Nvidia and Micron downgrades also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
DOUBLE UPGRADE: Credit Suisse analyst Lauren Silberman double upgraded Dunkin' Brands (DNKN) to Outperform from Underperform with a price target of $67, down from $73. Dunkin' has underperformed since the market selloff, down 23.5% year-to-date, and is now trading near valuation lows on fiscal 2021 "fresh" consensus estimates, Silberman told investors in a research note. Further, the analyst argued that the company's "pure-play" 100% franchised business model is one of the most attractive in restaurants, warranting a premium to restaurant peers. She also sees limited risk of mass closures given the health of its franchisee system and attractive category dynamics.
BUY FEDEX: Bank of America analyst Ken Hoexter upgraded FedEx (FDX) to Buy from Neutral with a price target of $140, up from $117. He believes the recent decision by Amazon (AMZN) to pause its Shipping with Amazon highlights the difficulty of entering the third-party delivery business. Hoexter also contended that the integration of FedEx's Express and Ground networks for some e-commerce deliveries should reduce network costs.
MOVING TO THE SIDELINES: Craig-Hallum analyst Richard Shannon downgraded Nvidia (NVDA) to Hold from Buy with a price target of $300, down from $325. The analyst cited a more balanced risk/reward and lowered his Gaming estimates in 2021 to account for impacts from COVID-19 as well as a potential delay in next-generation GPU, somewhat offset by likely better Switch sales. Shannon is not changing his Datacenter estimates, as he sees a balance of strong demand and uncertain supply chain dynamics.
BALANCED RISK/REWARD: Goldman Sachs analyst Toshiya Hari downgraded Micron (MU) to Neutral from Buy with a price target of $49, down from $60, after taking over coverage from Mark Delaney. While positive on the long-term outlook for the broader memory industry, the analyst believes the stock's risk/reward is largely balanced at current levels. Hari reduced out-quarter DRAM bit growth and NAND pricing assumptions to reflect potential demand weakness in the second half of 2020.
'BROADBAND BULL CASE': Morgan Stanley analyst Benjamin Swinburne upgraded Charter (CHTR) to Overweight from Equal Weight with a price target of $560, down from $575. The analyst believes Charter can likely meet or exceed consensus estimates, even after factoring in a recession and the effects of COVID-19, given the "broadband bull case" for the accelerating utility of the cable broadband value proposition during this work- and stream-from-home environment. Charter's superior competitive position in broadband, along with its scaling mobile business, should allow it to grow operating free cash flow at a 10-15% compound annual growth rate in 2020-2022 even in a global recession, Swinburne estimates.
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