Check out today's top analyst calls from around Wall Street, compiled by The Fly.
TWITTER DOUBLE UPGRADED, NAMED BEST IDEA: BofA Merrill Lynch analyst Justin Post upgraded Twitter (TWTR) two notches, to Buy from Underperform, after conducting a survey in early December of more than 1,000 U.S. consumers ages 18-65. The survey showed Twitter penetration increased to 48% of respondents and the percentage of users reporting deceased usage fell slightly. Improving metrics in the 18-29 demographic suggest more younger users are turning to Twitter, noted Post. The analyst, who sees Twitter as a strong play on video ad dollars shifting online and advertisers potentially diversifying their ad spending, raised his price target on Twitter shares to $39.
JPMorgan analyst Doug Anmuth named Twitter a best Internet idea for 2019 along with Facebook (FB) and Amazon.com (AMZN). Twitter shares increased 20% in 2018 on "continued solid" daily active user growth, "significant" revenue re-acceleration following 2017 declines, and the company's first full year of GAAP profitability, Anmuth tells investors in a research note. Going into 2019, he believes Twitter is making "meaningful progress on its health work identifying malicious and spammy content." Quality improvements should drive benefits to usage and advertising revenue long-term, adds the analyst. Further, Anmuth's channel checks suggest Twitter's advertising products and improving return on investment "are increasingly resonating with marketers." The analyst lowered his price target for the shares to $44 from $45 and kept an Overweight rating on Twitter.
In late morning trading, shares of Twitter are higher by 2.4% to $33.02.
ANALYSTS POSITIVE ON BOEING: Susquehanna analyst Charles Minervino initiated coverage of Boeing (BA) with a Positive rating and $388 price target, telling investors in a research note of his own that he believes the commercial airplane market is still in an order upcycle. The analyst said customers need to replace aging fleets while catering to growing travel demand and the recent pullback in the stock makes the shares attractive.
Morgan Stanley analyst Rajeev Lalwani upgraded shares of Boeing to Overweight from Equal Weight and raised his price target to $450 from $400, saying he is comfortable with the Commercial Aerospace cycle alongside the selloff in Boeing shares, which are down about 15% from its recent highs. "Barring a downturn, the resilience of the EPS and FCF profile should remain in place within Commercial Aerospace, which is supported by airline profits and air traffic holding steady following the decline in oil," the analyst contended. In addition, Lalwani added that he sees compounding growth coming from buybacks, production hikes and margin improvement of 15%-20%, "all from a management that has proven to be best-in-class."
In late morning trading, shares of Boeing are higher by 1.45% to $348.82.
MACY'S CUT TO UNDERPERFORM AFTER HOLIDAY MISS: After Macy's (M) reported Q4 comparable sales growth that missed expectations, BofA Merrill Lynch analyst Lorraine Hutchinson downgraded the stock to Underperform from Neutral. The holiday quarter "is typically Macy's time to shine," and she sees this miss at a time "while the consumer is great" as problematic for the company's comparable sales outlook entering FY19, Hutchinson tells investors. The analyst, who thinks Macy's will need to continue to invest heavily to maintain its current level of sales, materially lowered her estimates following the company's announcement and cut her price target for Macy's shares to $18 from $39.
In late morning trading, Macy's shares are lower by 18.5% to $25.84.
YELP CUT TO UNDERWEIGHT AT MORGAN STANLEY: Morgan Stanley analyst Brian Nowak downgraded Yelp (YELP) to Underweight from Equal Weight as he identified three building revenue headwinds that he believes will lead to negative revisions and underperformance of the stock. First, Nowak sees the increased flexibility of Yelp's new non-term agreements leading to lower spend per customer. Second, he sees pricing compression risk given that his ad pricing analysis shows Yelp's average cost per click is still over four times higher than Google (GOOGL) and Facebook. Third, he expects Yelp's declining user base to further hold back spend per customer. Nowak cut his price target on Yelp shares to $29 from $31, noting that his revised FY19 and FY20 EBITDA estimates are now 2% and 6%, respectively, below consensus. In late morning trading, Yelp shares are lower by over 6% to $33.53.
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