COWEN
EQUITY RESEARCH
March 2021
BEST IDEAS 2021
March 18, 2021
Best Ideas 2021
Cowen Research
Jeffrey Osborne
Thomas Boyes
Emily Riccio
Jeffrey Rossetti
Karl Ackerman, CFA
Vivien Azer
Helane Becker
Bryan C. Bergin, CFA
Marc Bianchi, CFA
John Blackledge
Ken Cacciatore
Oliver Chen, CFA
Gabe Daoud, Jr.
Matt Elkott
Marc Frahm, Ph.D.
Jason Gabelman
Joseph Giordano, CFA
Joshua Jennings, M.D.
John Kernan, CFA
Gautam Khanna
Kevin Kopelman, CFA
Boris Peaker, Ph.D., CFA
Matthew D. Ramsay
Charles Rhyee
Krish Sankar
Jason H. Seidl
Paul Silverstein
Colby Synesael
Joseph Thome, Ph.D.
Lance Vitanza, CFA
Cai von Rumohr, CFA
Yaron Werber, M.D.
J. Derrick Wood, CFA
COWEN'S BEST ESG INVESTMENT IDEAS FOR
2021 + VIDEO
THE COWEN INSIGHT
This report compiles Cowen's Best ESG investment ideas for 2021, with 30 analysts
highlighting potential catalysts for 43 fundamental stock recommendations among equities
that also screen well from an ESG perspective. Demand for ESG investments soared in ’20,
and we see trends accelerating through the decade. Top ideas are Outperform rated and
score >60 in Cowen’s ESG Score framework.
.
ESG Investing Becoming Mainstream; Assessing Cowen’s Top Ideas With An ESG Lens
During 2020, flows into sustainable open-end and exchange-traded funds available to
U.S. investors reached $51.1bn versus $21.4bn in 2019 according to Morningstar. The
$51.1bn figure represented 24% of overall flows into U.S. stock and bond funds for the
year. In Europe, this figure was over 50%, with 50.5% of fund flows into European funds in
2020 going into ESG products and the strategy attracted €574.3bn in inflows according to
Refinitiv Lipper, or about 13x higher than fund flows in the U.S. Note ESG funds still only
represent about 15% of assets under management in Europe at the end of 2020, or about
€2 trillion invested.
4Q20 was a record-breaking quarter for sustainable funds in terms of flows, assets and
product launches. Globally, inflows into sustainable funds were $152.3bn, up 88% from
3Q20 and up >7x compared to 1Q18. Europe continued to represent ~80% of flows while
active funds accounted for ~2/3 of flows. Assets in sustainable funds increased to $1.65tr,
up 29% from 3Q20 and up ~3x from 1Q18. Contributing to the growth was a record number
of fund launches (196 including 147 from Europe).
Roughly one in four dollars in the U.S. is now invested through an ESG lens. Furthermore, it
is our view that if two equities under non-ESG integration processes “screened” identically
around expected returns and risks, over time more investors would likely choose to invest
in the equity with a better ESG profile assuming all other attributes of the two equities were
identical. According to EY, the percentage of investors required to invest in ESG products
increased to 26% in 2020 from 14% in 2019, with that figure expected to nearly double
again in the next two years.
Please see pages 11 to 24 of this report for important disclosures.
COWEN.COM
COWEN
EQUITY RESEARCH
March 18, 2021
Quarterly Global Sustainable Fund Flows ($ Billions)
160
140
120
$ Billions
100
80
60
40
20
-20
Q1 Q2
2018
Q3
Q4
Europe
Q1 Q2
2019
US
Q3
Q4
Q1 Q2
2020
Q3
Q4
Q3
Q4
Rest of World
.
Source: Morningstar, Cowen and Company
Quarterly Global Sustainable Fund Flows – Active and Passive ($ Billions)
160
140
$ Billions
120
100
80
60
40
20
Q1 Q2
2018
Q3
Q4
Q1 Q2
2019
Active
.
Source: Morningstar, Cowen and Company
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Q3
Passive
Q4
Q1 Q2
2020
March 18, 2021
Quarterly Global Sustainable Fund Assets ($ Billions)
1,800
Billions
COWEN
EQUITY RESEARCH
1,600
1,400
1,200
1,000
800
600
400
200
Q1
2018
Q2
Q3
Q4
Europe
.
Q1
2019
Q2
US
Q3
Q4
Q1
2020
Q2
Q3
Q4
Rest of World
Source: Morningstar, Cowen and Company
Although they’re lumped together, it’s mostly the “E” in ESG that has served to draw
investor interest in the sector; however, we are starting to see that diversify into the “S”
and “G” in recent months. COVID-19, along with accelerating concerns around climate
change, the movement for racial justice, and the outcome of the 2020 election and the
likely accelerating shift toward a decarbonized economy have thus far been and will likely
continue to be catalysts for investors wanting to align their investments with their broader
societal concerns. Note many of these developments are not just domestic in nature,
with Europe implementing a Green New Deal and China pledging to be carbon neutral by
2060 have also driven investor interest higher. We see decarbonization of society as a
multi-decade transformation that is not going away anytime soon and as rolled out to all
industries ranging from power generation to oil & gas to airlines, something that must be
assessed by investors and likely creates winners and losers along the way.
Demand for ESG investing is on the rise due to:
■ Government policies – evolving government initiatives are prompting institutional and
retail investors to allocate capital toward sustainable investments.
■ Demographic shifts – younger investors are seeking impact and ESG investments as the
core of their portfolio.
■ Evolving view of risk – evolving data and frameworks can identify risks and opportunities.
Cowen's ESG Scores
Cowen has partnered with Truvalue Labs to establish a uniform ESG Score for the majority
of companies we cover. These Scores appear on the front page of our company research
reports and are designed to offer an unbiased, common framework that can be used to
distinguish between companies. Cowen’s ESG Scores evaluate companies’ performance on
a 0 to 100 scale. A score of 50 represents a neutral impact. Scores above 50 are a more
positive indication, and scores below are more negative.
Truvalue uses artificial intelligence to capture stakeholders’ view of how companies
are performing on ESG metrics, using the Sustainability Accounting Standards Board
(SASB) materiality framework. The company captures unstructured data from more
than 100,000 sources, in 13 languages, which provide an indication of how stakeholder
issues and potential controversies may affect a company based on real-time information.
These data points are collected from a wide range of sources with varied perspectives,
including industry publications, news outlets, NGOs, trade unions, government sources,
legal and regulatory filings, and academic publications. Natural language processing is then
applied to interpret semantic content from the original sources and generate analytics by
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EQUITY RESEARCH
March 18, 2021
applying criteria consistent with established sustainability and ESG frameworks. Additional
information about Cowen’s ESG and sustainability initiatives may be found HERE.
The Risks/Rewards Of Combating Climate Change: Fundamental Impact To Investors
A comprehensive understanding of the risks and rewards associated with climate change
is critical for investors to assess their portfolio. The risk-return profile of companies with
climate-related exposure may materially shift due to the physical impacts of climate change,
climate policy, and new technologies. BlackRock Chairman, Larry Fink, penned his annual
letter to CEOs highlighting climate change in January noting that the world's largest asset
manager with nearly $7 trillion in AUM would avoid investments in companies that present
a "high sustainability related risk." While Fink’s annual letter has been eagerly awaited
annually from sustainability investors, this year’s letter captured more media attention
as the focus was on highlighting the relation of the COVID-19 crisis with climate change
but also called for increased reporting and financial disclosure around climate change. Fink
noted “the pandemic has presented such an existential crisis—such a stark reminder of
our fragility—that it has driven us to confront the global threat of climate change more
forcefully and to consider how, like the pandemic, it will alter our lives.”
In order to understand the associated risks and opportunities that climate change poses to
their portfolio, investors are beginning to ask two simple questions:
1. How does my investment impact climate change?
2. How does climate change impact my investment?
Understanding these two fundamental questions should help investors align environmental
returns with financial returns.
What Is ESG Investing?
ESG investing is an investment-related activity that accounts for some type of ESG
consideration in the investment screening process. It is not a separate asset class or single
strategy, and the approach to ESG integration varies across investors. ESG integration in
the investment screening process is becoming more mainstream, with numerous new funds
opening up around the theme as well as existing ones leveraging the overlay process.
Sustainable Accounting Standards Board Framework
.
Source: SASB, Cowen and Company
Companies Beginning To Treat ESG Trends As An Opportunity And Not A Risk
Given societal pressure, government mandates, and shareholder activism among many
other factors, companies are beginning to treat ESG trends as a strategic opportunity and
no longer as a headache or risk. In our view, ESG reporting and associated initiatives present
opportunities to build resilience and integrate needed capital expense projects with an
ESG lens integrated. Many of these expenses may lead to increased productivity and cost
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EQUITY RESEARCH
March 18, 2021
savings if done appropriately. Given the new administration within the U.S., the SEC may
weigh in and help drive increased transparency around disclosures for ESG criteria, but in
the meantime, investors are pressing ahead and not waiting for mandated disclosures.
In the European Union, advances have already been made around ESG reporting, and we
expect nonfinancial reporting requirements for sustainable investment funds under the
Sustainable Finance Disclosure Regulation to be completed in the first half of 2021 and
compliance required in 2022. The EU is also reviewing the Nonfinancial Reporting Directive,
which governs ESG disclosures by companies, with plans to commence the review also in
the first half of 2021. The international business community has taken steps toward the
implementation of standardized ESG disclosure metrics, with the World Economic Forum’s
universal ESG reporting metric framework the latest development.
