Walmart coverage assumed with a Buy at Citi also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'MORE REASONABLE' VALUATION: Bernstein analyst Mark Shmulik upgraded Twitter (TWTR) to Market Perform from Underperform with a price target of $29, up from $27. After underperforming in the COVID-19 selloff, the valuation of Twitter is now "more reasonable," Shmulik told investors in a research note. Further, the company "sits at the fulcrum of news and conversation during this unprecedented global event," and its monetizable events are just postponed, not lost, adds the analyst. Further, Shmulik is "seeing signs of life from the impaired" MAP product, which he views as a necessity in a recession.
'SEVERE' DOWNTURN FOR PARKS: Wells Fargo analyst Steven Cahall downgraded Disney (DIS) to Equal Weight from Overweight with a price target of $107, down from $155. The analyst still believes Disney+ can offset a declining environment for Media Networks, but is concerned by this "unique and severe downturn for Parks." Cahall forecasts zero park attendance for the second half of fiscal year 2020 and roughly 50% capacity in fiscal year 2021. The analyst also cut his Disney target enterprise value by 26%, or $87B, which includes a $65B cut at Parks.
BUY WALMART: Citi analyst Paul Lejuez assumed coverage of Walmart (WMT) with a Buy rating and a price target of $140, up from $137. In the current COVID-19 crisis, Walmart is in a favorable position as it is a largely consumables-based business and is value-priced, Lejuez told investors in a research note titled "Their Time to Shine." Because the company is there to serve customers through this period, it will result in more customer loyalty with existing customers and help Walmart gain new customers, the analyst contended.
SELL WAYFAIR: JPMorgan analyst Christopher Horvers downgraded Wayfair (W) to Underweight from Neutral with a price target of $63, down from $66. The analyst recommended selling the shares following the recent rally. Wayfair's surge of revenue is unsustainable as competition normalizes and nesting slows on the "other side" of the COVID-19 pandemic peak, Horvers told investors in a research note. Further, the analyst is concerned about the "pending avalanche of promotions" when non-essential stores re-open, and he has open questions on Wayfair's need to reacquire customers, especially in a slower economy. He does not expect Wayfair to reach sufficient profitability in 2021 "for it to escape the trap of being valued on price-to-sales."
AMC IN 'DANGER OF RUNNING OUT OF CASH': Loop Capital analyst Alan Gould downgraded AMC Entertainment (AMC) to Sell from Hold with a price target of $1, down from $4. The analyst noted that the company was already over-levered going into the COVID-19 storm and he had previously expressed concerns about its liquidity. Now AMC Entertainment is in danger of running out of cash, having already sent a letter to landlords stating that it will cease paying rent, he added. With theaters likely closed for the entirety of the second quarter, the analyst contended that a bankruptcy is a "distinct possibility for the company," and that at a minimum, it will require a "highly-dilutive financing."
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