Check out today's top analyst calls from around Wall Street, compiled by The Fly.
GOLDMAN UPGRADES SNAP, STITCH FIX: Goldman Sachs analyst Heath Terry upgraded Snap (SNAP) to Buy from Neutral and raised his price target for the shares to $18 from $13. The company's new Android app, the launch of Snap Games and new viral lenses should accelerator user growth, Terry tells investors. He points out that Snap's total app downloads for May, the first month reflecting these recent innovations, was a record 41M in a "stark reversal" of what were otherwise multi-year lows in app downloads that the platform experienced through most of 2018 and early 2019. Terry also upgraded Stitch Fix (SFIX) to Buy from Neutral with an unchanged price target of $38. Recent developments in product that enable existing users to order additional colors, prints, and sizes of items they have already purchased should be a tailwind for Stitch Fix's wallet share, Terry tells investors.
CITI UPGRADES MORGAN STANLEY, DOWNGRADES WELLS FARGO: Citi analyst Keith Horowitz made seven rating changes in the U.S. Banks space after updating his estimates and target prices for a new base case rate forecast that more closely reflects the forward curve. This includes two interest rate cuts in 2019 and 2020. The lower rate assumptions led him to lower his normal return on tangible equity estimates ~100 basis points on average. Following these changes, Horowitz upgraded Morgan Stanley (MS) to Buy from Neutral, downgraded Comerica (CMA), Northern Trust (NTRS) and M&T Bank (MTB) to Sell from Neutral, and downgraded Wells Fargo (WFC), Citizens Financial (CFG) and Fifth Third (FITB) to Neutral from Buy.
NETFLIX APP DOWNLOAD TRENDS SEEN WEAKENING: Credit Suisse analyst Douglas Mitchelson told investors in a research note this morning that Netflix (NFLX) app download trends weakened "dramatically" in the second quarter, with global downloads up 8% year-over-year vs. an increase of 24% y/y in the first quarter. This was driven by price increases and was anticipated in guidance, said Mitchelson, who maintains an Outperform rating, $450 price target and second quarter estimates. However, he sees downside risk and little upside potential for Q2 international net adds from Netflix.
ALTRIA UP TO BUY: Goldman Sachs analyst Judy Hong upgraded Altria (MO) to Buy and kept her price target at $59, saying the valuations in the tobacco sector are trading at a 10-year trough in spite of the "more accommodating" macro backdrop for Consumer Staples that includes a late cycle and lower yields. The analyst believes that cigarette fundamentals will hold up "better than feared", regulatory concerns will subside, and companies will see a contribution from Next Generation tobacco products.
TWO DOWNGRADES OF CHARLES SCHWAB: BofA Merrill Lynch analyst Michael Carrier downgraded Charles Schwab (SCHW) to Neutral from Buy with a $43 price target. The analyst sees more downside risk to estimates from a "tougher" margin and revenue outlook. Also, Keefe Bruyette analyst Kyle Voigt downgraded Charles Schwab to Market Perform from Outperform and lowered his price target for the shares to $43.50 from $51.
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