Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BERNSTEIN BOOSTS J&J TO OUTPERFORM: Bernstein analyst Lee Hambright upgraded Johnson & Johnson (JNJ) to Outperform from Market Perform with a price target of $155, up from $148. The stock is "historically cheap," currently trading at a 17% discount to its sum-of-the-parts and a 13% discount to the S&P 500 Index, Hambright told investors in a research note. The analyst, who believes J&J will resolve its legal liability for $10B-$12B, says the shares reflect a worst case scenario with $50B of liabilities being priced in. Following discussions with legal experts, Hambright has a "hard time seeing the worst-case scenarios playing out." The analyst estimates Johnson & Johnson faces about $5B of liability for opioids, another $5B for talc, and $800M for Risperdal.
GOLDMAN SACHS CUTS CROWDSTRIKE TO SELL: Goldman Sachs analyst Heather Bellini downgraded Crowdstrike Holdings (CCRWD) to Sell from Neutral with a price target of $66, down from $83. While CrowdStrike is very well positioned in the market for endpoint security, and can continue to post upside to estimates, a "blue sky analysis" suggests this is likely priced in at current share levels, Bellini told investors in a research note. The analyst also upgraded Workday (WDAY) to Buy from Neutral. Her "Blue Sky analyses" show that the companies with the highest potential upside to 2020 estimates are Zoom Video (ZM), Slack Technologies (WORK), and Elastic (ESTC).
RBC CAPITAL RAISES ROKU, TRADE DESK TO OUTPERFORM: RBC Capital analyst Mark Mahaney, who had downgraded Roku (ROKU) on July 1, has now upgraded the stock to Outperform from Sector Perform and raised his price target on the shares to $155 from $107, stating that he sees the valuation as "more compelling" following a 31% pullback recently in the stock. He also views the company's fundamentals as among the strongest in the small cap Internet sector and views the stock as one of the best derivative plays on the trends of OTT and streaming, Mahaney told investors.
Mahaney also upgraded Trade Desk (TTD) to Outperform from Sector Perform with an unchanged price target of $250. Following the 32% decline from the July highs, Trade Desk's valuation is more compelling, Mahaney told investors in a research note. Further, the company's positioning as one of the best derivatives off the "strong" secular streaming shift is "very favorable," contended the analyst. He believes Trade Desk's revenue growth and EBITDA margin fundamentals are among the strongest in small-to-mid cap space.
ANALYSTS DIVERGE ON SQUARE: Susquehanna analyst James Friedman upgraded Square (SQ) to Positive from Neutral. The analyst insisted he is not make a call on the quarter but noted the stock's underperformance was due to valuation, decelerating margin expansion and decelerating GPV growth. He said he sees the company's return on margin reinvestment on the horizon and so raises his GPV and revenue estimates above consensus. Friedman has a $77 price target on Square shares.
However, Nomura Instinet analyst Bill Carcache initiated coverage of Square with a Reduce rating and $49 price target. Under prior analyst Dan Dolev, Nomura had a Buy rating on Square shares. Carcache, who says he loves the innovation that Square has brought to the payments space, believes the shares are "overvalued." While some investors view Square as a software play, several catalysts could bring its valuation more in line with payments industry peers, Carcache tells investors in a research note. Square's valuation "discounts significant unrealized margin expansion, which we don't view as justified," said the analyst.
JEFFERIES LOWERS CANOPY TO UNDERPERFORM: Jefferies analyst Owen Bennett downgraded Canopy Growth (CGC) to Underperform from Hold with a price target of $18.80. Despite the recent selloff in shares, Canopy is the most expensive name across the cannabis space, Bennett told investors in a research note. The analyst, who believes the company still has "material potential" long-term, says signs of share pressures in Canada, weak margin and profit performance in the near term, a lack of material catalysts, and "question marks over how successful beverages will be" warrant a downgrade to Underperform.
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