Check out today's top analyst calls from around Wall Street, compiled by The Fly.
TEVA UPGRADED TO OUTPERFORM AT OPPENHEIMER: Oppenheimer analyst Esther Rajavelu upgraded Teva Pharmaceutical (TEVA) to Outperform from Perform while lowering her price target for the shares to $12 from $17. The shares, trading at its 19-year low, offer a buying opportunity, Rajavelu told investors in a research note. The analyst believes Teva's business fundamentals continue to improve and that management's execution on the operational front is generally in line with expectations. She acknowledged, however, that legal uncertainties could remain an overhang the stock. Rajavelu estimates the company's opioid liability exposure at $500M-$700M and believes its price-fixing exposure could be "substantially higher." Teva's balance sheet, assuming the refinancing of certain debt tranches, could sustain $400M in average annual penalties over time, said the analyst.
INFINERA CUT TO UNDERWEIGHT AT JPMORGAN: JPMorgan analyst Samik Chatterjee downgraded Infinera (INFN) to Underweight from Neutral without a price target. The analyst sees a "heightened level of near-term and medium-term risks from the much more moderate level" of capex spending from cable customers. This is in addition to the already existing long-term risks relative to the acquisition, Chatterjee told investors in a research note.
BIG LOTS DOUBLE DOWNGRADED TO UNDERPERFORM AT BOFA: BofA/Merrill analyst Jason Haas double downgraded Big Lots (BIG) to Underperform from Buy and cut his price target for the shares to $23 from $45. The company's outlook for the rest of the year may be too optimistic and could be cut further, Haas told investors in a research note. The analyst believes shares of Big Lots "will continue to struggle" until consistent improvement in earnings growth is demonstrated.
MOLINA BOOSTED TO OUTPERFORM AT WELLS: Wells Fargo analyst Peter Costa upgraded Molina Healthcare (MOH) to Outperform from Market Perform and raised his price target to $177 from $139 following the company's analyst day, saying management management highlighted the long-term sustainability of margins and growth which Costa thinks should be attainable if Molina can avoid losing ground in upcoming contract rebids, including Texas, and if it can push its in-market growth strategy at the expense of its managed care competitors. While some found the high margin guidance to be a concern, Costa told investors in a research note that he believes the low new business win guidance of $1.5B-2.B over 3-5 years to be supportive of the long-term Medicaid after-tax margin guide of 2.8%-3.2%.
WELLCARE CUT TO MARKET PERFORM AT BMO: BMO Capital analyst Matt Borsch downgraded WellCare Health Plans (WCG) to Market Perform from Outperform with an unchanged price target of $304. The analyst sees Centene (CNC) as the better stock to own ahead of the pending merger. There is also the possibility of deal failure, which would leave a standalone investment in WellCare that would probably include less takeout premium than prevailed pre-merger, Borsch told investors in a research note.
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