Check out today's top analyst calls from around Wall Street, compiled by The Fly.
GOLDMAN SACHS BOOSTS MACY'S TO NEUTRAL: Goldman Sachs analyst Alexandra Walvis upgraded Macy's (M) to Neutral from Sell while lowering her price target for the shares to $21 from $23. Following the company's Q1 results, the analyst sees a more balanced risk/reward in the wake of the stock's recent underperformance. Since her Sell initiation on September 3, 2018, Macy's shares have fallen 41%. While the company continues to face "fading fundamentals" in the medium term as secular challenges weigh, the stock's near term risk/reward is now less skewed to the downside, Walvis tells investors in a research note. Further, she believes Macy's planned quantification of its cost savings program this fall and a potential update on the monetization of Herald Square as potential near-term catalysts for the shares.
ARGUS CUTS OCCIDENTAL TO HOLD: Argus analyst Bill Selesky downgraded Occidental Petroleum (OXY) to Hold after its confirmed purchase of Anadarko Petroleum (APC) for $76 per share, saying the company is overpaying for the assets with a bid well above that of Chevron's (CVX) $65 per share offer. The analyst believes that Occidental will "have difficulty" achieving the forecasted $3.5B cost synergies from the transactions. Selesky also contends that Anadarko's LNG and offshore assets are not a good strategic fir for Occidental, adding that its valuation multiple near the low end of 52-week range is "warranted."
IOVANCE 'BIG WINNER' OF ASCO UPDATES: Jefferies analyst Biren Amin called the data reported by Iovance Biotherapeutics the "big winner" ahead of the American Society of Clinical Oncology annual meeting. The ASCO update suggests Iovance's tumor infiltrating lymphocytes therapy could open the door for cell therapy in the "lucrative" solid-tumor market, Amin told investors in a research note. He pointed out the company reported that no new patients have progressed in the melanoma trial and offered first evidence of clinically meaningful durability for TIL therapy. Also, its cervical data that reported a 44% overall response rate is three-times greater than reported with Merck's (MRK) Keytruda in a similar patient population, contended Amin. He believes the update could drive a 30%-40% rally in shares of Iovance. The analyst kept a Buy rating on the name with a $29 price target.
Baird analyst Madhu Kumar raised his price target for Iovance Biotherapeutics (IOVA) to $34 from $29 and maintained an Outperform rating, citing increased tumor-infiltrading lymphocyte technology conviction on ASCO abstracts in cervical cancer and metastatic melanoma. The abstracts for Phase 2 data for TIL technology increases his conviction in Iova's TILs, particularly in cervical cancer, the analyst said in a research note.
RBC BOOSTS KB HOME TO OUTPERFORM: RBC Capital analyst Mike Dahl upgraded KB Home (KBH) to Outperform from Sector Perform and raised his price target to $30 from $25, saying his analysis signals sequential improvement in pricing dynamics, with "better breadth of base floor plan price increases" and fewer instances of pricing reductions for both plans and spec inventory. The analyst also pointed to "early signs of recovery" in the company's Western markets, which is expected to support KB Home's second half margins. Dahl added that the gap between small to mid-cap builders like KB Home and larger builders will narrow.
COMPASS POINT SEES TURNAROUND FOR AIG: Compass Point analyst Bijan Moazami has evaluated five of the most problematic lines of business at AIG (AIG), namely other liabilities claims-made, other liabilities occurrence, workers' compensation, commercial multi-peril and commercial auto liability. These lines represent roughly half of AIG's U.S. domestic business, and the bulk of its reserves, he noted, adding that the $6.6B of premiums AIG earned from these lines last year, is only a fraction of the $14B it wrote in 2009. Meanwhile, the company took $12.9B in reserve charges, over the past decade, to deal with deficiencies, Moazami added. Overall, the analyst pointed out that his data indicates that re-underwriting in the past couple years has turned-around loss trends, with frequency and severity of losses down sharply, and AIG now appears "too conservative" on its newer accident-years loss assumptions. He rates AIG as his top pick in the P/C segment, and reiterated a Buy rating and $66 price target on the shares.
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