Check out today's top analyst calls from around Wall Street, compiled by The Fly.
NEW UBS ANALYST UPGRADES GE TO BUY: UBS analyst Markus Mittermaier assumed coverage of General Electric (GE) from prior analyst Damian Karas and upgraded the shares to Buy from Neutral with a price target of $14, up from $11.50. The shares are at a "positive inflection point" into 2020 given GE's successful de-levering, "strong" estimated earnings growth in 2020 and 2021, and a tripling of free cash flow to $2.3B next year led by Aviation and Healthcare, Mittermaier told investors in a research note. As a result, the analyst expects the stock's narrative to change from "significant cash drag to successful transformation." He sees 26% upside in GE shares.
UBS CUTS 3M TO SELL: UBS analyst Markus Mittermaier downgraded 3M (MMM) to Sell from Neutral with a price target of $160, down from $180. The analyst cited his caution heading into 2020 related to volume, pricing, and the potential polyfluoroalkyl substance contamination liability.
ANALYSTS DIVERGE ON HOME DEPOT: Credit Suisse analyst Seth Sigman upgraded Home Depot (HD) to Outperform from Neutral with a price target of $235, up from $225. In a research note to investors, Sigman said he believes Home Depot offers an attractive risk/reward after its recent pullback and Wednesday's guidance reset, with optionality on improving external and internal drivers in FY20. Beyond that, Sigman said he firmly believes in this team, and the initiatives aimed to expand its reach to new customer segments and categories, while leveraging its stores, building a differentiated omnichannel and digital experience and creating the fastest delivery network that will widen its moat over time.
Gordon Haskett analyst Chuck Grom, however, downgraded Home Depot to Accumulate from Buy with a $230 price target. The analyst left Home Depot's analyst meeting Wednesday with "mixed emotions." With his estimates coming down and the case for an above-historical average multiple "difficult to justify," Grom now sees only roughly 10% upside in the stock. He finds it appropriate to curb his enthusiasm in the near-term.
JPMORGAN UPS STARBUCKS TO OVERWEIGHT: JPMorgan analyst John Ivankoe upgraded Starbucks (SBUX) to Overweight from Neutral with a price target of $94, up from $90, after hosting a meeting with CEO Kevin Johnson and CFO at the company's headquarters. Overall, the analyst sensed a high degree of confidence that Starbucks' "growth at scale" agenda is working in the near and medium term, meeting if not exceeding set sales and margin objectives. While not formally updating his model, Ivankoe believes the company's U.S. comps are up 5% and that China results are at least within the 1%-3% expectations. Much of this sales momentum should continue, and Street numbers should trend up through 2020, the analyst told investors in a research note.
JPMORGAN BOOSTS BAUSCH: JPMorgan analyst Chris Schott upgraded Bausch Health Companies (BHC) to Overweight from Neutral with a price target of $38, up from $32. The shares closed Wednesday up 9c to $29.33. The fundamentals for Bausch "looking increasingly solid" while the shares are trading at only a modest premium relative to the broader Specialty Pharma group, Schott tells investors in a research note. Over the past several quarters, Bausch's business has successfully transitioned away from legacy issues and towards more "normalized" operations, contends the analyst. Further, he believes the company is well positioned for both sales and EBITDA growth in 2020 with loss of exclusivities slowing relative to the past several years. Schott also sees a longer-term path for Bausch to unlock value by separating out its "highly-attractive" eye care business.
CREDIT SUISSE SAYS CHINA IPHONE SHIPMENTS DOWN MEANINGFULLY IN NOVEMBER: Credit Suisse analyst Matthew Cabral said China iPhone shipments declined "meaningfully" in November, falling 35.4% in the month and lagging the 0.2% year-over-year increase in the broader Chinese smartphone market. In addition to weaker overall units, Cabral said the popularity of the lower-priced iPhone 11 and its 15% year-over-year RMB price cut at launch likely adds further pressure to Apple's (AAPL) Greater China sales. Factoring in the decline in ASPs, Cabral estimated China iPhone revenue fell by greater than 17.5% year-over-year over the past three months. The analyst kept a Neutral rating and $221 price target on Apple shares.
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