Additionally, Qualcomm and Western Digital were upgraded, while Southwest Airlines was downgraded
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MORGAN STANLEY CUTS IBM TO EQUAL WEIGHT: Morgan Stanley analyst Katy Huberty downgraded IBM (IBM) to Equal Weight from Overweight with a price target of $155, down from $170, noting that the firm's recent Chief Information Officer and Value Added Reseller surveys pointed to further deceleration in 2020 IT spending and channel checks suggest companies continue to digest excess IT capacity purchased in 2018. Given that she sees slowing hardware budget growth and rising memory prices pressuring earnings at enterprise hardware companies, she lowered her estimates for NetApp (NTAP), HP Enterprise (HPE) and Pure Storage (PSTG). In addition to these broader industry issues, she is incrementally concerned about share loss and declines at core IBM, Huberty added.
WELLS FARGO BOOSTS PINTEREST TO OVERWEIGHT: Wells Fargo analyst Brian Fitzgerald upgraded Pinterest (PINS) to Overweight from Equal Weight with a price target of $30, up from $28, noting material underperformance in the shares despite solid fundamentals and audience engagement.
UBS UPGRADES SNAP, DOWNGRADES TWITTER: UBS analyst Eric Sheridan upgraded Snap (SNAP) to Buy from Neutral with a price target of $24, up from $16, saying the company exited 2019 with positive momentum in ad revenue as well as user growth, and downgraded Twitter (TWTR) to Neutral from Buy with a price target of $35, down from $37, saying it is entering 2020 at a "bit of a crossroads."
WELLS FARGO CUTS EBAY TO UNDERWEIGHT: Wells Fargo analyst Brian Fitzgerald downgraded eBay (EBAY) to Underweight from Equal Weight with a price target of $32, down from $45. The analyst, who views eBay's pending sale of StubHub to Viagogo as a positive outcome, sees an unattractive risk/reward for the shares relative to sector peers. Fitzgerald expects headwinds for the company's core Marketplace business to continue amid the rollout of the Internet sales tax in the U.S. and rising competition from online and multichannel retailers and emerging marketplaces. Further, eBay's margin expansion potential may be limited given management's long-term outlook for ~30% non-GAAP margin by 2022, Fitzgerald noted.
CITI BOOSTS QUALCOMM TO BUY: Citi analyst Christopher Danely upgraded Qualcomm (QCOM) to Buy from Neutral with a price target of $108, up from $89. The analyst increased his estimates and upgraded the shares as the "long-awaited 5G ramp begins to take shape." He expects upside to both revenue and margins for Qualcomm going forward given share gains in 5G, higher selling prices, and increased royalty revenue. Danely noted that during the last upgrade cycle, Qualcomm revenue increased over 20% and royalty rates stabilized.
WEDBUSH RAISES WESTERN DIGITAL TO OUTPERFORM: Wedbush analyst Matt Bryson upgraded Western Digital (WDC) to Outperform from Neutral with a price target of $83, up from $55. Bryson sayid he believes NAND pricing is in the midst of a V-shaped recovery and that the impact of a NAND upcycle on forward earnings power supports continued stock appreciation. Given what he sees as Western Digital's future earnings power and the positive ramifications a strong earnings cycle will have for its balance sheet, even with shares up over 20% from mid-December levels, Bryson said he believes there is still meaningful further upside potential for the stock.
DEUTSCHE BANK DOWNGRADES SOUTHWEST: Deutsche Bank analyst Michael Linenberg downgraded Southwest Airlines (LUV) to Hold from Buy with a price target of $58, down from $62. The analyst expects another year of "sub-par growth" for Southwest after the airliner pulled Boeing's (BA) 737 Max aircraft from its schedule through June 6. Linenberg reduced his 2020 earnings per share estimate for the company to $4.50 from $4.75 and added that execution risk is high.
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