Nice currency board: what will the big Israeli companies do on Wall Street?

The report season for the third quarter of the year has opened on Wall Street, and Israeli companies are expected to start reporting after the holidays. In the background for the current report season is also the US presidential election campaign, where the competition is very close; the Fed’s interest rate cut last month; as well as the geopolitical challenges, primarily the war in the Middle East and the war between Russia and Ukraine.

At the American investment management company Themes ETF, strategy manager Taylor Krystkowiak commented on the opening of the report season, “which started well, with the bypassing of the forecasts and positive reactions of the market. The American companies that have already published presented an average bypassing of the profit forecast of 6.3%. The financial sector leads with an average of 10.1 %, while the industry and energy sectors are behind.” At the same time, Paul Marino, VP of Revenue at Themes ETF, added that “we see that companies that publish low forecasts – pay dearly for it, such as American Express, ASML and CVS. We estimate that this may be a strong reporting season for some companies, and cruel among those that will not present a horizon for future growth.”

In the meantime, as mentioned, the Israeli companies have not yet published reports, and the first to publish will be next week Check point , Lemonade , Mobileye andSilicon . Boffenheimer found that a list of 60 Israeli companies on Wall Street has underperformed the market since the beginning of the year – although looking ahead they are more optimistic. According to Oppenheimer economists, “a consistent upward trend in the American stock market has benefited the leading growth companies in particular, leaving behind the small cap stocks, including the Israeli growth stocks.”

According to them, the war hurt the appetite of global investors for Israeli companies. However, they add that based on a historical pattern of behavior, in the fourth quarter shares of small companies tend to close gaps against the leading indices, and estimate that Israeli shares may also perform better and even return to outperform.

While there were Israeli companies that stood out with triple-digit returns from the beginning of the year – for example Zim (146%) Or alarm (143%), and large companies like nature andMonday.com rose at a double-digit rate and recorded excess returns compared to the general market, there were also Israeli stocks that stood out negatively. Among these stand out solaredge (81.5%-), productivity (74%) fMobileye (70.5%-).

In total, Oppenheimer’s list of 60 Israeli stocks showed an average return of only 7% from the beginning of the year to mid-October – below the performance of the TA 125 index and much less than the rally in the major technology stocks in the US (23% increase in the Nasdaq).

As of today, among the ten most valuable Israeli companies are 8 technology companies, a pharmaceutical company and a defense company, and among the 8 technology companies 3 are engaged in cyber security (Check Point, Cyberark and Sentinel One). The car technology company Mobileye, which was for about a year and a half the largest Israeli company, recently vacated the place for Check Point and deteriorated to the 7th place among the Israeli companies.

We checked what the analysts expected for the 5 largest Israeli companies on Wall Street, most of which actually showed an excess return on the markets since the beginning of the year.

Check Point: Trading at a record level

The cyber security company is trading at a value of 22.7 billion dollars after a 35% increase since the beginning of the year. The stock is trading at record levels today and recently surpassed the symbolic threshold of $200. At the beginning of December, Nadav Zafarir, a founding partner of the Team8 Foundation, will take over the position of CEO, and Gil Shvid will move to the position of active chairman after three decades as CEO.

According to the company’s forecast, revenues in the third quarter will be 615-650 million dollars and the Non-GAAP net profit will amount to 2.19-2.29 dollars. The average of the analysts’ forecasts is slightly higher than the middle of the company’s forecast range.

According to the Wall Street Journal, 14 analysts are positive about the stock Check point and 22 neutrals. Following the latest increase in the stock, it overtook the analysts’ average target price, which is now 4.5% lower than the price on the Nasdaq.

Teva: a jump of 72% this year

The pharmaceutical company, under the management of Richard Francis, is traded on the New York and Tel Aviv Stock Exchanges at a value of 20.3 billion dollars, following a 71.9% increase since the beginning of the year. With the publication of the previous reports, nature raised its annual forecast and it expects to end 2024 with revenues of 16-16.4 billion dollars, a growth of 2.5% compared to 2023 – the year in which Teva finally returned to growth after 5 years of revenue erosion.

Analysts expect revenues in the third quarter to total $4.1 billion, an increase of 6.9% compared to the corresponding quarter, and non-GAAP net profit per share to be 66 cents. According to Yahoo Finance, most analysts are neutral on the stock, and the average target price is about 18% higher than the current one. The rating company Fitch recently raised Teva’s credit rating, and Moody’s changed the rating horizon to positive.

Monday: The stock is close to the target price

monday is traded at a value of 14.3 billion dollars after a 53% increase in the share price since the beginning of the year. The company, under the management of co-founders Eran Zinman and Roy Man, has not returned to the peak levels it reached after the IPO in 2021 (a value of approximately $19.4 billion compared to $6.8 billion in the IPO), but it is in positive momentum. When it published reports for the second quarter, it raised the annual forecast and expects annual growth of 31%-32% to revenues of 956-961 million dollars, with a non-GAAP operating profit of 100-105 million dollars.

Jefferies recommends Monday with a “buy” recommendation at a target price of $300, 4.4% higher than the current price. The average target price of the analysts is about $304.

Cyberark: Completed a huge acquisition

The cyber security company, under the management of Matt Cohen, recently completed the largest acquisition in its history, and one of the largest in the cyber industry – the purchase of Venafi from the US for $1.54 billion. The acquired company deals in machine identity management and increases the scope of the market it addresses Cyberark which deals with managing preferred accounts and managing identities in the organization.

Following a 36.9% increase since the beginning of the year, the stock is now trading at record levels and is very close to $300. Cyberark’s market value is $12.9 billion. Analysts will expect to hear from the company with the publication of the nearer reports on Torumat and Nafi, whose acquisition was completed earlier this month. For the third quarter (which was completed without Vanafi), the analysts’ forecast is for revenues of 234 million dollars and a Non-GAAP net profit of 46 cents per share.

Nice: affected by the retirement of the CEO

The dual technology company recently announced the appointment of Scott Russell, who was a senior executive at SAP, to the position of CEO in place of Barak Elam who will manage NICE until the end of the year, completing over a decade in the position. nice provides technological solutions for managing customer relationships and risk relationships, and contrary to the general positive trend in the market, the stock has weakened since the beginning of the year by 9.9%, mainly due to the uncertainty after Elam’s retirement announcement. Nice’s current market value is $11.3 billion.

When publishing the latest reports, Nice left the annual revenue forecast unchanged but raised the net profit per share forecast. Regarding the third quarter, the analysts’ forecast is for revenues of approximately $683 million and a Non-GAAP net profit of $2.68, an increase compared to the corresponding quarter.