Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BUY NETFLIX: Baird analyst William Power upgraded Netflix (NFLX) to Outperform from Neutral. The analyst believes the company continues to take market share from linear TV and his survey results suggest strong subscriber trends. He also believes the narrative can shift toward a greater revenue leverage from subscriber upside. Additionally, Power raised his price target to $415 from $350 on Netflix shares. Meanwhile, he downgraded Comcast (CMCSA) to Neutral from Outperform on significant headwinds as the loss of live sports coupled with increasing economic hardships, could accelerate video cord cutting trends creating both headline and operating risks.
MOVING TO THE SIDELINES ON AT&T: Baird analyst William Power downgraded AT&T (T) to Neutral from Outperform. The analyst believes it is facing significant headwinds as the loss of live sports coupled with increasing economic hardships, could accelerate video cord cutting trends creating both headline and operating risks. Power lowered his price target to $33 from $41 on AT&T shares.
Cowen analyst Colby Synesael also downgraded AT&T to Market Perform from Outperform, citing increasing risk driven by the COVID-19 environment. The analyst expects fundamentals within WarnerMedia to be pressured including HBO Max. Although valuation is cheap, he thinks it is unlikely the company will beat the market either on a continued selloff or eventual recovery. Synesael lowered his price target to $37 from $43 on AT&T shares.
BUY BOEING: Goldman Sachs analyst Noah Poponak upgraded Boeing (BA) to Buy from Neutral with a price target of $173, down from $256. Boeing will remain a going concern, and travel by flight will be "as popular as ever" once the COVID-19 outbreak is resolved, Poponak told investors in a Sunday night research note. As such, the analyst thinks Boeing shares, which are down 70% year-to-date and 80% from 2019 highs, should be "procured at the current price."
With its current cash balance and the term loan drawn in the first quarter, plus the remaining revolver and a temporary dividend halt, Boeing has adequate liquidity to cover a "deeply negative" free cash flow year in 2020, which includes no MAX deliveries until the fourth quarter and airlines deferring deliveries as well as asking for a pre-delivery-payment holiday, Poponak said. In addition, the analyst pointed out that federal assistance to both the airlines and to the aerospace manufacturing sector is possible. Poponak also believes a MAX certification flight could occur near-term, calming liquidity fears.
SIX FLAGS RATING CUT ON COVID-19 CLOSURES: B. Riley FBR analyst Eric Wold downgraded Six Flags (SIX) to Neutral from Buy with a price target of $13, down from $28. The analyst expects SeaWorld (SEAS) and Six Flags will follow the lead of Cedar Fair (FUN) and assume a more conservative path of continued closure to the public.
SELL CARNIVAL: Wells Fargo analyst Timothy Conder downgraded Carnival (CCL) to Underweight from Overweight with a price target of $6, down from $55. In a research note to investors, Conder noted that to say COVID-19 has decimated the cruise and travel industry "is an understatement," and feels Carnival will soon need to issue $4B-$5B of equity. While somewhat expected, the analyst argued that it will be meaningfully dilutive to existing shareholders, and believes that a post-COVID-19 industry recovery will be elongated, producing the need for additional net financing in 2021 despite current reductions in CapEx, operating expenses and dividend elimination.
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