Shifting Desire From Investors For Financial Returns And Environmental Benefits
The motivation of the very first sustainable investment funds created over 40 years ago
was often religious or ethical. Personal values meant funds sought to avoid certain business
such as alcohol, tobacco, gambling, and weapons, for example. This approach was known
as socially responsible investment (SRI) and funds employing this strategy started to
proliferate in the 1970s and 1980s. The first socially responsible investment portfolio
created was actually the Church of England’s in May 1958.
In the early 1990s, the early period of sustainable investments was characterized by
negative selection criteria; however, the tone of the buy-side started to change toward
positive selection criteria, and after an investigation into sustainability scoring of equities,
traditional valuation methodologies were employed. In the early 2000s, investors became
aware that among the many ESG factors, there was also a number of metrics that were
highly financially relevant. At this period in time, financial analysis was extended to
include environmental, social, and governance factors, which led to the concept of “ESG
integration.” In the early 2000s, there was an intense desire to come up with new solutions
to combat global climate change challenges. The idea of thematic investing came to the
forefront. Themes of these new funds ranged from sustainability themes such as climate
change, water scarcity, renewable energy, and forestry. Today, most investors want to
better understand the ultimate risks all equities in their portfolio face. Given accelerating
climate change trends, some industries are more exposed to increased headwinds relative
to others, ranging from access to capital issues and available resources to increased
regulations. Investors are not only aiming for a financial return, but also want to see
quantifiable data on the impact their investments are having on society or want to better
understand the risk factors associated with the impact of a changing climate on their
investment portfolio.
Critical Elements of ESG Investing
Approach
1) ESG Investing
2) Screened Investing
3) Thematic Investing
4) Impact Investing
.
Description
Analyze companies based on ESG business
practices to identify risks and opportunities. This
approach can be accessed by selecting companies
with relative ESG outperformance.
Reduce exposure to companies or sectors (e.g.
fossil fuels, firearms, or tobacco companies) that
present risk or compromise investor values.
Identify companies that address a specific ESG
issue such as renewable energy, diversity or
accounting transparency.
Investments with the dual objective of generating
measurable societal and/or environmental
impact and a level of financial return.
Source: Cowen and Company
Demand for investments that offer positive environmental benefits alongside financial
returns has skyrocketed in recent years, and the supply of thematic products, like green
bonds, sustainability-linked loans, and ESG funds (both active and passive) are surging in
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EQUITY RESEARCH
March 18, 2021
response. The rise of ESG investing can also be understood as a proxy for how investors and
societies are changing and how concepts of risk assessment and valuation are adapting to
these broader societal changes.
4,000
500
3,500
450
400
3,000
350
2,500
300
2,000
250
1,500
200
150
1,000
100
500
50
Source: Cowen and Company, Bloomberg
COWEN.COM
Cumulative Funds
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
New Funds
.
6
1994
1992
1990
1988
1986
1984
1982
0
Pre-1980
-
New Fund Creations
Cumulative Funds
New and Cumulative ESG Funds
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EQUITY RESEARCH
March 18, 2021
Cowen ESG Scores
Company
Ticker
Market
Cap ($)
ESG Score Cowen Opinion
Catalysts
ABBN
57.4B
70/100
We continue to view ABB as a multi-faceted way to play the broader automation and
electrification theme at a compelling valuation. We are seeing critical relative improvements in
operating performance vs peers in a short period under new leadership and strategic direction.
Multiple portfolio catalysts remain and comps in challenging markets are poised to reset.
Accuray
ARAY
0.5B
79/100
ARAY's new order & revenue growth prospects are at an all-time high due to innovative
technology launches including ClearRT, Synchrony for Radixact, and the CyberKnife S7. The
China JV and the CK & Tomo replacement cycles are also important drivers of ARAY's HSD-LDD
revenue growth potential that is not reflected in the discounted valuation (1.3x 2022E sales).
- New technology launches like ClearRT and Cyberknife S7 will aid replacement cycles in U.S. / W. EU
- China Type A license backlog represents a ~$132M revenue conversion opportunity in next 12-18m
- China domestic Type B system from JV collaboration will be approved and launched in next 15-18m
- CK Neuro platform (Brainlab partnership) represents an outyear growth opportunity
American Eagle Outfitters
AEO
5.1B
65/100
AEO’s solid capitalization, relevant brand concepts to younger customers, store closures from a
position of strength, and ongoing merchandise innovation should drive more consistent growth
and share gains amidst retail dislocation. Furthermore, Aerie fixed cost leverage, better
inventory management, and improved product expansion should drive margin expansion.
- American Eagle gross margin expansion on store closures & merchandise improvement in FY21
- Aerie revenue growth and margin growth on fixed cost leverage and merchandise margin upside
- Increased e-comm margins on fixed cost leverage of distribution and fulfillment costs
- Dividend reinstatement in FY21
ABB
- Material recovery in industrial macro and broader economic conditions
- Increased deployment of automation and robotics in a wide variety of end-markets
- Divestment of identified units (Power Conversion/Mechanical Power Transmission/Turbocharging)
- CEO to drive internal cultural change
Applied Materials
AMAT
110.0B
65/100
Semicap industry fundamentals, especially WFE (Wafer Fab equipment) is in a long-term secular
growth trajectory due to underlying themes such as AI, autonomous driving, machine
learning….and the overall trend of increasing semiconductor content in our day-to-day lives. This - 3D NAND migration to 90+ layers, and 10/7nm nodes at logic/foundries
bodes well for the semicap industry. AMAT is gaining share in its verticals, and this should help it - Increasing OLED penetration and its impact on equipment purchases
gain an increasing percentage of the WFE TAM. Solid execution, capital returns, and cash flow
generation should add more long-term shareholder value.
Aptiv
APTV
41.4B
60/100
- Backlog growth in high voltage and ADAS
Well positioned with ~7-8% above market growth relative to light duty vehicle production, with
- Commercialization of Motional JV with Hyundai
meaningful growth from electrification and ADAS
- Likely upside driven by faster shift to EVs
Aurinia Pharmaceuticals
AUPH
1.8B
71/100
Lupkynis was approved for the treatment of Lupus Nephritis in January 2021, and our
consultant checks and survey results continue to indicate Lupkynis will rapidly be integrated as
- Ongoing – Lupkynis launch performance
part of the new standard-of-care paradigm for a significant number of lupus nephritis patients,
- Early 2022 – long-term 36-month safety trial results
and ultimately reach $1B+. And we continue to believe this management team appears to have
the absolute comprehensive support system in place for a successful launch.
Avaya
AVYA
2.6B
65/100
Sustained positive topline growth, step-change increases in cloud and recurring revenue
metrics, and meaningfully positive adj EPS define Avaya’s successful transition to a cloud-based
communications services provider. We expect the stock to find favor among regular-way tech
investors as it achieves (and ultimately exceeds) its long-term 2-4% topline growth targets.
- Revenue outperformance, ARR lift suggest additional “beat & raise” quarters throughout FY21
- Accelerating ARR growth underpins our $40 PT (8.2x FY22E Adj. EBITDA of $737mm)
- Newly-introduced Adj. EPS guidance will over time help broaden Avaya shareholder base
- Midpoint $3.05 to $3.27 guide suggests shares trade at a current-year PE less than 10x
Axsome Therapeutics
AXSM
2.5B
66/100
AXS-05 has generated compelling data in the treatment of MDD (NDA submitted) and
Alzheimer’s agitation. An NDA for AXS-07 in migraine is expected in Q2. We view shares as
undervalued for the potential of these programs. Successful development of AXS-05 in smoking
cessation, AXS-12 in narcolepsy, and AXS-14 in fibromyalgia likely would drive upside.
- Potential FDA review of AXS-05 MDD NDA (H1:21)
- NDA submission for AXS-07 in acute migraine (Q2:21)
- FDA meeting to discuss AXS-14 development path in fibromyalgia (Q2:21)
- Topline data from Ph. II MERIT study of AXS-05 in TRD (H2:21)
Baker Hughes
BKR
24.9B
63/100
BKR has exposure to diverse and growing end markets that should have less volatility than
other OFS companies. We also like the company's exposure to the Energy Transition and
relatively lower capital intensity which produces solid FCF generation. GE's ownership and exit
continues to be an overhang, but we suspect this has become less of a concern for investors.
- Continued reduction in GE’s ownership stake (now ~30% vs >60%)
- Significant LNG equipment awards for the company’s TPS segment
- Incremental color on Energy Transition opportunities (e.g. hydrogen, energy storage)
- Improvement in BKR’s Oilfield Services and Digital Solutions businesses
Brown-Forman
BF/B
33.5B
61/100
Despite COVID, BF/B’s YTD performance has been resilient with sales for both the U.S. and
developed international markets up 7%. Robust growth in whiskey and tequila should provide
BF/B with a path for continued market share gains, where they will also begin to cycle easy
comps, while improving upon their gross margin, making for a favorable setup in FY22.
- Continued market share gains in whiskey and tequila
- Increases in advertising spend drive better topline growth in Jack Daniel’s
- COVID/on-premise recovery benefits Jack Daniel’s as the #2 on-premise spirits brand in the world
- Potential tariff relief
Calix
CALX
3.0B
64/100
We see an outstanding long-term outlook for oper model and shares with significant upside
ahead—for both revenue growth and margin structure—from Calix’s still early, but well
underway, transformation into a software solutions-centric company. We see CALX eventually
driving 60%+ GM and 20%+ OM from CY20’s ~51% and ~12% respective levels.
