Check out today's top analyst calls from around Wall Street, compiled by The Fly.
EVERCORE DOWNGRADES IBM TO IN LINE: Evercore ISI analyst Amit Daryanani downgraded IBM (IBM) to In Line from Outperform with a price target of $145, down from $160. In a research note to investors, Daryanani said he sees macro headwinds combined with a difficult 1H20 setup that warrants incremental caution especially given the current net leverage. While IBM remains an appealing asset in a Hybrid First era and thinks the more than 4% dividend yield will provide support, the analyst said "skewed" expectations for the December quarter and calendar year 2020 create downside risk to street estimates and keep the stock range-bound.
EVERCORE CUTS SPOTIFY TO UNDERPERFORM: Evercore ISI analyst Benjamin Black downgraded Spotify Technology (SPOT) to Underperform from In Line with an unchanged price target of $115. The analyst, who views Spotify as a "tool for tactical trading," said the risk/reward with the shares back near $160 has "tilted back in favor of rewarding shorts." Black added that Facebook (FB), Lyft (LYFT) and Match Group (MTCH) are his best ideas in Internet.
NEEDHAM BOOSTS NVIDIA TO HOLD: Needham analyst Rajvindra Gill upgraded Nvidia (NVDA) to Hold from Underperform after his "positive" meeting with the company's management at CES. The analyst noted that his prior downgrade was based on the expectations of a "significant" global macro slowdown that would impede the purchases of graphics cards and reduced hyperscaler spending, but instead 2019 saw an "aggressive channel refill". Gill further cited positive signs of momentum in gaming as attach rates for tracing games have accelerated, while hyperscaler spending has resumed to sustain AI workloads, though he also sees Nvidia's 34-times his expected FY21 valuation as "full."
OPPENHEIMER RAISES TESLA PRICE TARGET TO $612: Oppenheimer analyst Colin Rusch raised his price target for Tesla (TSLA) to $612 from $385 and kept an Outperform rating on the name. While Tesla "has stumbled through growing pains," the company has reached "critical scale" sufficient to support sustainable positive free cash flow, Rusch wrote in a research note titled "What to Do Now with TSLA Shares?" Further, the analyst believes the company's "risk tolerance, ability to implement learnings from past errors, and larger ambition than peers are beginning to pose an existential threat to transportation companies that are unable or unwilling to innovate at a faster pace." Tesla has key advantages in powertrain design, battery technology, advanced driver-assistance systems fleet size, roadmap to energy independence offerings, and consumer enthusiasm that can translate into material operating leverage, share gains, and market disruption as renewables and autonomy trends accelerate, contended Rusch.
JMP DOWNGRADES MORGAN STANLEY, UPGRADES GOLDMAN: JMP Securities analyst Devin Ryan downgraded Morgan Stanley (MS), KKR (KKR), and Apollo Global (APO) to Market Perform from Outperform while upgrading Goldman Sachs (GS) to Outperform from Market Perform with a price target of $290 as part of a broader research note on investment banks and brokers. The analyst states that the investment tone heading into 2020 is "quite a bit better" than entering 2019, but also sees the bar as having been set higher and macro obstacles, including the presidential elections, as more prevalent. Ryan notes that his reset expectations reflect more company-specific changes or for dislocated valuation, since the current market "base scenario" in the sector is a positive one.
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street