Analysts’ Top Financial Picks: Apple Hospitality REIT (APLE), Health Insurance Innovations (HIIQ)

By Jason Carr

There’s a lot to be optimistic about in the Financial sector as 3 analysts just weighed in on Apple Hospitality REIT (APLEResearch Report), Health Insurance Innovations (HIIQResearch Report) and Medallion Financial (MFINResearch Report) with bullish sentiments.

Apple Hospitality REIT (APLE)

In a report released yesterday, Bryan Maher from B.Riley FBR maintained a Buy rating on Apple Hospitality REIT, with a price target of $19. The company’s shares closed yesterday at $14.85.

Maher noted:

“Apple Hospitality REIT (APLE) posted 2Q19 results that were mostly in line with expectations as adjusted EBITDAre came in at $126.5M, just above our $125.9M estimate and the consensus estimate of $126.1M. MFFO/share came in at $0.49, in line with the consensus estimate of $0.49, but slightly below our $0.50 estimate. Comparable RevPAR growth declined 0.1%, driven by 0.5% ADR growth, offset by a 0.6% decline in occupancy. By comparison, total industry RevPAR in 2Q19 was 1.1%, while the upscale hotel chain scale, in which APLE operates, declined 0.4%, according to STR. Management continues to do a very good job managing costs, despite well known industry challenges, as adjusted hotel EBITDA margin came in at 39.6%, down just 40-bps from 2Q18. APLE is under contract to potentially acquire seven hotels for a total price of ~$216.0M.”

According to TipRanks.com, Maher is a 4-star analyst with an average return of 7.4% and a 51.1% success rate. Maher covers the Financial sector, focusing on stocks such as Industrial Logistics Properties Trust, Senior Housing Properties Trust, and Office Properties Income Trust.

Currently, the analyst consensus on Apple Hospitality REIT is a Moderate Buy with an average price target of $19.

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Health Insurance Innovations (HIIQ)

B.Riley FBR analyst Randy Binner reiterated a Buy rating on Health Insurance Innovations today and set a price target of $45. The company’s shares closed yesterday at $20.20, close to its 52-week low of $18.27.

Binner noted:

“Health Insurance Innovations (HIIQ—Buy, $45 PT) announced 2Q19 adjusted EPS of $0.71, versus the B. Riley FBR and consensus estimates of $0.44/$0.42. The beat was largely the result of lower-than-forecasted third party commission expense, compared to our model. HIIQ raised its 2019 adjusted EPS guidancefrom $3.80–$4.05 to $4.00-$4.25. 2Q19 revenue, policy production (EDUs), and G&A margins were all off from our assumptions as the new ASC 606 accounting seems to be creatinggeographynoise in the model. The bright-side here is we are getting a better idea of how these items fit together and are increasing our EPS estimates in 2019E to $4.00, 2020E to $4.50, and 2020E to $5.00.”

According to TipRanks.com, Binner is a 5-star analyst with an average return of 12.3% and a 63.9% success rate. Binner covers the Financial sector, focusing on stocks such as American Equity Investment Life, Colony Credit Real Estate Inc, and Victory Capital Holdings Inc.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Health Insurance Innovations with a $61.40 average price target, implying a 204.0% upside from current levels. In a report issued on July 23, Northland Securities also assigned a Buy rating to the stock with a $60 price target.

Medallion Financial (MFIN)

B.Riley FBR analyst Scott Buck maintained a Buy rating on Medallion Financial yesterday and set a price target of $10. The company’s shares closed yesterday at $5.

Buck observed:

“Medallion Financial Corp. (MFIN—Buy, $10 PT) reported 2Q19 EPS loss of $0.31, vs. our estimated loss of $0.02 and well below the Street’s positive $0.05. Results continue to be negatively impacted by upside down economics in the medallion loan portfolio which generates negative NII. In addition, higher-than-expected OpEx was largely driven by costs associated with increased bad debt collection efforts on charged-off medallion loans. Despite these headwinds, the consumer and commercial lending segments continue to perform well, and profitably. As medallion loan exposure is further reduced, we believe the profitability of these segments should drive consistently positive earnings and book value growth.”

According to TipRanks.com, Buck is ranked #4839 out of 5222 analysts.

Medallion Financial has an analyst consensus of Moderate Buy, with a price target consensus of $11.

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