- Inflection in software revenue growth in both absolute dollars and portion of total revenue in CY22
- Improvement in supply chain constraints over next 12 months driving both improved revenue
growth and gross margin expansion
- Meaningful revenue ramp from $20.4B U.S. Rural Digital Opportunity Fund in CY22 and beyond
Ceridian HCM Holdings
CDAY
13.2B
68/100
CDAY has a multi-faceted growth strategy (enterprise, international, On-Demand Pay) to
sustain strong adoption its Dayforce HCM offerings. Its differentiated continuous calculation
engine positions CDAY to be a leader in On-Demand Pay, which we view as not fully
appreciated.
- Ongoing global expansion growing addressable opportunity and competitive differentiation
- Growing emphasis surrounding On-Demand Pay and financial wellness
- Ongoing success in enterprise push supported by SI partnerships
- Recovery in employment levels
ChargePoint
CHPT
6.7B
66/100
CHPT is a N.A. EV charging infrastructure leader with 60-70% market share supported by a
capital-light business model that focuses on a premium experience for site owners / drivers
through best-in-class hardware and software offerings. We think the company will maintain its
dominate position in N.A. while growing European share to 20-30% from <5% today.
- Successful European expansion and share gain
- U.S. CLEAN Future Act ratification supporting EVSE investment over next 10 years
- President Biden’s Infrastructure Bill later this year
- Additional ICE phase out mandates that accelerates EV adoption
Cognex
CGNX
14.6B
68/100
CGNX is our top pick for 2021 – we continue to see momentum building for CGNX driven by
strength in logistics, accelerating consumer electronics volumes, and a recovery in automotive.
We expect this to be supplemented by smaller (in $ terms not %) opportunistic growth in life
sciences bolstered by COVID-19 opportunities.
- Further integration of deep learning capabilities into various products
- Continued rapid growth in logistics end-market
- Increased adoption of vision technology into new markets like Life Sciences
- Recovery in automotive capex spending
ContextLogic (d/b/a “Wish”)
WISH
11.1B
61/100
Wish is a global eCommerce platform focused on driving volume off of affordable and mostly
unbranded products. We view valuation attractively at current levels as the platform addresses
a massive TAM, while continuing to ramp its numerous monetization levers. We expect revenue
to rise at a 17% CAGR from ’21E-‘26E.
- Potential disruptions to US/China trade relations or Trans-Pacific shipping
- A resurgence of COVID-19 cases causing elevated eCommerce demand
- Lockup expiration on 6/16/21 or two days after 1Q21 earnings, whichever occurs first
- 1Q21 earnings
Cree
CREE
13.4B
69/100
Cree is the preeminent supplier of SiC and a leading provider of GaN-based RF devices. CREE is
- Completion of Mohawk Valley Fab and progression towards converting to 200mm node process
best positioned to facilitate power-efficient semi adoption in EVs, high-power industrial
- Expansion of its >$10B device design win pipeline, particularly within EVs
markets, and 5G infrastructure. We see CREE outperforming peers on TAM upside, a multi-year
- Additional wafer supply contract announcements
runway of GM expansion, and capacity growth that position it to drive >$5 EPS in C26E.
Despegar.com
DESP
1.2B
61/100
Despegar is the leading Online Travel Agent (OTA) in LatAm with deep expertise in payments
and multi-product bundling. They benefit from a mix shift to higher-margin Hotel & Packages
and a fragmented supplier base, a tailwind for take rate. After its latest $200M capital raise, we
believe they are well-positioned to continue rolling up smaller players in the region.
- LatAm vaccine rollout progress
- LatAm macroeconomic data
- Border openings / resumption of international travel
- Quarterly earnings
Echo Global Logistics
ECHO
0.9B
67/100
Echo provides technology-enabled transportation and supply chain management solutions. YTD
trends appear to have continued after a strong 4Q (20% increase in volume and 30% growth in
rev/shipment in TL), with robust 2021 guidance and investment initiatives that support
automation and development of its digital freight marketplace.
- Continued tightness in capacity across the TL sector pushes more freight into the spot market
- Demand remains strong throughout 2021
- Technology investments continue to bear fruit
- Potential acquisitions that are accretive and additive to the company’s service offering
Emerson Electric
EMR
54.3B
66/100
Our bull thesis is predicated on EMR’s cyclical recovery prospects (lap big AutoSol order
declines as of April), high dividend yield (2.3%), low relative valuation vs. ROK (15x
EV/EBITDA vs. 20+), and likelihood of greater investor engagement now that 20-year CEO
Dave Farr has retired.
- Q2 earnings & positive Y/Y AutoSol orders by April or May
- Dividend hike (circa Sept)
- Possible M&A/divestment announcements.
EPAM Systems
EPAM
21.0B
69/100
EPAM boasts normalized organic growth trajectory of 20%+ and is the industry leader in digital
product engineering, on track to surpass $3bn in 2021E revenue. The consistency of its growth
at unmatched scale and its diversification is attractive. To sustain its talent resourcing efforts,
EPAM provides relevant training & mentorship programs to students globally; it maintains
strong ties with leading technical institutions in E. Europe and is making a broader global push.
- Front-end consulting build-out
- Scaling investments in new geographies
- Recovery in distressed COVID verticals
- Potential M&A, supported by strong balance sheet
Source: Cowen and Company
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EQUITY RESEARCH
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Cowen ESG Scores
Company
Ticker
Market
Cap
ESG Score Cowen Opinion
Equinix
EQIX
58.6B
66/100
Evolent Health
EVH
1.8B
63/100
We see strong demand for EVH’s solutions being driven by a focus on high cost treatments and
- New long-term partnership announcements
the shift towards value-based reimbursement. Management’s decision to exit non-core
- Progress on cost reduction initiatives
businesses and focus on cost reduction efforts should drive 200-300 bp of annual adj. EBITDA
- Government mandates for value-based care
margin expansion, which should help fuel multiple expansion.
Fly Leasing
FLY
0.4B
64/100
- Increased cash collections
Diversified portfolio of in-demand narrow-body aircraft placed with mostly international flag
- Diversifying the customer list
carriers on long-term leases. Rent deferrals in 2020 are starting to be repaid, and the lack of an
- Diversifying the fleet
orderbook means it has cash available to do sale/leasebacks to increase its portfolio of aircraft.
- Strategic options including a potential sale
Hannon Armstrong
HASI
4.2B
72/100
- Participating in accelerating growth in US renewables
Accelerating growth on balance sheet projects that capture a 7.5-8.0% yield, driven by strength
- Entering new adjacent verticals – EV Charging, AgTech, and others
in energy efficiency, wind and solar.
- Additional programmatic relationships to complement JCI, SunPower and others
Horizon Therapeutics
HZNP
20.4B
67/100
We believe our most recent KOL discussions, survey results, and detailed management
commentary provide significant comfort in the actual size of the TED patient population and
that demand is likely to remain high following the supply shortage resolution. We continue to
note that if we are correct in our assumptions around Tepezza's $3B+ potential, the shares
remain materially undervalued.
- Ongoing - Tepezza launch
- Q1:2021 (end) - Viela acquisition close
- Q4:2021 Krystexxa MIRROR study results
Howmet Aerospace
HWM
13.9B
64/100
HWM is a scarce mid/large cap aero “OE” play that should print 40%+ incremental margin
as aero production rates recover given pricing gains, cost reductions, and operating
leverage. We see “peak”, recurring EPS of near $2, with potential upside if widebody rates
return to C19 levels.
- Q1 earnings
- Aero OE production rate hikes, especially on 737Max
- Improved air travel as COVID vaccine rolls out
II-VI
IIVI
7.7B
78/100
- Aggressive ramp in any one or more of a number of product and/or customer markets including 3D
IIVI is leveraged to numerous significant, long duration growth drivers. We expect virtually all of
sensing VCSELs, SiC for EV, Optical Communications, Aerospace & Defense, and Life Sciences
these to make strong contributions to growth in CY21 and beyond. We also expect IIVI to
- Industrial market recovery
continue to build on early success of FNSR acquisition and see significant opportunity for upside
- Future strategic acquisitions that enhance long-term growth and profitability
to both gross margin and operating leverage over time.
- Continued margin and profitability improvement in CY21 and beyond
Infineon Technologies
IFX
37.6B
67/100
We see Infineon as the leading power semiconductor pure-play tied to secular trends across
electric vehicles, renewable energy and datacenter power. With technological leadership in
high-voltage IGBT’s and MOSFETs, emerging franchises in GaN and SiC, and industry-leading
300mm manufacturing scale, we believe Infineon remains the best long-term pure play on the
growing power demand and efficiency in these end verticals.
- Growth in content into the auto market from EV and autonomous adoption
- Industrial automation and inverter adoption in home appliances continues
- Renewable energy economics continue to become more favorable
- October 2021 Analyst Day
Ionis Pharmaceuticals
IONS
7.5B
71/100
Ionis’s mix of industry partnerships and renewed strategic focus on internal pipeline
development have positioned the stock for catalysts from 10+ programs over the next 12
months, offering many opportunities for stock appreciation. Solid pipeline productivity should
set Ionis up for 10 new drug applications by FY25 and 6+ new drug approvals by FY26.
