Analysts’ Top Services Picks: MYCC, AER

By Austin Angelo

There’s a lot to be optimistic about in the Services sector as 2 analysts just weighed in on ClubCorp Holdings (NYSE: MYCC) and Aercap Holdings (NYSE: AER) with bullish sentiments.

ClubCorp Holdings (NYSE: MYCC)

FBR Capital analyst Susan Anderson reiterated a Buy rating on ClubCorp Holdings (NYSE: MYCC) today and set a price target of $23. The company’s shares opened today at $13.80.

Anderson observed:

“MYCC reported 1Q17 adjusted EBITDA of $43.7M (versus FBR/consensus of $43.4M/ $43.6M). Additionally, MYCC announced the result of its strategic alternatives review: The board determined not to pursue a strategic transaction at this time and to continue executing its three-pronged growth strategy, focused on organic growth, reinvention, and acquisitions. MYCC reiterated FY17 guidance for revenue of $1.095B–$1.135B (versus FBR/consensus of $1.107B/$1.119B) and adjusted EBITDA of $255M–$265M (versus FBR/consensus of $259.5M/$260.1M). We continue to like the industry’s largest country club portfolio, and we are aggressive buyers on the pullback of the strategic review, not leading to an outright sale of MYCC.”

According to TipRanks.com, Anderson is a 2-star analyst with an average return of 0.2% and a 51.2% success rate. Anderson covers the Services sector, focusing on stocks such as Ascena Retail Group, Abercrombie Fitch, and Children’s Place.

Currently, the analyst consensus on ClubCorp Holdings is Strong Buy and the average price target is $18, representing a 30.4% upside.

In a report issued on April 4, Jefferies also reiterated a Buy rating on the stock with a $27 price target.
Aercap Holdings (NYSE: AER)

FBR Capital analyst Christopher Nolan reiterated a Buy rating on Aercap Holdings (NYSE: AER) yesterday and set a price target of $53. The company’s shares opened today at $43.39.

Nolan wrote:

“We are reiterating our Outperform rating, our $53 price target, and our selection of AER as our FBR Alpha Generator. On April 12, AER issued a press release reporting that in 1Q17 it had signed leases for 69 aircraft (vs. 56 at 4Q16, 96 in 3Q16, and 27 in 2Q16), sold 25 aircraft (vs. 41 in 4Q16, 40 in 3Q16), and purchased 11 aircraft (vs. 19 in 4Q16, seven in 3Q16). The 1Q17 purchase and sale volumes were incrementally higher than we were expecting; thus, we are slightly raising our 1Q17 GAAP EPS estimate to $1.26 from $1.24 but maintaining our annual GAAP EPS estimates. AER is scheduled to report 1Q17 earnings before the market opens on May 9, 2017. We believe gains on sale (GoS) are likely to be an upside swing factor in 1Q17 earnings, particularly if the improved GoS margins demonstrated in 4Q16 continue in 1Q17. However, we are not factoring that into our 1Q17 EPS estimate.”

According to TipRanks.com, Nolan is a 4-star analyst with an average return of 5.4% and a 60.3% success rate. Nolan covers the Financial sector, focusing on stocks such as Pennantpark Investment Corp, Atlantic Capital Bancshares, and Raymond James Financial.

Currently, the analyst consensus on Aercap Holdings is Strong Buy and the average price target is $60.33, representing a 39.0% upside.

In a report issued on April 6, Credit Suisse also maintained a Buy rating on the stock with a $55 price target.

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