Additionally, Micron received its second upgrade in as many days
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MORGAN STANLEY UPGRADES 'DEFENSIVE' J&J TO OVERWEIGHT: Morgan Stanley analyst David Lewis upgraded Johnson & Johnson (JNJ) to Overweight from Equal Weight with a price target of $170, up from $145. Pharma growth is likely to accelerate in 2020, which historically has lifted the stock's multiple, while its Consumer segment is stabilizing and the Medical Devices & Diagnostics unit has seen "six consecutive quarters of momentum improvement," Lewis tells investors. The stock also appears to be pricing in "significantly more legal liability" than he sees as probable, Lewis added. The analyst sees J&J's "defensiveness returning," which he thinks can lead to outperformance in 2020.
MICRON SEES SECOND UPGRADE IN AS MANY DAYS: Wedbush analyst Matt Bryson upgraded Micron (MU) to Outperform from Neutral with a price target of $65, up from $44. In a research note to investors, Bryson says the upgrade is not a call on the quarter, as he doesn't expect meaningful upside to Q1 and expects the company's Q2 outlook to also be muted or in-line with the Street, but that he sees an improving memory dynamic. Specifically, Bryson says NAND pricing, SSDs in particular, should inflect upwards in Q1, adding that he believes periods of positive pricing change are the best periods to own memory stocks. He also says he expects demand for both NAND and DRAM to accelerate throughout 2020.
As previously reported, Susquehanna analyst Medhi Hosseini upgraded Micron to Positive from Neutral yesterday with a price target of $85, up from $45.
GOLDMAN SAYS SELL GROUPON: Goldman Sachs analyst Michael Ng downgraded Groupon (GRPN) to Sell from Neutral with a $2.40 price target. The analyst cites execution risks in North America following 7 consecutive quarters of customer declines going back to Q1 of 2018, with traffic headwinds in the market weighing on the company's revenue, billings, and gross profit declines anticipated for 2020-21. Ng remains positive on Groupon's international opportunity longer term, but also points to the recent negative inflection in the overseas markets.
BMO UPGRADES FREEPORT TO OUTPERFORM: BMO Capital analyst David Gagliano upgraded Freeport McMoRan (FCX) to Outperform from Market Perform with a price target of $17, up from $12. Freeport shares are positioned to be the "go to" name within the U.S. Metals & Mining sector for those seeking exposure to a broader macro-economic demand recovery in 2020, Gagliano tells investors in a research note. The company's risks for 2020 have diminished as the transition from surface to underground at Grasberg continues to progress ahead of schedule, adds the analyst. Further, he believes lowered copper price forecasts and the associated Freeport estimate reductions have shifted the forward-looking estimate revision potential from downward revision risk to upward revision.
PARKER-HANNIFIN GETS TWO UPGRADES: Stifel analyst Nathan Jones upgraded Parker-Hannifin (PH) to Buy from Hold with a price target of $229, up from $199. After the company cut its fiscal 2020 outlook heavily on the Q3 earnings call, the current outlook is "de-risked," Jones tells investors in a research note. Current macro trends indicate that we are about in the middle of what looks to be a "very shallow" industrial recession, says the analyst, who expects the industrial economy to return to growth in Q2 of 2020. Further, with recent positive developments on trade, Jones thinks investors can focus on the industry recovery, some inventory restocking, and Parker-Hannifin's synergies and growth from recent acquisitions.
Meanwhile, BofA Securities analyst Andrew Obin upgraded Eaton (ETN), Parker-Hannifin and Colfax (CFX), all to Buy from Neutral, and double upgraded Rexnord (RXN) to Buy from Underperform as he shuffled his ratings in the Multi-Industry sector. The impacts of tariffs, trade tensions, and decelerating global industrial production should fade in 2020, while the United States-Mexico-Canada Agreement will clear the way for possible reshoring of supply chains to North America, contends Obin. His changes in sector ratings reflects a bias towards stocks with cyclical EPS recovery potential and "strong execution," the analyst added.
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