Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MORGAN STANLEY BOOSTS COCA-COLA TO OVERWEIGHT: Morgan Stanley analyst Dara Mohsenian upgraded Coca-Cola to Overweight from Equal Weight and raised his price target for the shares to $55 from $52. The company's growth outlook is "clearly superior" relative to the packaged goods space, but this is not reflected in the current share price, Mohsenian tells investors in a research note. Coca-Cola's valuation discount is "unfair" as it offers structurally higher sales growth compared to peers, adds the analyst. Mohsenian attributes the company's below-consensus 2019 guidance to currency and feels it should have a minimal impact on Coca-Cola's valuation.
JPMORGAN CUTS DEERE TO UNDERWEIGHT: JPMorgan analyst Ann Duignan downgraded Deere (DE) to Underweight from Neutral and lowered her price target for the shares to $132 from $154. The analyst coupled the downgrade with an upgrade of Agco (AGCO) to Overweight from Neutral. The analyst sees "rapidly deteriorating" fundamentals in U.S. agriculture. Beyond tariffs, Chinese import demand for soybeans is likely to decline significantly as it deals with a ~30% reduction in its hog herd following the outbreak of African swine fever, Duignan tells investors in a research note. Further, Brazil and Argentina combined have produced close to record soybean and corn crops this season, while U.S. dollar strength remains a headwind for U.S. competitiveness on the global market, adds the analyst. She sees a "perfect storm" for U.S. farmers and believes the fundamentals for Deere are now skewed to the downside.
PIPER CUTS STEVEN MADDEN, G-III TO NEUTRAL: Piper Jaffray analyst Erinn Murphy downgraded Steven Madden (SHOO) to Neutral from Overweight and lowered her price target for the shares to $32 from $38. The company produces a large amount of its goods in China, Murphy told investors in a research note. The analyst reduced her estimates based on the existing tariffs in place, which she sees impacting Steven Madden's second half earnings. The company's exposure to China and the recently proposed tariffs to the apparel/footwear categories will weigh on its multiple, says Murphy. The analyst also downgraded G-III Apparel (GIII) this morning for a similar rationale.
TYSON BOOSTED AT ARGUS, CREDIT SUISSE: Argus analyst John Staszak upgraded Tyson Foods (TSN) to Buy with a price target of $92, also raising his FY19 EPS view by 10c to $6.20 and his FY20 target by 25c to $6.75. The analyst contended that the "growing demand for proteins" is positive for the company and other meat processors, with Tyson's beef division seeing an "especially strong demand". Staszak further cited the company's efforts to increase sales of prepared foods to meet the "steady demand and strong margins" while noting the 12.8-times forward earnings multiple on Tyson Foods stock, which is below the average large-cap food processor multiple of 18.4-times and in the lower half of its historical 9- to 19-times range.
Credit Suisse analyst Robert Moskow upgraded Tyson Foods to Outperform from Neutral and raised his price target on the shares to $96 from $74. The analyst noted that consensus estimates already factor in stronger Chicken margins based on a rebound in the U.S. supply-demand cycle domestically. However, he does not think they fully account for the upside to chicken, beef, and pork prices from the outbreak of African Swine Fever.
MORGAN STANLEY CUTS SHOPIFY TO UNDERWEIGHT: Morgan Stanley analyst Brian Essex downgraded Shopify (SHOP) to Underweight from Equal Weight, citing his view that the stock is not deserving of the same multiple as high-growth U.S. Software-as-a-Service companies as less than half of Shopify's revenue comes from subscriptions. Most of Shopify's revenue is transaction-based and its mix is shifting increasingly toward transaction-based revenue, said Essex, who adds that he thinks investors are overpaying for Shopify's Merchant Solutions business at the stock's current valuation. Essex raised his price target on Shopify shares to $209 from $173, however, as he changed his valuation framework to sum-of-the-parts from discounted cash flow.
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