Check out today's top analyst calls from around Wall Street, compiled by The Fly.
TESLA INITIATED WITH UNDERPERFORM, FORD AND GM WITH OUTPERFORMS: Tesla (TSLA) was initiated with an Underperform at Credit Suisse while Ford (F) and General Motors (GM) initiated with an Outperform.
Credit Suisse analyst Dan Levy initiated coverage of Tesla with an Underperform rating and $189 price target. While Tesla currently leads in areas that will likely define the future of car making, the company faces "risks ahead" and is "likely to settle as a niche automaker," Levy told investors in a research note.
Levy, meanwhile, initiated Ford with an Outperform rating and $13 price target. The analyst acknowledges that Ford faces a number of risks ahead, as it redesigns its business to address profitability, while concurrently pursuing a longer-term reimagining of the business. Yet he sees upside for the stock, as there have been early signs of improvement with more to come.
Levy also initiated General Motors with an Outperform rating and $48 price target. The analyst believes General Motors is "one of the best players" in his coverage in balancing the "near and far," and offering a compelling narrative on both fronts.
GOLDMAN CUTS NORDSTROM, ROSS STORES TO SELL: Goldman Sachs analyst Alexandra Walvis downgraded Nordstrom (JWN) to Sell from Neutral and lowered her price target for the shares to $30 from $37, and downgraded Ross Stores (ROST) to Sell from Neutral and lowered her price target for the shares to $91 from $102. The analyst is taking a "conservative stance" on the retail sector. The headwinds in Q2 have proven persistent, said Walvis, who sees risk that a second half of the year inflection in earnings growth may not materialize for many companies. She believes Nordstrom's ongoing "comp headwinds" in full line and off price stores are compounded by its ongoing strategic investments and the opening of the company's flagship in New York City. She believes the recent rally in Ross shares is overdone given the risks that recent execution challenges persist. Further, Walvis forecasts limited upside from the company's strategic initiatives.
OWENS CORNING BOOSTED AT BOFA, SEAPORT: BofA/Merrill analyst John Lavallo upgraded Owens Corning (OC) to Buy from Neutral and raised his price target to $72 from $58, citing potential portfolio momentum following another special situations focused investor building a position in Owens shares. The analyst said the building sector may be entering a period of deconsolidation and companies such as Owens can create shareholder value more effectively allocating capital towards higher growth opportunities and returns, or towards buybacks, dividends, and debt reduction.
Seaport Global analyst Reuben Garner upgraded Owens Corning to Neutral from Sell following reports HG Vora Capital Management has built a stake in the company and plans to explore a sale and/or break-up. Garner said Owens story has now shifted from one of structural fundamentals to one focused on unlocking value for shareholders.
PIPER SAYS NETFLIX CAN RALLY 50%: Netflix (NFLX) has "significant room" to grow subscribers based on various ways of slicing the company's total addressable market, Piper Jaffray analyst Michael Olson said. The analyst has historically used fixed broadband households as the Netflix addressable market, but he now believes this is "too limiting" given the potential for mobile-first and mobile-only users to adopt the service, especially outside of the U.S. When looking at current Netflix adoption as a percentage of internet or pay-TV households, Olson sees international "significantly" lagging domestic, suggesting potential for "dramatic" international growth in the coming years. While consensus estimates assume a high rate of ongoing international sub growth, "relatively more aggressive scenarios" have a realistic chance of playing out, Olson tells investors in a research note. Looking to 2021, the analyst believes investor anticipation around potential for greater than 20% penetration of Netflix across global internet households could lead to a ~50% move in the stock over the next 12-18 months. Olson kept an Overweight rating on Netflix shares with a $440 price target.
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