Why Smith & Wesson Holding Corp. Shares Could Shoot to $20

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Smith & Wesson  (NASDAQ: SWHC  ) gained about 4% today after Wedbush upgraded the firearm products specialist from neutral to outperform.

So what: Along with the upgrade, analyst Rommel Dionisio raised his price target to $20 (from $13), representing about 33% worth of upside to yesterday's close. So while contrarian traders might be turned off by Smith & Wesson's price strength in recent months, Dionisio's call could reflect a sense on Wall Street that industry tailwinds give it plenty of room to run.

Now what: According to Wedbush, Smith & Wesson's risk/reward trade-off is rather attractive at this point. "Our recent spring checks of U.S. firearms dealers and distributors indicate recent new handgun launches by Smith & Wesson, particularly in small frame/concealed carry pistols and revolvers, continue to drive significant market share expansion, enabling S&W to sharply outperform the industry overall," said Dionisio. "With industry demand now normalizing, dealers indicate this environment is again separating the market share winners from the losers, and S&W is benefiting from recent new products such as the M&P Bodyguard 380." When you couple that upbeat outlook with Smith & Wesson's cheapish forward P/E of 10, it's tough to disagree with Wedbush's upgrade. 

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2965323, ~/Articles/ArticleHandler.aspx, 11/27/2014 8:09:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement