Today's noteworthy initiations include: BlackBerry (BBRY) initiated with a Buy at TD Securities... British American Tobacco (BTI) initiated with a Buy at Berenberg... Cabot Oil & Gas (COG) initiated with a Buy at SunTrust... Celestica (CLS) initiated with a Hold at TD Securities... Devon Energy (DVN) initiated with an Equal Weight at Stephens... Fitbit (FIT) initiated with an Outperform at Oppenheimer... Imperial Tobacco (ITYBY) initiated with a Buy at Berenberg... Kite Pharma (KITE) initiated with an Outperform at RBC Capital... Mellanox (MLNX) initiated with a Buy at Roth Capital.

After the Biden Administration confirmed an earlier Wall Street Journal report that it will abandon plans to ban menthol cigarettes, Jefferies analyst Owen Bennett said that while the most was widely expected, it now takes the headline risk off the table near-term. The matter could potentially resurface after the election, though if Donald Trump wins, this would be less likely, the analyst tells investors in a research note. The firm noted that the move is a boost in sentiment for British American Tobacco (BTI), Altria (MO), and Imperial Brands (IMBBY), but specifically for British American, which is most exposed. Jefferies has Buy ratings on Altria and British American Tobacco and a Hold rating on Imperial Brands.

Bullish option flow detected in British American Tobacco with 13,934 calls trading, 7x expected, and implied vol increasing over 1 point to 19.80%. May-24 30 calls and May-24 31 calls are the most active options, with total volume in those strikes near 10,100 contracts. The Put/Call Ratio is 0.08. Earnings are expected on July 25th.

Stifel analyst Matthew Sheerin raised the firm's price target on Celestica to $48 from $36 and keeps a Hold rating on the shares. The firm is raising estimates following what it calls "another strong beat-and-raise," noting that hyperscale cloud customers now account for nearly 40% of revenue. Celestica raised its FY24 sales and EPS targets "significantly" on expectations of continued demand for AI servers as well demand for 400- and 800-G switches, noted the analyst.

CIBC downgraded Celestica to Neutral from Outperformer with a price target of $49, up from $41. The company's Q1 results and outlook for Q2 and 2024 "were excellent" as it continues to benefit from compute capacity demand from hyperscalers related to generative artificial intelligence, the analyst tells investors in a research note. However, a deceleration in its enterprise segment due to customer demand shifting to its communications segment "raises a new risk factor," says CIBC. The firm believes it increases the possibility of slowing company growth in revenue and earnings. As a result, it expects lower growth in revenue and in earnings for the second half of 2024 and for 2025.