Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MERCADOLIBRE BOOSTED TO OVERWEIGHT AT JPMORGAN: JPMorgan analyst Andre Baggio upgraded MercadoLibre (MELI) to Overweight from Neutral and raised his price target for the shares to $750 from $563. The stock yesterday declined 10%, mostly on investor concerns on the political environment in Argentina, which could lead to policy discontinuity, Baggio noted. The analyst, however, believes MercadoLibre "has proven that demand remains healthy even during macro volatility." Further, in its core country, Brazil, the company's growth remains "impressive," Baggio said. He believes MercadoLibre presents a "unique combination of leadership on e-commerce coupled with accelerating growth on FinTech." Yesterday's selloff brings an entry point, concluded Baggio.
OCCIDENTAL CUT TO UNDERWEIGHT AT JPMORGAN: JPMorgan analyst Phil Gresh reinstated coverage of Occidental Petroleum (OXY) following a period of restriction and downgraded the shares to Underweight from Neutral with a price target of $50, down from $74. Despite the 33% stock price decline since before the Anadarko deal was announced, Occidental's total return potential of 15% is roughly half that of the peer group, Gresh told investors in a research note. The company's estimated 2021 free cash flow to enterprise value yield of 5.2% at $60 per barrel Brent is still not compelling enough to compensate investors for its elevated dividend as a percentage of free cash flow, said the analyst.
PIPER INITIATES CANNABIS STOCKS: Piper Jaffray analyst Michael Lavery last night initiated coverage of Cronos Group (CRON) with an Overweight rating and $18 price target. The analyst expects "strong" sales growth from Cronos, driven by "sustainable category momentum." The company's partnership with Altria (MO) provides important capital and access into 230,000 US retail outlets, as well as regulatory and vapor product expertise, Lavery tells investors in a research note. He expects Cronos to have "modest" near-term revenues from Canadian cannabis production, but believes it has "significant" potential growth opportunities with CBD products in the U.S.
Lavery also initiated Charlotte's Web Holdings (CWBHF) with an Overweight rating and $25 price target, Green Thumb Industries (GTBIF) with an Overweight rating and $13 price target, CV Sciences (CVSI) with an Overweight rating and $5 price target, and Cresco Labs (CRLBF) with an Overweight rating and $11 price target.
CLOVIS CUT TO NEUTRAL AT BOFA: BofA/Merrill Tazeen Ahmad downgraded Clovis (CLVS) to Neutral and lowered his price target to $7 from $13 after last week's release of positive topline results for its PARP inhibitor Lynparza to treat prostate cancer by the company's competitor AstraZeneca (AZN). The analyst notes that the Lynparza update alters his expectations in the prostate cancer market to assume a two-player landscape from day one, reducing his expectations for Clovis's Rubraca peak sales to $250M from $406M with peak U.S. BRCA penetration of 15%.
APTINYX DOWNGRADED TO UNDERWEIGHT AT JPMORGAN: JPMorgan analyst Jessica Fye downgraded Aptinyx (APTX) to Underweight from Neutral without a price target. While management is efficiently managing existing cash, cash runway questions "could emerge," Fye said. Despite the "intriguing" fibromyalgia data, following the large failed phase II study and a lack of meaningful clinical updates over the next 12 months, the shares are likely to underperform, adds the analyst. She believes it would take a positive proof of concept study for NYX-2925, demonstrating clear efficacy on clinical measures, to reverse the negative sentiment on the Aptinyx shares.
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