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On Tuesday, Jefferies began coverage of Matson , Inc. (NYSE:MATX) with a positive outlook, assigning a Buy rating to the company’s shares and establishing a price target of $125. The new coverage comes as Matson’s shares, currently trading at $106.62, present an attractive entry point following a recent decline. According to InvestingPro analysis, the company appears undervalued, with a P/E ratio of 9.88x and a perfect Piotroski Score of 9, indicating strong financial health.
The analyst at Jefferies highlighted that Matson’s stock correction offers an enticing opportunity for investors. While the stock has declined 20.7% year-to-date, the company maintains strong fundamentals with a healthy 25% gross profit margin and robust cash flows. The declining US import volumes have been a focal point for market watchers, with container rates decreasing since February. Despite this trend, spot rates have found some stability since mid-March, suggesting a potential shift in the market. For deeper insights into Matson’s market position and financial metrics, investors can access the comprehensive Pro Research Report available on InvestingPro.
Matson is recognized for its reliable domestic revenue base, which is complemented by the potential for gains in the international Transpacific trade sector. The company has demonstrated its financial strength by maintaining dividend payments for 53 consecutive years and achieving 10.6% revenue growth in the last twelve months. Jefferies suggests that there could be unexpected increases in rates in the near future, which would benefit the company.
The firm’s analysis points out that while the broader market has been preoccupied with lower import volumes into the United States, the impact of this has already been factored into the declining container rates. Matson’s position allows it to capitalize on these market changes.
Jefferies’ coverage initiation and the setting of a $125 price target reflect a confidence in Matson’s ability to navigate the current market environment and potentially leverage higher rates in the international trade segment in the weeks ahead. The company’s stock is anticipated to perform well as it continues to offer a stable source of domestic revenue along with the added benefit of its involvement in the Transpacific trade.
In other recent news, Matson, Inc. reported strong financial results for the fourth quarter of 2024, with earnings per share (EPS) reaching $3.80, significantly surpassing the forecasted $2.45. The company’s revenue for the quarter was $890.3 million, exceeding the expected $840.29 million. Analysts at Stephens have raised their price target for Matson’s stock to $175, maintaining an Overweight rating, following these impressive earnings. Additionally, Matson announced a leadership change in its logistics unit as Rusty Rolfe, Executive Vice President and President of Matson Logistics, will retire on July 1, 2025. Jerome Holland, currently serving as Vice President of Strategic Planning and Business Development, has been named as Rolfe’s successor. Meanwhile, Matson’s shareholders have approved a new 2025 Incentive Compensation Plan, which includes the issuance of 1.4 million shares of common stock. The plan aims to align the interests of executives and shareholders. These developments come as Matson anticipates geopolitical factors impacting their 2025 results, although they expect ocean operating income to remain robust.
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