Check out today's top analyst calls from around Wall Street, compiled by The Fly.
APPLE PRICE TARGET BOOSTED BY JPMORGAN: JPMorgan analyst Samik Chatterjee established a December 2020 price target for Apple (AAPL) shares of $265, up from his from his December 2019 target to $243. The analyst kept an Overweight rating on Apple. Chatterjee "modestly" raised his iPhone volume forecasts and expects investor sentiment on Apple shares to "improve materially" given the company's ability to drive upward revisions to volume expectations. The 2019 product cycle is largely considered to be a "muted one" due to limited hardware enhancements and replacement cycle risks amid expectations for a 5G phone next year, Chatterjee said. The analyst, however, raised his iPhone volume forecasts for Apple's September quarter by 1M and for its December quarter by 3M units to account for stronger trends, particularly led by the iPhone 11 model amongst the new iPhones. He believes volume upside in 2019 will have significance in demonstrating that Apple can deliver balance of volume and profitability "even in a tough backdrop."
WELLS FARGO UPGRADED AT ARGUS, DOWNGRADED AT BAIRD: Argus analyst Stephen Biggar upgraded Wells Fargo (WFC) to Buy from Hold with a price target of $60 after the company named Charlie Scharf as its new CEO last week. The analyst is positive on Scharf's "impressive industry background" to improve Wells Fargo's financial performance, noting that he is a former protege of JPMorgan's Jamie Dimon. Biggar expects the new CEO to initially focus on addressing the company's regulatory issues which had stifled growth and working toward removal of the Federal Reserve's $2T asset cap imposed on the bank. The analyst added that this removal should be a "strong catalyst" for Wells Fargo shares.
Baird analyst David George downgraded Wells Fargo to Neutral from Outperform. The analyst likes the new CEO choice but the macro headwinds of slow growth and low rates are real, and improving the earnings run-rate and efficiency will take time. He noted the shares have a nice run over the past month and he would be a buyer in the mid-$40's. George lowered his price target to $50 from $52 on Wells Fargo shares.
BED BATH & BEYOND RAISED TO OUTPERFORM AT WEDBUSH: Wedbush analyst Seth Basham upgraded Bed Bath & Beyond to Outperform from Neutral and raised his price target for the shares to $16 from $14, which represents 62% upside potential. Turning around declining retailers is a very difficult task, particularly amidst unfavorable secular trends and soft industry sales growth, but Bed Bath & Beyond has a "good chance of stabilization" in earnings over the next two years as its changes take hold, Basham said. The company has a reconstituted board with "much-improved" governance, is resetting its cost structure, has a plan to reduce inventory by 35%, is rapidly refreshing stores to improve the shopping experience, has launched two private label brands, and is evaluating opportunities to leverage its store lease expiration cadence and sell non-core assets, explains the analyst. Further, Basham believes buy-side expectations are "very low."
CIGNA UPGRADED, UNITEDHEALTH, HUMANA CUT AT BMO: BMO Capital analyst Matthew Borsch upgraded Cigna (CI) to Outperform from Market Perform with an unchanged price target of $188. The analyst claimed that the current 8-times his expected forward earnings valuation multiple is "attractive" as the stock represents a "better hedge" against political and health policy uncertainty. Borsch added that Cigna's global health care business is well positioned to generate at least 12% in earnings growth to reach its stated target of $20-$21 in EPS by 2021, while also citing its relaunched Medicare Advantage growth and generating higher profitability in group insurance.
Borsch downgraded UnitedHealth (UNH) to Market Perform and lowered his price target to $249 from $292 as part of his broader research note into Managed Care and Facilities. The analyst noted that while the company is "past the point" of significant downside risk from market share gains and has generated strong earnings growth, he prefers lower valuation names. At 12.9-times his expected 2020 earnings, Borsch states that UnitedHealth trades at a premium to its peers and at the second-highest multiple in his coverage universe.
Borsch also downgraded Humana (HUM) to Market Perform and lowered his price target to $290 from $345 as part of his broader research note into Managed Care and Facilities. The analyst noted that while the company is the only managed care pure play in Medicare Advantage, which he also sees as the "most attractive growth area" in the sector, at 13.7-times his expected 2020 earnings, Borsch believes the stock is already trading at a premium to the peers' market-cap weighted average of 11.2-times.
TSMC BOOSTED TO CONVICTION BUY AT GOLDMAN: Goldman Sachs analyst Bruce Lu added TSMC (TSM) to his firm's Conviction List while reiterating a Buy rating on the shares. The analyst has a $55 price target for the stock, which represents 21% upside. Following a re-examination of industry capacity builds and order revisions, the analyst thinks he's underestimating the positive impacts on TSMC arising from trade uncertainty. Further, Lu believes "faster and a larger magnitude" of 5G builds could drive upside to his estimates for TSMC.
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