Check out today's top analyst calls from around Wall Street, compiled by The Fly.
AMAZON ON MARCH TO $3,000: Piper Jaffray analyst Michael Olson believes shares of Amazon.com will reach $3,000 between mid-2021 and mid-2022, or within 24-36 months. The analyst says his confidence in the 65% share rally is based on what he believes to be relatively conservative growth and valuation assumptions that are incorporated into his sum-of-the-parts analysis. Olson assumes a multi-year deceleration in growth for every major category of Amazon's business, along with "very minimal" adjustment to comp group multiples, "despite Amazon growing significantly faster than comps in both the cloud and advertising segment." Amazon shares can reach $3,000 with no major acquisitions or other significant changes to the business, Olson tells investors in a research note. He admits, however, that a potential Web Services spin-off would "no doubt" help to highlight the "relatively low valuation of the other segments." The analyst maintains an Overweight rating on Amazon.com with a 12-month price target of $2,225.
STIFEL SEES 40% UPSIDE FOR ALIBABA: Stifel analyst Scott Devitt added Alibaba (BABA) to his firm's Select List while keeping a Buy rating on the shares with a $220 price target. The 12% pullback in the stock since the company's Q4 results, due to trade war concerns, an Altaba (AABA) selling event, and concern over near-term investment in growth initiatives, has created an opportunity to own shares with a long-term investment horizon, Devitt tells investors. The stock now trades at 13 times estimated fiscal 2021 EBITDA, and is "even cheaper" on earnings from Alibaba's core marketplace-based businesses, said Devitt, who sees 40% upside from current share levels.
CONSTELLATION CUT TO EQUAL WEIGHT ON VALUATION, BEER RISK: Morgan Stanley analyst Dara Mohsenian downgraded Constellation Brands to Equal Weight from Overweight, which he said is "mainly" due to the 36% rise in the stock from its January 9 low. However, to a lesser extent, the change in rating is due to an increasing risk of a potential beer demand slowdown this summer as the company laps successful innovation and strong results in the same period of last year, Mohsenian tells investors. Given that scanner data and industry feedback point to "subpar weather and just OK results" so far in the current quarter, he also sees modest risk to his 8% beer depletion forecast for the company's fiscal first quarter, the analyst added. Given the greater beer revenue risk he now sees, Mohsenian lowered his price target on Constellation shares to $220 from $230.
JEFFRIES STARTS APHRIA AT BUY: Jefferies analyst Owen Bennett initiated coverage of Aphria (APHA) with a Buy rating and C$15 price target. The analyst says the company scores highly on his "strategic scorecard," or third overall behind only Canopy Growth (CGC) and Aurora Cannabis (ACB). Despite a "strong global outlook," Aphria's valuation is the cheapest across the cannabis space, with allegations around inflated assets/insider deals weighing on the shares, Bennett tells investors. The analyst expects a "significant re-rating" in the shares with "these issues now seemingly cleared up." He points out that the company's questionable relationships have been severed and a special committee review found assets had not been falsely inflated. Bennett believes Aphria continues to execute and that its valuation is "not reflective of reality."
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