Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MORGAN STANLEY DOWNGRADES TESLA TO UNDERWEIGHT: Morgan Stanley analyst Adam Jonas downgraded Tesla (TSLA) to Underweight from Equal Weight with a price target of $360, up from $250. The analyst sees an unfavorable risk/reward at current valuation levels following the stock's recent rally. Further, he believes risks to Tesla's long-term Chinese business may not be fully appreciated by the market. Four factors have driven Tesla's share price up 105% over the last four months, namely stronger than expected global demand for its vehicles, China announcements that show the company's expansion into the world's largest electric vehicle market, supportive incentive developments and positive sentiment around its product expansion, Jonas said. The analyst, while admitting near-term momentum and sentiment around the stock is very strong, questions the "sustainability of the momentum." Jonas increased his expectations for Tesla's core auto business while decreasing his expectations for the mobility business, resulting in the price target raise to $360.
MIZUHO CUTS XILINX TO NEUTRAL, UPGRADES SYNPATICS: Mizuho analyst Vijay Rakesh downgraded Xilinx (XLNX) to Neutral from Buy with a price target of $106, down from $115. The analyst believes the China base station rollout is seeing a more pronounced near-term pause given the telco network sharing between China Unicom and China Telecom impacting ZTE/Huawei. Further, issues at Nokia (NOK) are driving a slowdown for suppliers, Rakesh told investors in a research note. The analyst added, however, that longer term, the China base station rollouts should resume to a healthy pace and Xilinx could still benefit.
Rakesh also upgraded Synaptics (SYNA) to Buy from Neutral with a price target of $77, up from $46. The company's exit from the lower-margin TDDI segment should help margins, as Synaptics was participating in a "tough landscape" against Novatek, which has been taking significant share with pricing at key customers including Huawei, Rakesh said. In addition, new 5G handset launches in the second half of 2020 and OLED should position Synaptics well as it supplies drivers with improving handset growth, contended the analyst. He also believes Synaptics could be well positioned for an upcoming iPhone win with touch.
STEPHENS DOWNGRADES TYSON, PILGRIM'S PRIDE TO EQUAL WEIGHT: Stephens analyst Ben Bienvenu downgraded Tyson Foods (TSN) to Equal Weight from Overweight with a $95 price target and downgraded Pilgrim's Pride (PPC) to Equal Weight from Overweight with a $35 price target. While the analyst remains "positively inclined" on demand for chicken, pork and beef in 2020 in light of African swine fever, improved U.S./China trade and the potential for a McDonald's (MCD) chicken sandwich, he believes domestic production "remains heavy." This requires "exceptional" export demand to balance the U.S. market, and raises the bar to achieve peak pricing for protein in 2020, Bienvenu said. It is possible that exports deliver the demand required to balance the protein market, but with the valuation expansion already seen, the stocks are more appropriately valued with balanced risk/rewards added the analyst.
JPMORGAN CUTS U.S. BANCORP TO UNDERWEIGHT: JPMorgan analyst Vivek Juneja downgraded U.S. Bancorp (USB) to Underweight from Neutral with a price target of $55.50, down from $58. The company posted "weak" Q4 results in several areas, notably payments-related fees and net interest income, Juneja told investors in a research note. The analyst cited a combination of weak performance and the stock's premium valuation relative to peers for the downgrade.
MORGAN STANLEY BOOSTS AMAZON PRICE TARGET TO $2,200: Morgan Stanley analyst Brian Nowak raised his price target for Amazon (AMZN) to $2,200 from $2,100 and maintained an Overweight rating on the shares. The analyst believes the consensus EBIT estimate for Q1 of 2020 is still around 25% too high. His new multi-year build out of 1-day shipping versus non-1-day unit economics shows how Amazon's near-term profitability is likely to disappoint. However, this "build phase too shall pass," said Nowak, who sees Amazon meeting Q2 and Q3 profitability estimates and delivering "materially higher" than expected profitability in 2021 and beyond. The analyst sees at least 20% upside to 2021 profit estimates. While Amazon shares may be range bound "tactically" through another expected investment-driven Q1 guide-down and the 1-day profitability debate in the coming months, the pullback would bring a buying opportunity, Nowak said. The analyst is bullish longer-term about the "material incremental share gains and profits ahead" for the company.
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