 5G being the latest tailwind. It promises to connect billions of devices wirelessly at incredible speeds across more spectrum bands and have more uses than 4G. This may offer Nokia more advantages than previous wireless generations. However, CSPs generally use multi-source equipment and have buying power over their suppliers. Nonetheless, as spending on 4G infrastructure declines, we expect 5G developments to benefit Nokia until the new technology is ubiquitous in early adopters.

To maximize the potential data transmission speed of 5G, high frequency bands will be used by communication service providers. Compared to the low frequency signals used in existing wireless generations, the high frequency bands travel shorter distances and are more susceptible to interference. To provide users with the highest possible speeds, without succumbing to the limitations of physics, networks will require an abundance of small cell antenna systems. With its small cell equipment widely considered to be high-end, Nokia stands to benefit. Our estimate of the fair value of Nokia shares is $5.70.


York Water

YORW-Nasdaq

To buy Price $44.69 on March 9

by Janney Montgomery Scott

While York Water’s 2021 revenue met expectations, earnings per share of $1.30 were above our forecast. Looking ahead, 2022 (and 2023) are expected to be peak years for system-wide investment, which should drive rate base growth throughout our published estimates. We maintain our fair value of $55 on the stock. York Water shares remain attractive at a price/earnings ratio of 32 times our 2023 estimate; we believe a 39 P/E is achievable.


CrowdStrike Holdings

CRWD-Nasdaq

To buy Price $169.79 on March 9

by BofA Securities

CrowdStrike is a market leader in endpoint protection platforms. EPP solutions help protect businesses against cyberattacks. CrowdStrike’s platform is one of the few 100% cloud-based architectures and is uniquely positioned to displace incumbents with its scale, including its advanced detection and remediation capabilities. CrowdStrike is positioned to gain EPP market share and expand into other areas of security over time. Target price: $315.

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