- Ph2 data readout with IONIS-PKK-LRx in patients with hereditary angioedema (H1:21)
- Ph2 data readout with IONIS-ENaC-2.5Rx in patients with cystic fibrosis (ATS: May 14-19, 2021)
- Ph2 data readout with IONIS-GHR-LRx in patients with acromegaly (H1:21)
- Ph2 OLE and natural history study data update with tominersen in Huntington’s disease (mid-’21)
JetBlue Airways
JBLU
6.7B
60/100
Opening New York and Boston should enable people to travel again. JBLU is growing into new
domestic markets and adding new service in international markets. The American Airlines
codeshare agreement should be accretive to earnings as early as 2021
- Relaxation of restrictions in New York and Boston enabling increased travel from the cities
- American codeshare should drive incremental traffic
- Visiting friends and relatives in the Caribbean should see a benefit around holidays
- New service to London Gatwick beginning in late summer 2021
- ABI releases & Q2 earnings
- Possible Investor Day in late C21
- Analyst Day on June 23
- Potential continued accretive tuck-in M&A
- Debt refi’s thru the year enhancing per share growth
- Proof points of accelerating traction with new product offerings
Johnson Controls
International
JCI
43.6B
62/100
The longstanding JCI bear thesis, which owed to poor FCF conversion and other historical
artifacts, is invalid. JCI's stock is due for a mean-reversion bounce (15.7x C21E EBITDA vs.
20x at TT/LII), as perception of the firm catches up with reality. On the Q1 call, JCI gave
more details on its ESG traits/goals, IAQ suite, & new products – details that should
improve investor perception of JCI's strong position within comml HVAC. Also, F21 Street
EPS has modest upside from buybacks and G&A reductions.
Lululemon Athletica
LULU
41.1B
60/100
- Reduction in COVID-19 store traffic restrictions, and a return to prior peaks in Corporate Store
LULU continues to push innovation through new product categories, services like its loyalty
Sales per sq. foot
program, and key market expansion. Given the attractive growth within the $1 trillion Sweatlife
- Growth in the install base of its MIRROR product and related membership metrics
TAM, we see substantial EPS potential for LULU of $12+/per share through FY24E, supported
- Acceleration in the growth of its men’s business, closer in-line with the growth profile of women’s
by +15% sales CAGR, EBIT margin expansion to 24.1%, and EPS CAGR of +19.7%.
- Continued high double-digit percentage growth in international markets
MacroGenics
MGNX
1.8B
62/100
MacroGenics is a clinical stage company launching its first approved drug, Margenza in HER2+
breast cancer. The company also has an extensive pipeline and one of these drugs (MGC018)
recently showed a promising signal in prostate cancer, which is of high interest to investors. We
expect significant news flow from the company in the next 12 months as the pipeline matures.
- Phase II/III data of Margenza in gastric cancer patients from Module A of MAHONGAY (1H21)
- Phase I dose expansion data from MGC018 in mCRPC, NSCLC and TNBC (Mid-2021)
- Final OS results from Phase III SOPHIA trial of Margenza in breast cancer (2H21)
- Pivotal Flotetuzumab data in patients with AML (2H21)
Mersana Therapeutics
MRSN
1.3B
60/100
Mersana uses two proprietary platforms to generate high drug-to-antibody ADCs with
desirable drug properties. MRSN’s lead drug, XMT-1536, targets clinically validated NaPi2b and
has reported encouraging activity in platinum-resistant ovarian cancer patients. The company
announced a single-arm registrational study of XMT-1536 (UPLIFT) that is enrolling.
- Initiation of the single-arm UPLIFT study of XMT-1536 in ovarian patients (1Q21)
- Phase I data from XMT-1536 in NSCLC patients (2H21)
- Phase I data from Dolasynthen candidate XMT-1592 (2H21)
- Initiation of UPGRADE combination study of XMT-1536 in ovarian patients (3Q21)
Moog
MOG/A
2.7B
62/100
Moog is a cyclical rebound play with comml aircraft (13% of sales) at a destock low and
Industrial (31% of sales) depressed, while defense/space (56% of sales) offers stable prospects.
Lots of potential margin upside in FY22 (9/22) and beyond as aircraft productivity initiatives
and cyclical leverage kick in. Yet it carries a modest 11.4x TEV/EBITDA with a 6.8% CF yield.
- Space continues to outperform
- Industrial turns up in June Q
- Aircraft productivity & supply chain initiatives boost margins
- Share repurchase
Myers Industries
MYE
0.7B
68/100
With organic growth plus M&A likely to fuel +20% top-line / +35% EPS growth for several years
to come, we expect investor attention will over time increase for a company that remains
largely under the radar today. Risk appears skewed to the upside, in our view, for this well-run,
COVID-neutral GARP stock.
- Investing in Myers is a play on its new CEO Mike McGaugh, who joined in March 2020
- Significant organic growth as retooled sales & marketing arm yields market share gains
- M&A pipeline: Myers, trading at 9-10x EBITDA, acquires targets at 6-7x pre-synergies or 4-5x post
- Quarterly results risk skewed to the upside, in our opinion
Par Pacific Holdings
PARR
0.9B
61/100
Peer-leading opex and limited capex in 2021-2023 should result in cash flow torque to a
refining margin recovery. That cash flow should allow PARR to delever the balance sheet from
75% ND/Cap in 2021 to ~45% in 2023. A recent sale-leaseback reduced the risk of a liquidity
crunch mid-21.
- New Hawaii sales contracts commencing 1Q21
- Jet demand improvement
Scholar Rock
SRRK
2.2B
65/100
Scholar Rock is leveraging unique insights into the structure of the TGFb superfamily to design
drugs that more selectively target this family of important proteins than has been possible
previously. Lead asset apitegromab has generated compelling proof-of-concept data in spinal
muscular atrophy (SMA) and has $2B+ sales potential.
- 12-month data from apitegromab’s TOPAZ trial in SMA (Q2:21)
- Initial data from SRK-181’s Phase I dose escalation in PD-(L)1 resistant patients (H2:21)
- Initiate pivotal trial for apitegromab in SMA (H2:21)
- Nominate additional indications for apitegromab (2021)
ServiceNow
NOW
95.1B
66/100
NOW is the unquestioned ITSM market leader (>50% share in 2019) while rapidly expanding its - 1Q earnings (April)
product portfolio. NOW has created a powerful platform that can automate workflow processes - Workflow use-cases broadening and expanding throughout enterprises
to drive digital transformation across the enterprise. We believe NOW represents a unique
- Continued adoption of ITSM Pro (AI-infused SKU), which drives upward pressure on ASPs
organic top line growth story with best-in-class margins for its profile.
- Further penetration of emerging products such as Customer & Employee Workflows
STMicroelectronics
STM
33.7B
72/100
STMicro has been an early winner in electric vehicle adoption as it continues to invest and win
in the emerging silicon carbide market, with SiC revenue set to increase from <$300M in 2020
to $450-$500M in 2021 split ~80/20 between Tesla and non-Tesla customers. More broadly,
we believe ST still represents an undervalued and diverse leading-edge mixed-signal provider
tied to multiple secular growth verticals in the auto and industrial markets.
Source: Cowen and Company
8
Catalysts
Despite questions on the cadence of LT organic growth/EBITDA margins, we believe that EQIX
is making the right investments that will help extend its growth opportunity for longer and that
2021 margins will represent a trough. We believe its YTD underperformance provides an
attractive entry point to own a high-quality company including above avg. growth/returns
enabled by its high barriers of entry and strong secular trends.
COWEN.COM
- Automotive design win announcements
- Consistent execution should drive above-consensus/peer growth
- 5G and smartphone content win announcements
- Margin improvement from internal cost cutting and utilization improvement
COWEN
EQUITY RESEARCH
March 18, 2021
Cowen ESG Scores
Company
Ticker
Market
Cap ($)
ESG Score Cowen Opinion
Catalysts
TransMedics
TMDX
1.2B
62/100
Despite some ongoing challenges from COVID-19, TMDX is poised for a breakout year in 2021,
with multiple near-term catalysts that should drive its shares higher. By year-end, the company
should have all three of its organ programs generating U.S. commercial sales. In addition, we
expect TMDX’s service model to more than double its geographic footprint this year.
- April 6 FDA panel for DBD Heart
- Possible 2Q’21 FDA panel for Liver
- Possible U.S. approval in DBD Heart around midyear 2022
- Release of the DCD Heart trial results in 3Q, followed by a U.S. filing the same quarter
Trinity Industries
TRN
3.2B
63/100
TRN is one of the largest railcar lessors in North America. The company is also one of two railcar
builders enjoying ~75% of the manufacturing market. With the negative impacts of Precision
Scheduled Railroading (PSR) on equipment demand largely reflected in the current operating
network, and with rail traffic growing after nearly two years of decline, TRN is well positioned
to benefit from a likely recovery in railcar demand.
- Rail traffic inflecting positive in 2021
- Rail service hiccups associated with a lean rail network, traffic growth, and weather disruptions
- Lease rates should continue to post sequential improvements as the industry’s railcars in storage
continue to decline and freight conditions remain strong
Wabtec Corp
WAB
14.5B
62/100
WAB is North America’s largest freight locomotive manufacturer and a global provider of
freight and transit rail equipment and services. While the new-build freight locomotive outlook
in North America is very challenging for the next few years, that should be more than offset by
an increasingly positive outlook in most other segments, including the high margin aftermarket
business.
- Rail traffic inflecting positive in 2021
- Rail service hiccups associated with a lean rail network, traffic growth, and weather disruptions
- Technology investments in battery electric transit locomotives and zero-to-zero freight locos.
- Digital automation in rail.
Source: Cowen and Company
COWEN.COM
9
COWEN
EQUITY RESEARCH
March 18, 2021
Cowen’s Best ESG Investment Ideas For 2021
Pricing as of 3/17/2021
Company Name
ABB
Accuray
American Eagle Outfitters
Applied Materials
Aptiv
Aurinia Pharmaceuticals
Avaya
Axsome Therapeutics
Baker Hughes
Brown-Forman
Calix
Ceridian HCM Holdings
ChargePoint
Cognex
ContextLogic (d/b/a “Wish”)
Cree
Despegar.com
Echo Global Logistics
Emerson Electric
EPAM Systems
Equinix
Evolent Health
Fly Leasing
Hannon Armstrong
Horizon Therapeutics
Howmet Aerospace
II-VI
Infineon Technologies
Ionis Pharmaceuticals
JetBlue Airways
Johnson Controls International
Lululemon Athletica
MacroGenics
Mersana Therapeutics
Moog
Myers Industries
Par Pacific Holdings
Scholar Rock
ServiceNow
STMicroelectronics
TransMedics
Trinity Industries
Wabtec Corp
Ticker
ABBN
ARAY
AEO
AMAT
APTV
AUPH
AVYA
AXSM
BKR
BF/B
CALX
CDAY
CHPT
CGNX
WISH
CREE
DESP
ECHO
EMR
EPAM
EQIX
EVH
FLY
HASI
HZNP
HWM
IIVI
IFX
IONS
JBLU
JCI
LULU
MGNX
MRSN
MOG/A
MYE
PARR
SRRK
NOW
STM
TMDX
TRN
WAB
Price
$26.45
$5.29
$30.36
$119.90
$153.23
$14.01
$31.40
$68.08
$23.98
$71.75
$48.25
$89.01
$24.01
$83.27
$18.84
$116.38
$17.56
$33.53
$90.52
$373.88
$656.45
$21.22
$14.08
$53.77
$91.13
$32.16
$73.39
$28.77
$53.35
$21.18
$60.52
$315.22
$31.31
$18.17
$84.64
$19.97
$16.06
$65.09
$485.00
$36.99
$45.40
$28.62
$76.80
Market Cap ($mn)
57,356
491
5,061
110,028
41,443
1,784
2,635
2,547
24,949
33,474
3,013
13,246
6,669
14,658
11,059
13,411
1,228
892
54,315
21,004
58,613
1,827
429
4,202
20,420
13,945
7,688
37,575
7,515
6,693
43,591
41,085
1,761
1,255
2,720
719
948
2,230
95,109
33,707
1,243
3,176
14,507
Source: Cowen and Company
10
COWEN.COM
Rating
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Outperform
Price Target
$35
$8
$31
$140
$160
$35
$40
$135
$32
$100
$45
$109
$43
$105
$28
$150
$8
$40
$95
$425
$811
$25
$13
$68
$120
$32
$124
$40
NA
$17
$59
$389
NA
NA
$95
$25
$21
NA
$620
$49
$44
$34
$90
Analyst
Joseph Giordano
Joshua Jennings, M.D.
Oliver Chen
Krish Sankar
Jeffrey Osborne
Ken Cacciatore
Lance Vitanza
Joseph Thome, Ph.D.
Marc Bianchi
Vivien Azer
Paul Silverstein
Bryan Bergin
Gabe Daoud, Jr.
Joseph Giordano
John Blackledge
Karl Ackerman
Kevin Kopelman
Jason Seidl
Gautam Khanna
Bryan Bergin
Colby Synesael
Charles Rhyee
Helane Becker
Jeffrey Osborne
Ken Cacciatore
Gautam Khanna
Paul Silverstein
Matthew Ramsay
Yaron Werber, M.D.
Helane Becker
Gautam Khanna
John Kernan
Boris Peaker, Ph.D.
Boris Peaker, Ph.D.
Cai von Rumohr
Lance Vitanza
Jason Gabelman
Marc Frahm, Ph.D.
Derrick Wood
Matthew Ramsay
Joshua Jennings, M.D.
Matthew Elkott
Matthew Elkott
Sector
Diversified Industrials, Automation & Robotics
Radiation Oncology
Branded Apparel
Semiconductor Capital Equipment
Mobility Technology
Pharmaceuticals/Specialty
Telecom
Biotechnology
Oilfield Services
Alcoholic Beverages
Telecom & Networking Equipment
Software
Batteries & EV Charging
Diversified Industrials, Automation & Robotics
E-Commerce
Semiconductors
Online Travel
Air Freight & Logistics
Multi-Industry
Computer Services & IT Consulting
Data Centers
Health Care IT
Aircraft Leasing
Sustainability
Pharmaceuticals/Specialty
Commercial Aerospace
Telecom Equipment/Wireless
Semiconductors
Biotechnology
Airlines
Multi-Industry
Athletic Footwear and Apparel Brands
Biotechnology
Biotechnology
Multi-Industry
Containers & Packaging
Refining & Marketing
Biotechnology
Software
Semiconductors
Medical Supplies & Devices
Transportation OEMs
Transportation OEMs
COWEN
EQUITY RESEARCH
March 18, 2021
VALUATION METHODOLOGY AND RISKS
Valuation Methodology
Diversified Industrials, Automation & Robotics:
We utilize multiple analysis and discounted cash flow (DCF) analysis to value companies
under coverage. We employ both EV/EBITDA and P/E multiple analysis and look at historical
valuation multiples (typically 5- and 10-year averages) as well as current and historical
multiples for competitor or representative companies. We evaluate the subject company
independently and in terms of its comp group. In certain instances, we may look at current/
recent transaction multiples to evaluate the subject company. When utilizing DCF analysis,
we include a sensitivity table to both discount and terminal growth rates.
Medical Supplies & Devices:
Our valuation methodology is primarily based on current year and forward year EV/Sales
and EV/EBITDA multiples, as well as current year and forward P/E multiples, total return/PE
ratio, market cap/free cash flow metrics, and dividend yield comps.
Retailing/Specialty Stores:
Our valuation methodology is primarily based on Price-to-Earnings (P/E), followed by
Enterprise Value to EBITDA (EV/EBITDA), Price-to-Free Cash Flow (P/FCF) ratios, and DCF
analysis. We may also use Enterprise Value to Revenue (EV/Revs) for companies operating
at depressed levels of profitability. In some cases we use probability weighed, scenariobased decision trees as a basis for devising our price targets. We incorporate the company’s
and its peers’ historical and current valuation multiples, as well as our analysis of future
growth rates, company-specific risks, return on invested capital, and other inputs from our
research when devising our valuation multiples and the probabilities we assign to different
scenarios when developing our price targets.
Semiconductor Capital Equipment:
Our valuation methodology is primarily based on a P/E multiple applied to our out year
EPS forecast. In some cases we employ a sum-of-the-parts (SOTP) calculation where an
appropriate P/E multiple is applied to forward earnings projections for the different business
segments, plus estimated excess net cash per share.
Pharmaceuticals/Specialty
For our valuation methodology, we arrive at fair value utilizing a discounted cash flow (DCF)
approach and additional assumed business development to derive our 12-month price
target.
Biotechnology:
In calculating our 12-month target price, we employ one or more valuation methodologies,
which include a discounted earnings analysis, discounted cash flow analysis, net present
value analysis and/or a comparable company analysis. These analyses may or may not
require the use of objective measures such as price-to-earnings or price-to-sales multiples as
well as subjective measures such as discount rates.
Semiconductors:
Our valuation methodology is primarily based on forward P/E multiples plus cash followed
by EV/EBITDA. In many cases, we use EV/sales as a third methodology.
Internet:
Our valuation methodology is primarily based on Discounted Cash Flow analysis, comparable
company multiples such as EV/FCF, EV/EBITDA, and P/E, and sum-of-the-parts analysis (for
companies with ownership stakes in other equities or significant assets such as patents/
IP). However, this varies by company; for instance, we will often use EV/Revenue for highgrowth companies that have recently entered the public equity markets.
COWEN.COM
11
COWEN
EQUITY RESEARCH
March 18, 2021
Electrical Equipment & Multi-Industry:
We use a combination of Price-to-earnings (P/E), total enterprise value to EBITDA, free cash
flow yield (on stock price), and cash flow yield. We tend to favor GAAP P/Es for most multi
industry companies.
Communications Infrastructure:
Our valuation methodology consists of an absolute and relative value approach. We arrive
at a fair value utilizing either 1) a five-year discounted cash flow (DCF), 2) a segmented sumof-parts (SOP) analysis, or 3) a segmented hybrid valuation using both a SOP and a NAV
analysis. Our relative value approach takes into account EV/EBITDA, EV/FRE, P/FFO, P/
AFFO, dividend yield, cap rates, P/FCF, P/FRE, and when applicable P/E.
Health Care Technology & Distribution:
We use a five-year discounted cash flow analysis as our primary valuation method to
derive our 12-month price target. We generally assume a 10% discount rate but may apply
appropriate adjustments depending on company and/or industry specific factors. We also
assume a terminal growth rate that is dependent on our long-term view of the specific
sub-industries under coverage. We note our discount rate assumption could be viewed as
conservative relative to the actual weighted average cost of capital, but we view our 10%
assumption as reasonable over the long run. Lowering our discount rate assumption or
increasing our terminal growth rate assumption would lead to a higher estimated value
per share. As a secondary measure, we look at the forward P/E multiple and EV/Sales ratio
implied by our DCF analysis and compare that to historical averages.
