Tyson Foods downgrade at Bank of America also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BUY L BRANDS: BMO Capital analyst Simeon Siegel upgraded L Brands (LB) to Outperform from Market Perform with an unchanged price target of $17. With the Sycamore Partners deal "extinguished" the noise around the stock will dissipate and it will become harder to ignore L Brands' underlying fundamental value, Siegel contended. The analyst expects further COVID-19 driven challenges and negative sentiment, but with shares dropping 15% on Monday, even if he assumes a structural $2B reduction in Victoria's Secret revenues, he sees 50%-70% share upside.
NEW STRATEGIC PLAN: Argus analyst David Coleman upgraded Harley-Davidson (HOG) to Buy from Hold with a $30 price target as he has a positive view of the company's new strategic plan. Dubbed "The Rewire," the plan should result in a solid recovery for Harley as the economy restarts, Coleman contended. Further, the analyst pointed out that Harley is also working to mitigate the impact of the COVID-19 pandemic through salary cuts, hiring freezes, and adjustments in its new product launch schedule. Coleman views the 40% pullback in the shares over the last quarter as creating a favorable entry point.
MOVING TO THE SIDELINES: Bank of America analyst Peter Galbo downgraded Tyson Foods (TSN) to Neutral from Buy with a price target of $60, down from $70. The analyst noted that COVID-19 is causing "meaningful operational challenges" for the company, which include several facility shutdowns and reduced operating rates across its beef, pork and chicken plants. Galbo further cited the latest data from USDA pointing to 35%-40% reduction in slaughter rates at beef and pork plants relative to pre-COVID levels. The analyst believes that these declines should ease in the coming weeks, but they pose a "meaningful headwind" to Tyson's operations over the medium term, while the company also spends more on the ongoing PPE/safety costs and addressing worker absenteeism.
'MAJOR PARADIGM SHIFT': Northland analyst Carl Byrnes initiated coverage of Amarin (AMRN) with an Outperform rating and $15 price target. The analyst noted that the expanded label given to Vascepa represents a "major paradigm shift" in lipid management, addressing "sizeable" market opportunities in the U.S., Europe and the rest of the world. While the ongoing patent litigation represents a "major risk," potential generic entrants will not be able to procure sufficient quantities of FDA-grade icosapent ethyl to pose a material commercial threat, the analyst predicts. Byrnes anticipates a ruling in the patent appeal in late 2021 or early 2021. The risk/reward profile of Amarin shares is compelling, the analyst added.
SELL SALESFORCE, WORKDAY: Rosenblatt analyst Yun Kim initiated coverage of both Salesforce (CRM) and Workday (WDAY) with Sell ratings. While the analyst acknowledges that Salesforce "enjoys a de facto enterprise standard status," his industry checks indicate large scale business application deployment is becoming a lower priority among large organizations, leading the analyst to expect large deal activity to slow for the company. Kim sees Salesforce’s annual organic revenue growth target and fiscal year 2024 revenue target of $35B as at risk. Voicing similar concerns, the analyst noted that is cautious on Workday's medium-term growth trajectory, which could lag the industry when the IT spending resumes.
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