Check out today's top analyst calls from around Wall Street, compiled by The Fly.
DEUTSCHE CUTS AKAMAI TO SELL: Deutsche Bank analyst Vijay Bhagavath downgraded Akamai Technologies (AKAM) to Sell from Hold and lowered his price target for the shares to $58 from $64. The analyst's estimates for fiscal 2019 through fiscal 2021 are below consensus for both sales and earnings. He's calling for 20% downside to current share levels. While Bhagavath sees little risk to March quarter expectations, he sees an "in line to light" sales outlook for the June quarter for Akamai. His downgrade to Sell is based on fundamentals.
STIFEL CUTS NU SKIN TO SELL: Stifel analyst Mark Astrachan downgraded Nu Skin Enterprises (NUS) to Sell from Hold and cut his price target for the shares to $43 from $63. The analyst sees increasing uncertainty surrounding direct selling companies in China relating to the investigation announced in January into the unlawful promotion and sale of health products. Further, the recent death of a Nu Skin registered customer who refused medical treatment believing company products would treat illness resulted in the company being cited in two communist party publications, Beijing Youth Daily and China Daily, with the latter calling for an investigation into the woman's death and Nu Skin's misleading advertising, Astrachan noted. The analyst admitted he's unable to determine whether an investigation will be undertaken, but he says the mention in prominent party publications is reminiscent of events in 2014 that ultimately resulted in Nu Skin suspending meetings and recruitment, resulting in sales declines for two years in China. Astrachan cites increasing regulatory concerns in China for his downgrade of Nu Skin shares to Sell.
BERNSTEIN DOWNGRADES TEXAS INSTRUMENTS, ANALOG DEVICES: Bernstein analyst Stacy Rasgon downgraded Texas Instruments (TXN) to Market Perform from Outperform, with a $115 price target, after the shares recent run. While the analyst would not "talk anyone out of owning" shares for the long-term, given the broader set-up he might prefer to put new money to work in other parts of the space with more valuation support. Rasgon acknowledged that Texas Instruments' numbers are "unaggressive," though he does see some potential for a bit of gross margin headwinds. Overall, the analyst believes the shares appear "reasonably fairly valued" at this point.
Rasgon also downgraded Analog Devices (ADI) to Market Perform from Outperform, with a $120 price target, after the shares recent run. The analyst noted that his original Analog Devices upgrade a year ago was based on valuation renormalization, which has now occurred. While the company may be able to grind some more growth out of the communications story it seems to be expected at this point, he contended.
DEUTSCHE SAYS BUY HONEYWELL, SELL 3M: Deutsche Bank analyst Nicole DeBlase is making a "Catalyst Call" to buy shares of Honeywell (HON) and sell shares of 3M (MMM). The analyst sees continued potential for earnings beats and full year guidance raises from Honeywell given its "attractive exposure" to late-cycle end markets. These include, according to the analyst, aerospace and defense and non-residential construction, along with secular growth drivers such as warehouse automation. On the other hand, DeBlase forecasts a "substantial" 4% earnings miss in Q1 for 3M. The company is exposed to a number of end markets that have faced quarter-over-quarter deterioration, including automotive and electronics and China, the analyst noted. She does not view even the low end of 3M's guidance as achievable. Moreover, she pointed out that 3M is the most expensive stock she covers. DeBlase has a Buy rating on Honeywell and a Sell rating on 3M.
JEFFERIES CUTS FINANCIALS TO UNDERWEIGHT: Jefferies analyst Steven DeSanctis is "very surprised" by last week's Federal Reserve's decision taking rate hikes completely off table in 2019. The "shocking" Fed meeting means lower rates for longer, which is not good for Financials, DeSanctis told investors in a research note. A "lack of catalysts and weaker earnings growth" going forward for the entire sector, not just banks, means an Underweight rating on the space makes sense, said the analyst. As such, he downgraded his rating on the Financial sector to Underweight from Market Weight. Publicly traded companies in the space include Bank of America (BAC), Citi (C), Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), U.S. Bancorp (USB) and Wells Fargo (WFC).
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street