Additionally, Cowen downgraded both Tapestry and Movado
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
CITI DOUBLE UPGRADES JABIL TO BUY: Citi analyst Jim Suva double upgraded Jabil (JBL) to Buy from Sell and raised his price target for the shares to $36 from $27. The analyst also added the stock to his firm's U.S. Focus List. The company's customer concentration risk has played out, Suva said, while pointing out the stock is below his prior price target. Apple (AAPL) is 28% of Jabil's sales, and is now seeing strength in its wearables segment, said Suva. He believes Jabil will benefit from this, noting that within the company's 28% of sales to Apple, less than 10% is for Apple iPhone casing. Customer concentration concerns are fully reflected in Jabil's stock price and the negative Apple estimate revisions are behind the company with Apple soon hitting low digit positive growth in 2020, contended Suva.
ARGUS BOOSTS HP ENTERPRISE TO BUY: Argus analyst Jim Kelleher upgraded HP Enterprise (HPE) to Buy from Hold with a price target of $18 after its Q3 earnings beat and raised FY19 guidance delivered earlier this week. The analyst noted that the company is facing "top-line challenges" but its positive earnings comparisons imply an "improving" sales mix. Following a multi-year period of underperformance, Kelleher also contended that HP Enterprise is offering "unrecognized value" thanks to its stronger operating model going forward.
COWEN CUTS TAPESTRY, MOVADO TO MARKET PERFORM: Cowen analyst Oliver Chen downgraded Tapestry (TPR) to Market Perform from Outperform. The analyst cited the lack of upside at Kate Spade, product changes necessary at Kate, and the time and risk on related improved customer reception. He also said he is cautious on Kate Spade and Coaches' exposure to promotional North American outlet malls. Chen maintained his $22 price target on Tapestry shares.
Chen also downgraded Movado (MOV) to Market Perform from Outperform. The analyst moved to the sidelines given lower visibility into future growth, and a deceleration of revenue growth combined with expense de-leverage. He said key headwinds include, category pressures, U.S. and International Wholesale challenges, consumer confidence risk, and tariffs. Chen lowered his price target to $22 from $40 on Movado shares.
BOX DOWNGRADED AT TWO FIRMS: Craig-Hallum analyst Chad Bennett downgraded Box (BOX) to Hold from Buy and lowered his price target for the shares to $15 from $22. The company remains in a "no-man's land" for investors, and the time has come for "material changes" in leadership, Bennett noted following the company's Q2 results. The analyst said he's never come across a company that is a leader in a $40B total addressable market and "continues to mis-execute so badly." Box is "potentially an activist investor's dream," but five of the nine board members being founders or venture capitalists presents a a "bit of a roadblock," said Bennett. He sees the stock as a "value trap" until material changes are taken.
First Analysis analyst Terry Kiwala downgraded Box to Neutral from Outperform and lowered his price target for the shares to $14 from $22. The analyst hoped the company's Q2 results and guidance would provide evidence that its revenue growth could accelerate beyond the 10%-12% growth that guidance implies for the second half of 2019. However, he now has reduced confidence in this prospect. While the number of Box's over-$100,000 deals signed in Q2 was up 36% year-over-year, the number of over-$500,000 deals signed was down substantially year-over-year and over-$1M deals signed were flat, Kiwala said. The analyst cited continued sales uncertainty for his downgrade to Neutral.
RAYMOND JAMES CUTS BANK OF AMERICA TO MARKET PERFORM: Raymond James analyst Michael Rose downgraded Bank of America (BAC) to Market Perform from Outperform without a price target. The analyst now sees a more balanced risk/reward profile after updating his interest rate outlook. Bank of America's "greater than peer" asset sensitivity poses a greater challenge to its net interest income amid further flattening of the yield curve and the potential for several additional interest rate cuts from here, Rose wrote in a research note. As a result, he sees "waning prospects" for the company to generate positive operating leverage in 2020.
B. RILEY REMAINS BULLISH ON U.S. CABLE: B. Riley FBR analyst Zack Silver remains bullish on U.S. cable stocks over the balance of 2019 and reiterated Buy ratings on Cable One (CABO), GCI Liberty (GLIBA), and WideOpenWest (WOW). He raised his price target for Cable One to $1,400 from $1,250 on higher long-term broadband average revenue per user growth assumptions. Further, the analyst sees no reason to assume the company's current multiple compresses over the next 12 months. He also bumped up his price target for GCI to $73 from $72. And for investors without liquidity constraints, Silver sees a "compelling opportunity" in WideOpenWest. A "growing cable operator trading at a deep discount," WideOpenWest could start re-rating by Q4 of this year, the analyst said.
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