Check out today's top analyst calls from around Wall Street, compiled by The Fly.
CITI UPGRADES GRUBHUB TO BUY: Citi analyst Mark May upgraded GrubHub (GRUB) to Buy from Neutral and increased his price target on the stock to $91 from $75, citing five primary factors he sees to be more bullish on the stock. Those include data that suggests that GrubHub may be in early tests with McDonald's, Starbucks and other large chains; his belief that the stock's multiple will expands if investors reward the company for new chain deals; GrubHub's ability to grow Gross Food Sales in the 20% range, which should allow it to hit its Q4 EBITDA/order guidance; a new driver pay formula that could benefit margins; and robust growth in the overall online food delivery market.
BRIGHTHOUSE DOWNGRADED AT GOLDMAN, CREDIT SUISSE: Goldman Sachs analyst Alex Scott downgraded Brighthouse Financial (BHF) to Sell from Neutral and lowered his price target on the shares to $32 from $39 as he believes the company's capital plans may come under pressure. Lower interest rates may result in little to no distributable earnings from the variable annuity business, he does not see a material redundancy in the universal life captive and there is still regulatory risk from the updated VA Capital Reform and deductible approach to hedging, all of which will make it harder for subsidiary Brighthouse Life Insurance to begin making ordinary cash remittances to the holding company, Scott said.
Credit Suisse analyst Andrew Kligerman also downgraded Brighthouse Financial to Underperform from Neutral on risk, and lowered his price target on the shares to $22 from $35. The analyst believes the stock appears expensive given its volatile distributable earnings and new accounting pressure.
MICROSOFT SHARES OVERVALUED, SAYS JEFFERIES: Jefferies analyst John DiFucci said he continues to believes Microsoft (MSFT) shares are "materially overvalued," contending that evidence suggests that the widely-held assumption that Azure profit will come with scale, similar to how it did for Amazon Web Services (AMZN), is incorrect. Azure will likely never see margins similar to AWS at scale, argued DiFucci, who also thinks AWS long-term margins may be lower than most expect. The analyst, who admits that Microsoft "is one of the greatest software success stories in the short history of the sector," kept an Underperform rating on the stock and raised his price target on the shares to $90 from $80.
CREDIT SUISSE INITIATES FAST FOOD STOCKS: Credit Suisse analyst Lauren Silberman initiated Shake Shack (SHAK), Chipotle (CMG), Starbucks (SBUX), and McDonald's (MCD) with Outperform ratings, Yum! Brands (YUM) and Wendy's (WEN) with Neutral ratings, and Jack in the Box (JACK) and Dunkin' Brands (DNKN) with Underperform ratings, among others.
LOOP CUTS TIFFANY TO HOLD: Loop Capital analyst Laura Champine downgraded Tiffany (TIF) to Hold from Buy and lowered her price target to $95 from $110. In a research note to investors, Champine said she believes weak tourist traffic continues to impact global demand levels, adding that she is "concerned" that same-store sales growth may prove more difficult to achieve as the company laps its paper flowers launch. While the analyst said the stock is attractive in the longer term, she is "concerned" that wealthy customers could delay purchases in the more volatile environment with general global growth concerns and the ongoing tariff situation.
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