Aerospace & Defense Electronics:
Price target methodology: We use a combination of Price-to-earnings (P/E), total enterprise
value to EBITDAP (P = FAS/CAS pension adjustment), free cash flow yield (on stock price),
and cash flow yield. We tend to favor GAAP P/Es for most commercial aerospace companies
and TEV/EBITDAP for defense primes with large defined benefit plans with share Y/Y
swings in FAS/CAS. We also use sum-of-the-parts for companies with sharply disparate
businesses of meaningful size (GD, TXT, SAIC).
Apparel, Footwear & Textiles:
Our valuation methodology is primarily based on Price-to-Earnings (P/E), supplemented by,
in some cases, Enterprise Value to EBITDA (EV/EBITDA) and Price-to-Free Cash Flow (P/
FCF) ratios and DCF analysis. We may also use Enterprise Value to Revenue (EV/Revs) for
companies operating at depressed levels of profitability. In some cases we use probabilityweighed, scenario-based decision trees as a basis for devising our price targets. We
incorporate the company’s and its peers’ historical and current valuation multiples, as well as
our analysis of future growth rates, company-specific risks, return on invested capital, and
other inputs from our research when devising our valuation multiples and the probabilities
we assign to different scenarios when developing our price targets.
Sustainability:
Our primary inputs to valuation are earnings and earnings growth (P/E and PEG) for the
next two years. In cases where GAAP net income includes large, non-cash items (e.g., SBC
or intangible amortization), we may use non-GAAP EPS. For companies with an emerging
business model, we may use future-year earnings discounted back. As a cross check to an
earnings multiple, we may also use a DCF analysis. For situations where earnings are not
visible within our forecast horizon, we may use asset values (P/Book, P/TBV).
Mobility Technology:
Our primary inputs to valuation are earnings and earnings growth (P/E and PEG) for the
next two years. In cases where GAAP net income includes large, non-cash items (e.g., SBC
or intangible amortization), we may use non-GAAP EPS. For companies with an emerging
business model, we may use future-year earnings discounted back. As a cross check to an
earnings multiple, we may also use a DCF analysis. For situations where earnings are not
visible within our forecast horizon, we may use asset values (P/Book, P/TBV).
12
COWEN.COM
COWEN
EQUITY RESEARCH
March 18, 2021
Telecom:
Our valuation is based on a number of factors, including but not limited to, an issuer’s
underlying business prospects and credit profile as well as current market conditions. Our
view of an issuer’s business outlook includes, but is not limited to: (1) an assessment of
relevant industry trends, (2) the issuer’s position within its industry and how its position
might change over time, (3) management’s strategy and the likelihood that management
will be able to execute its strategy. Our view of the issuer’s credit profile includes, but is
not limited to, the issuer’s: (1) overall leverage as well as the composition of its leverage,
(2) liquidity and its ability to meet its obligations as they come due, and (3) the value of its
assets. Our valuation of a specific security includes, but is not limited to: (1) the potential
recovery in a variety of scenarios, including financial restructurings, and the probability of
each, and (2) its liquidity relative to other securities. Our valuation contemplates a variety of
capital market environments.
We make investment recommendations on early stage (pre-commercial) biotechnology
companies based upon an assessment of their technology, the probability of pipeline
success, and the potential market opportunity in the event of success. However, because
these companies lack traditional financial metrics, we do not believe there are any good
methodologies for assigning a specific target price to such stocks.
Oilfield Services:
We favor Unlevered FCF yield to value companies within our coverage universe by
normalizing across varying capital structures and working capital cycles. The companies
with greater international exposures, stable end markets, larger backlogs, and more modern
assets typically trade at higher yields.
Our valuation methodology is primarily based on Price-to-Earnings (P/E), followed by
Relative Price-to-Earnings (vs. the S&P 500), Price-to-Sales (P/S) as well as Enterprise Value
to EBITDA (EV/EBITDA). In cases where GAAP net income includes large, non-cash items
(e.g., restructuring charges), we may use non-GAAP EPS.
Data Networking & Wireline Equipment:
Our valuation methodology is based on Price to Earnings per Share (P/E) and in cases where
the company lacks consistent positive earnings, Enterprise Value to Revenue (EV/Rev). In
certain cases, our valuation is also informed by a discounted cash flow (DCF) analysis.
Software:
Our valuation methodology is primarily based on Enterprise Value to Free Cash Flow (EV/
FCF), followed by Price-to-Earnings (P/E). However, this varies by company; for instance,
we will often use Enterprise Value to Revenue (EV/Revs) or a discounted cash flow (DCF)
analysis for software companies that are primarily subscriptions-based, or for growth
companies that have recently entered the public equity markets.
Batteries & EV Charging:
Our valuation process uses the average of our DCF and revenue multiple-based methods.
Given the nascent nature of these industries and the rapid adoption of electric vehicles
expected over the next decade we utilize a 10-15 year time frame in both methods. Our DCF
analysis includes key assumptions around discount rates and long term growth. We typically
discount out-year revenue to the near-term before applying a multiple, given our actual
near-term estimates represent a transition period as these companies begin to scale. This
allows us to more easily compare to established players in the broader Mobility Technology
space.
Airfreight & Logistics:
We use one-year forward PE multiples to value covered companies in the air freight and
logistics industry. We support our valuation with EV/EBITDA and tangible book value
analysis.
Computer Services & IT Consulting:
COWEN.COM
13
COWEN
EQUITY RESEARCH
March 18, 2021
We use forward P/E and EV/EBITDA multiples to value the companies in the Computer
Services industry. We support our valuation with cash per share analysis.
Aircraft Leasing:
We use a combination of Enterprise Value (EV) to EBITDA, Price to Earnings ratio and Book
Value analysis for valuing the Aircraft Lessors.
Telecom Equipment/Wireless:
Our core valuation methodology is the analysis of a company’s prospects to change its cash
flow in future periods. Our primary tool to measure that expected change in cash flow – and
the value of it today – is the 10-year DCF. Since earnings are typically a solid proxy for cash
flow and are often more easily compared across companies and sectors, we also use Priceto-Earnings (P/E) ratios to value companies. P/E ratios compared to historical ranges and
competitive companies can help to determine whether there is incremental value to be found
in company shares.
Airlines:
We generally use a combination of Enterprise Value to EBITDAR and P/Es to the value the
group.
Containers & Packaging:
Our valuation methodology is primarily based on an EV / EBITDA framework. We focus
primarily on forward EV / EBITDA multiples of companies we deem comparable and apply
relative value analysis to determine an appropriate multiple for each covered company. We
also consider Discounted Cash Flow analyses as well as precedent M&A transactions and
sum-of-the-parts analyses to the extent we deem appropriate.
Refining & Marketing:
We use a sum-of-the-parts methodology to value the Refining & Marketing sector, with
refining and retail assets valued on a FCF yield basis. MLP interests are valued on a yield
basis to the parent company. For refining segments, pricing assumptions are based on the
forward strip, adjusted for geographical footprint, average feedstock quality, product yield,
and appropriate differentials by crude type.
Medical Supplies & Devices:
Our valuation methodology is primarily based on current year and forward year EV/Sales
and EV/EBITDA multiples, as well as current year and forward P/E multiples, total return/PE
ratio, market cap/free cash flow metrics, and dividend yield comps.
Transportation OEM:
We generally use one-year forward PE multiples to value covered companies in the
transportation OEM sector. We support our valuation with EV/EBITDA and Price-to-book
analyses.
Investment Risks
Retailing/Specialty Stores:
Risks to the companies in our sector include risks and uncertainties associated with the
global economic environment and consumer spending, as well as general competition
within the consumer and fashion products industries and fluctuating consumer demand
trends, which can create variability in sales and margins. Increases in the prices of raw
materials, rent, freight, labor, tariffs, or manufacturers’ inability to produce goods on time or
to specifications may negatively impact results. Execution flaws and the departure of certain
key executives may negatively affect performance and financial results. Legal, regulatory,
political, currency, and economic risks, as well as challenges to maintain favorable brand
recognition, loyalty, and reputation for quality, may affect the ability to conduct business in
both domestic and international markets.
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Semiconductor Capital Equipment:
The semiconductor capital equipment (SPE) industry has a strong correlation to
semiconductor industry capex and global GDP trends. We expect SPE industry revenues
to be less cyclical in nature going forward given consolidation in the WFE customer base.
However, the occurrence of chip supply-demand imbalances, the timing of process node
transitions and the yields from WFE customer production lines, and chip technology design
trends can have a meaningful impact on equipment demand from time to time.
Pharmaceuticals/Specialty
Risks include: (1) growing competitive dynamics in the specialty pharmaceuticals space;
(2) the ability of management to execute on external growth by successfully acquiring
new strategic, accretive products; (3) the ability to grow organically and keep the product
pipeline robust; (4) potential regulatory delays, rejections, or failures of pipeline products; (5)
economic sensitivity of any self-pay products or weakening consumer demand; (6) domestic
or international pricing pressures for marketed products; and (7) failure to execute on new
product launches.
Biotechnology:
There are multiple risks that are inherent with an investment in the biotechnology sector.
Beyond systemic risk, there is also clinical, regulatory, and commercial risk. Additionally,
biotechnology companies require significant amounts of capital in order to develop their
clinical programs. The capital-raising environment is always changing and there is risk that
necessary capital to complete development may not be readily available.
Semiconductors:
The semiconductor industry is cyclical and has strong correlation to global GDP. If global
growth slows, consumer demand and IT spending could impact our forecasts. Additionally,
pricing pressure is severe in certain parts of the market, particular those that are consumer
focused.
Electrical Equipment & Multi-Industry:
A number of end markets are subject to government regulations that may change.
Most multi-industry companies report an effective tax rate that is below the U.S. corporate
tax rate.
