Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MORGAN STANLEY CUTS ROKU TO UNDERWEIGHT: Morgan Stanley analyst Benjamin Swinburne downgraded Roku (ROKU) to Underweight from Equal Weight with a price target of $110, up from $100. Roku continues to execute a "sound strategy" to capitalize on the shift to streaming, but there are risks to growth expectations not reflected in current valuation levels, Swinburne noted. Specifically, he thinks the company's revenue and gross profit growth could slow "meaningfully" in 2020, leading to multiple compression. Swinburne is bullish on Roku's growth prospects, but he noted the shares are up over 400% year-to-date due to rising estimates and overall exuberance over all things streaming. As a result, the stock's risk/reward is skewed to the downside, contended the analyst. He pointed out that Roku's valuation levels have surged past digital media players and even past high-growth software-as-a-service companies.
BOFA LOWERS DEERE TO UNDERPERFORM: BofA/Merrill analyst Ross Gilardi downgraded Deere (DE) to Underperform from Neutral with a $150 price target. The analyst views last week's earnings outlook as disappointing and said it is "more realistic than conservative." The agriculture setup into next year is very challenging, and there is no guarantee that fiscal 2020 is the bottom if U.S. farmers respond with higher corn and soybean planting, Gilardi told investors in a research note. The analyst sees share downside to $150 per share.
BAIRD DOWNGRADES BIOGEN TO UNDERPERFORM: Baird analyst Brian Skorney downgraded Biogen (BIIB) to Underperform from Neutral with an unchanged price target of $250. The upcoming Clinical Trials on Alzheimer's Disease annual congress could serve as a negative catalyst for shares Biogen shares, Skorney told investors in a research note. The analyst believes the investor "hype" around Alzheimer's disease will "descend into broader critique of the full data set and Biogen's decision to file on it." This will only exacerbate concerns around the 2020 launch of risdiplam and its impact on Spinraza along with the ongoing Tecfidera patent litigation, argued Skorney.
JPMORGAN BOOSTS APPLE PRICE TARGET TO $296: JPMorgan analyst Samik Chatterjee raised his price target for Apple (AAPL) to $296 from $290 and kept an Overweight rating on the shares. Early visibility into 2020/2021 iPhone product cycles are offering incremental reasons to be positive relative to volume implications, Chatterjee said. The analyst, who also raised his volume forecasts and earnings estimates, believes Apple's four new 5G iPhones in the second half of 2020 will offer broader optionality to customers. His supply chain checks indicate that Apple is likely to launch four new iPhone models in September 2020, including all four with 5G capabilities, but only two with ToF World-facing 3D Sensing. Further, the checks indicate that starting 2021, Apple will smooth iPhone seasonality by shortening launch intervals and introducing two new iPhones in both the first half of 2021 and the second half.
STIFEL CUTS WESTERN DIGITAL TO HOLD: Stifel analyst Patrick Ho downgraded Western Digital (WDC) to Hold from Buy with a $53 price target after resuming coverage of the name. The firm had a Buy rating on the shares before suspending coverage in July. The analyst sees some tailwinds for the company but has "some more fundamental questions" as it relates to Western Digital versus Seagate Technology (STX). The technology roadmaps in both hard disk drive and NAND flash need to be monitored, particularly as the competitive landscape drives their own technology roadmaps as well, Ho told investors in a research note. He also questioned Western Digital's operating model and whether it can rebound to its last cycle peak. Further, the company's high debt load could be restrictive, added the analyst. Ho this morning also resumed coverage of Seagate with a Hold rating.
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