Communications Infrastructure:
Risks Include: (1) Communication Infrastructure stocks can be more sensitive to movements
(or expectation of movements) in interest rates with higher/lower rates often leading to
an outsized decrease/increase in stock price; (2) rapidly changing/disruptive technology,
new product/service offerings, and evolving industry/technology standards could have
an impact on demand and/or pricing; and (3) deterioration in the macro environment both
domestically and internationally could lead to a reduction in demand and a consequent
impact on valuation multiples.
Apparel, Footwear & Textiles:
Risks to the companies in our sector include risks and uncertainties associated with the
global economic environment and consumer spending, as well as competition within
consumer and fashion products industries and fluctuating consumer demand trends,
which can create variability in sales and margins. Increases in the prices of raw materials,
rent, freight, labor, tariffs, or manufacturers’ inability to produce goods on time or to
specifications may negatively impact results. Execution flaws and the departure of certain
key executives may negatively affect performance and financial results. Legal, regulatory,
political, currency, and economic risks, as well as challenges to maintain favorable brand
recognition, loyalty, and reputation for quality, may affect the ability to conduct business in
both domestic and international markets.
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Sustainability:
Demand for Sustainable Technology may be strongly influenced by government regulations,
subsidies, and mandates as well as the overall health of the global macro economy. Share
prices and financial results may be sensitive to policy changes and outcomes may be difficult
to predict, due to the political nature of the process.
Mobility Technology:
Demand for Mobility Technology is largely a function of global automotive and truck
production. A slowdown in sales would lead to lower demand by OEMs for content from
suppliers. The pace of adoption for connected vehicle, autonomous systems, vehicle
electrification, and safety may be strongly influenced by government regulations, subsidies,
and mandates. Share prices and financial results may be sensitive to policy changes and
outcomes may be difficult to predict, due to the political nature of the process.
Diversified Industrials, Automation & Robotics:
A general decline in the industrial production index, coupled with a global decrease in
automation spending as a percentage of total capex could negatively impact the sector and
the implied industry growth rate as well as leading to additional project delays.
Sustained pressure in emerging markets (especially countries with lower labor wages) could
cause delays in automation implementation in several sectors, including general industrial,
automotive, logistics, medical, and aerospace as factory upgrades are delayed.
Significant, lasting changes in the prices of key commodities, such as oil and natural gas
could have material impact on upstream, midstream, and downstream applications. For
example, a sharp increase in domestic natural gas projects could make LNG export facilities
in the US less attractive and cause delays or cancellations of planned domestic chemical
facilities. Sharp declines in oil and gas prices could lead to reduced production activity and
therefore reduce demand for midstream logistics and downstream processing applications.
Radiation Oncology:
(1) placement and timing of systems risk; (2) financing risk; (3) continued utilization pressure
in the U.S. as Accountable Care Organizations play a bigger role in health care delivery;
(4) competitive dynamics globally; (5) potential regulatory delays, rejections, or failures
of systems evaluated in clinical trials; (6) economic sensitivity, pricing pressures and/
or weakening consumer demand in developed markets; (7) economic and/or political
uncertainty in emerging markets; (8) intellectual property challenges.
Telecom:
Investment risks include, but are not limited to: (1) industry trends, (2) changes in the issuer’s
competitive position, (3) management’s strategy and its ability to execute its strategy,
(4) the issuer’s financial and operational leverage, (5) the issuer’s liquidity versus its cash
requirements, (6) changes in the issuer’s ability to access the capital markets, and (7)
changes in the liquidity of a particular security.
Primary Oilfield Services Investment Risks Include:
A material change in commodity prices has the potential to change our view on the entire oil
service and drilling sector. A deterioration in the economic climate, increasing non-OPEC oil
production or international political and economic risks could impede the price performance
of the shares.
The strength of the global economy and its impact on the global demand for oil and natural
gas.
Upstream (E&P) budget fluctuations that directly impact demand for oil services, which may
be affected by M&A, commodity prices, or access to capital markets.
Capacity expansions within various product lines in the oilfield services industry that may
create supply overhangs and influence marginal pricing.
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Political issues that may lead to higher taxes on the industry or limit access to potential
resource developments, due to geopolitical issues or regulatory changes.
Technology changes that may negatively impact the lifecycle of various products and
services.
The global beverage industry is subject to a number of potential headwinds. For alcoholic
beverages, heightened regulation and taxation are key risks, as is emerging access to legal
cannabis. For non-alcoholic beverages, declining consumption, in particular for carbonated
soft drinks, represents a key headwind, as do health and wellness concerns around artificial
sweeteners. What is more, energy drinks have also come under scrutiny, which has resulted
in softer demand, as well as litigation and regulatory risks.
Data Networking & Wireline Equipment:
(1) rapidly changing/disruptive technology, particularly software defined networking,
network functions virtualization, and virtualization could have an adverse impact on
demand and/or pricing; (2) deterioration in the macro environment both domestically
and internationally could lead to a reduction in enterprise IT spending and service
provider capital expenditures with a consequent adverse impact on Data Networking and
Communication Equipment companies’ revenue and valuation multiples; and (3) further
consolidation among service providers or adverse regulatory changes on service providers
could lead to a reduction in their capital expenditures.
Software:
The global economy or specific end markets significantly worsen, contracting IT spending
and impairing software growth. The rate of SaaS/Cloud adoption slows, resulting in
prolonged sales cycles and higher-than-anticipated quarterly volatility across much of our
coverage universe. Competition increases materially, driving deflationary pricing pressure
and compressing margins. In particular, innovation by new entrants in the software sector
often produces solutions with similar or better functionality at materially lower prices than
incumbents’ legacy offerings.
Batteries & EV Charging:
Demand for Batteries and EV Charging is largely a function of the electrification of vehicles
globally. A slowdown in EV penetration due to lagging OEM production or consumer
preference would lead to smaller end markets for these products and services. The pace
of adoption for vehicle electrification may also be strongly influenced by government
regulations, subsidies, and mandates. Share prices and financial results may be sensitive to
policy changes and outcomes may be difficult to predict, due to the political nature of the
process.
Online Travel:
The global economy could worsen significantly, contracting consumers’ travel spending and
impairing industry growth. Online travel companies generate a significant portion of their
traffic from Google, which is developing a competing product. Competition, both between
online travel companies and with offline travel companies, could increase materially,
decreasing pricing power and commission rates, and requiring incremental advertising
spend, which could compress margins. Online travel companies face the risk that they are
unable to keep pace with new innovations or that new innovations impact competitive
positioning. Companies with operations across multiple geographies are exposed to currency
fluctuations and country-specific operating risks.
Primary Air Freight and Logistics Industry Risks:
■ Risk of economic downturns and their potential impact on the integrated parcel business.
■ Rising fuel prices could significantly increase operating costs.
■ Competitive threat posed by other modes of freight transportation such as rail and
trucking.
■ Risk of doing business abroad including currency exchange, political, and legal risks.
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■ Risk of terrorism and the costs associated with more stringent security requirements.
Multi-industry sector risks:
Global business factors the key incremental risk; individual areas keyed to end market
conditions
Computer Services & IT Consulting:
Global economic growth could impact discretionary spending
The IT Services industry is sensitive to global economic growth. During a downturn or a
recession, clients tend to reduce discretionary spending, which would have a direct negative
impact on revenue growth at global and offshore IT Services vendors.
Wage inflation
If wage costs increase at a faster rate than billing rates, IT Services vendors will experience a
negative effect on margins and profitability. In addition, if wage costs will increase at a faster
rate than the historical average, the vendors’ services could become less attractive for N.A.
and European clients, which will impact efficiency, utilization and profitability. In addition,
the issuance of stock based compensation for IT professionals could result in dilution to
shareholders.
Foreign exchange risk
While the companies’ consolidated financial statements are reported in U.S. dollars, a portion
of the revenues (varies by company) is generated in other currencies (euros, INR, British
pounds, etc.). In addition, in most cases, costs are not incurred in U.S. dollars. For example,
the offshore vendors incur most of their costs in INR. This creates a currency and hedging
risk.
Health Care IT:
There are potential risks associated with the HCIT space: (1) a significant amount of
spending on HCIT has been driven by government related programs (i.e., HITECH Act),
and any slowdown or cuts in such programs could negatively impact spending on HCIT;
(2) constrained hospital budgets could potentially lead to a decrease in HCIT-related
investments; (3) customer losses as a result of facility consolidation in both the inpatient
and outpatient markets could create challenges for a number of vendors; (4) greater price
competition in the HCIT industry; and (5) the current focus on Meaningful Use incentives
could delay purchasing decisions for non-EHR related solutions and services.
Primary Aircraft Leasing Investment Risks ■ Financing Risk. Lessors use the capital markets to raise money for the purpose of
■
■
■
■
acquiring aircraft. If access to the capital markets is limited, it would affect the company's
ability to expand its fleet, and limit future growth.
Debt covenant risk. The company borrows substantially to acquire aircraft, and there are
debt covenants in all of its debt agreements. In the event the company did not have access
to capital, or in the event the company's leases were non-performing and there is a delay
in repossessing aircraft could mean the company would not be in compliance with debt
covenants.
Asset risk. Airlines use operating leases to lease aircraft without residual risk. The aircraft
owner bears the risk of asset ownership. As a result, if the value of the aircraft decline, the
company would be hurt.
Competition. The aircraft leasing market is very competitive. There are several private
lessors that influence the new and secondary aircraft market.
Economic Risk. The airline industry is highly risky due to its cyclical nature, as well as its
economic sensitivity.
Commercial Aerospace sector risks · Cyclical slowing in growth of global GDP, passenger & cargo air traffic
· Sharp lift in interest rates to short circuit replacement demand
· Spike in oil prices dampening airline profitability (and traffic if ticket prices are hiked to
offset)
· Growth in airline capacity from new deliveries exceeding the rate of air traffic growth
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· Execution risk of bringing new products to market.
· Ability of U.S. airlines to gain labor scope clause changes permitting use of larger RJ’s
· Competition from new foreign entrants
· Threat to suppliers from Boeing’s Partner for Success program
· Raw material availability
Telecom Equipment/Wireless:
High subsidies on mobile smartphones are the result of high end-user ARPUs; if ARPU
declines, we would expect mobile phone ASPs to decline, pressuring OEM profitability.
Mobile voice has driven wireless ARPU for two-plus decades; if the industry cannot convince
end-users to increase dramatically data and Internet application consumption then revenue
(ARPU) would be impacted. CAPEX to support the roll-out of LTE, LTE-A, and other 4G
networks must stay available for our forecasts to be maintained; if a decline in global GDP
occurs, CAPEX likely would be impacted negatively.
Primary Airline Investment Risks:
■ Economic and Geopolitical Risk. Airlines are affected by worldwide economies, especially if
they have international operations.
■ Fuel Risk. Fuel represents ~30% of expenses and the companies have limited visibility into
price changes.
■ Liquidity. Airlines are capital intensive and there are times when the markets are capital
constrained, which affects their ability to finance aircraft purchases.
■ Credit card processing fees. Credit card companies often require airlines to maintain
capital reserves related to future air travel.
■ Seasonality. The airlines generally use cash in 1Q and 4Q and generate cash in 2Q and 3Q.
■ Fare Risk. Fares may not rise as fast as expenses putting pressure on margins.
■ Government Regulation. The industry is highly regulated and taxed.
■ Terrorist Attacks and the outbreak of diseases. The unpredictability of terrorist attacks
and disease outbreaks gives the airlines little margin of error.
■ Labor Risk Some airlines are having issues attracting qualified pilots and mechanics which
could limit their growth.
■ Insurance Costs. Hull insurance varies from year to year, but is generally affected by the
number of accidents in the previous year.
■ Environmental Costs. Airlines are subject to various laws and government regulations
concerning environmental matters and employee safety and health around the world
Containers & Packaging:
(1) A downturn in general business and economic conditions pose risks as the sectors and
end-markets served are exposed to both economic cyclicality and changes in consumer
preferences. (2) The industry in which these companies operate is very competitive. (3)
An increase in raw material costs or disruption of available raw materials could adversely
impact operations. (4) Risks associated with an extended interruption to production at
manufacturing facilities could adversely impact operations. (5) A consolidation of the
customer and supplier base could intensify pricing pressure. (6) Risks associated with
strategic growth initiatives including the ability to identify suitable acquisition candidates
at a reasonable price and the realization of improved operating results as a result of M&A.
(7) Incurrence of debt to fund strategic initiatives could increase the risk associated with
leverage and the ability to meet obligations and otherwise restrict activities.
Refining & Marketing:
The refining market is highly cyclical, and the majority of companies’ earnings are on a spot
basis. Spreads between crude feedstock and product prices are highly volatile, and the
earnings outlook for the industry can change rapidly. Additionally, the refining industry is
highly regulated, and subject to unforeseen costs based on new legislation.
Medical Supplies & Devices
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(1) competitive dynamics globally; (2) potential regulatory delays; (3) potential delays in the
timing of product launches in emerging and developed markets; (4) economic sensitivity,
pricing pressures and/or weakening consumer demand in developed markets; (5) economic
and/or political uncertainty in emerging markets; (6) changes in tax laws; (7) outlook for
dividends and share repurchases; and (8) fluctuations in foreign exchange rates.
Primary Transportation OEM Risks:
■ The transportation OEM industry is highly cyclical; the timing of the cyclicality may be
■
■
■
■
■
■
■
■
difficult to predict; and down cycles could weigh on the top and bottom lines of companies
in the sector.
The industry is highly dependent on the North American and global economies. Economic
downturns could pose a threat to the companies’ earnings power.
Fluctuations in the price of steel and other materials used in the manufacture of
equipment could be unfavorable at times.
Currency fluctuations could negatively impact production costs and demand for finished
products.
Potentially unfavorable shifts in freight among transportation modes, such as between rail
and trucking, could impact demand for certain types of transportation equipment.
Relatively high capital expenditure requirements.
Relatively high fixed cost structure.
Regulatory risk.
Litigation risk.
E-Commerce:
The industry in which our companies operate is fiercely competitive and technological
change is rapid. All of our companies face the risk that they are unable to keep pace with
new innovations or that new innovations impact competitive positioning. Our companies are
international operators and are therefore exposed to currency fluctuations and other factors
associated with operating in a foreign territory. Finally, our names sit within traditional
commerce and retail space and are exposed to the same seasonality and macro trends as the
rest of the industry, including competition from offline retailers.
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ADDENDUM
Analyst Certification
Each author of this research report hereby certifies that (i) the views expressed in the research report accurately reflect his or her personal views about any and all of the subject
securities or issuers, and (ii) no part of his or her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed in this report.
Important Disclosures
Jason Seidl, the author of this research report, served as President of The North East Association of Rail Shippers (NEARS), a rail transportation industry group, for a two-year term
from September 27, 2017 through September 2019. Jason is currently the Chairman of the NEARS Executive Committee.
This report constitutes a compendium report (covers six or more subject companies). As such, Cowen and Company, LLC chooses to provide specific disclosures for the companies
mentioned by reference. To access current disclosures for the all companies in this report, clients should refer to https://cowen.bluematrix.com/sellside/Disclosures.action or contact
your Cowen and Company, LLC representative for additional information.
Cowen and Company, LLC compensates research analysts for activities and services intended to benefit the firm's investor clients. Individual compensation determinations for research
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Disclosures.action
The recommendation contained in this report was produced at March 17, 2021, 22:07 ET. and disseminated at March 18, 2021, 05:30 ET.
Copyright, User Agreement and other general information related to this report
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COWEN AND COMPANY EQUITY RESEARCH RATING DEFINITIONS
Outperform (1): The stock is expected to achieve a total positive return of at least 15% over the next 12 months
Market Perform (2): The stock is expected to have a total return that falls between the parameters of an Outperform and Underperform over the next 12 months
Underperform (3): Stock is expected to achieve a total negative return of at least 10% over the next 12 months
Assumption: The expected total return calculation includes anticipated dividend yield
Cowen and Company Equity Research Rating Distribution
Distribution of Ratings/Investment Banking Services (IB) as of 12/31/20
Rating
Count
Ratings Distribution
Count
IB Services/Past 12 Months
Buy (a)
538
67.17%
156
29.00%
Hold (b)
258
32.21%
19
7.36%
5
0.62%
0
0.00%
Sell (c)
(a) Corresponds to "Outperform" rated stocks as defined in Cowen and Company, LLC's equity research rating definitions. (b) Corresponds to "Market Perform" as defined in Cowen
and Company, LLC's equity research ratings definitions. (c) Corresponds to "Underperform" as defined in Cowen and Company, LLC's equity research ratings definitions. Cowen and
Company Equity Research Rating Distribution Table does not include any company for which the equity research rating is currently suspended or any debt security followed by Cowen
Credit Research and Trading.
Note: "Buy", "Hold" and "Sell" are not terms that Cowen and Company, LLC uses in its ratings system and should not be construed as investment options. Rather, these ratings terms
are used illustratively to comply with FINRA regulation.
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POINTS OF CONTACT
Analyst Profiles
Cowen Research
Jeffrey Osborne
Thomas Boyes
New York
Stamford
New York
646 562 1330
646 562 1391
646 562 1378
cowen.research@cowen.com
jeffrey.osborne@cowen.com
thomas.boyes@cowen.com
Jeff Osborne is an analyst covering
sustainable energy tech. He has a BS from
Trinity University and an MBA from Wayne
State University.
Thomas Boyes is an associate covering
sustainable energy technology. He has a BS
in finance from Saint Joseph's University.
Emily Riccio
Jeffrey Rossetti
Karl Ackerman, CFA
New York
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San Francisco
646 562 1383
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415 646 7219
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jeffrey.rossetti@cowen.com
karl.ackerman@cowen.com
Emily Riccio is an associate covering
sustainable energy technology. She
received a BA in economics from Trinity
College.
Jeff Rossetti is an associate covering
sustainable energy technology. He joined
Cowen in December 2014.
Vivien Azer
Helane Becker
Bryan C. Bergin, CFA
New York
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New York
646 562 1351
646 562 1399
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the past 30+ years. She has an MBA from
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storage supply chain. He was named a
Rising Star by II in '17.
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CFA charterholder and a certified public
accountant.
Marc Bianchi, CFA
John Blackledge
Ken Cacciatore
New York
New York
New York
646 562 1393
646 562 1359
646 562 1305
marc.bianchi@cowen.com
john.blackledge@cowen.com
ken.cacciatore@cowen.com
Marc Bianchi is an analyst covering oilfield
services. He joined Cowen in May 2013, and
has worked at Turner Investments.
John Blackledge is a senior analyst covering
the Internet sector. He joined Cowen in
2012 as the head of Internet research.
COWEN.COM
Ken is a senior analyst covering specialty
pharmaceuticals. He has been with Cowen
for 20 years in health care banking & equity
research.
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