Charles Schwab and TD Ameritrade downgrades also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
UPGRADE ON VALUATION: JPMorgan analyst Celine Pannuti upgraded AB InBev (BUD) to Neutral from Underweight with an unchanged price target of $39. The analyst recommended staying defensive in the European Beverages space but upgraded AB InBev due to valuation. Nonetheless, following the worst quarter in recent history for the sector as COVID-19 spread globally, second quarter is likely to be "much worse," Pannuti contended.
BUY JPMORGAN: Odeon Capital analyst Dick Bove upgraded JPMorgan (JPM) to Buy from Hold with a $105.75 price target. The recent "aggressive" moves by the Fed have created "a number of money-making opportunities for bankers" and make JPMorgan an attractive investment at this time despite the odds of reversals in its loan portfolios, Bove contended.
MOVING TO THE SIDELINES: Compass Point analyst Christopher Allen downgraded Charles Schwab (SCHW) to Neutral from Buy with a price target of $35, down from $45. While he remains a fan of the long-term story given the company's track record of accumulating assets and its scale advantages, the analyst sees "material headwinds" for revenue and earnings growth in the near- to intermediate-term due to the current environment. Given the way in which low rates will limit revenue and earnings growth, Allen thinks Schwab "will be challenged" to generate over $2 in earnings per share on a stand-alone basis over 2020-2022 and suspects the stock could be stuck in a trading range as it was after the financial crisis.
Meanwhile, Allen also downgraded TD Ameritrade (AMTD) to Neutral from Buy with a price target of $38, down from $49. The analyst still likes the long-term Charles Schwab, TD Ameritrade deal prospects, but prefers to move to the sidelines for now given the near- to intermediate-term interest rate headwinds.
IN-LINE REVENUES: Bank of America analyst Joyce Ju downgraded Pinduoduo (PDD) to Neutral from Buy with a $64 price target ahead of the company’s quarterly results. The analyst noted that Pinduoduo's user and engagement growth are re-accelerating with DAU, MAU and time spend up 76%, 43% and 70% respectively last month, while order volume and gross merchandise volume are also rebounding from March. However, with consumer demand having largely recovered from the impact of COVID-19, Pinduoduo's revenues should be in line with expectations, he contended
BUY CSX, UNION PACIFIC: UBS analyst Thomas Wadewitz upgraded CSX (CSX) to Buy from Neutral with a price target of $80, up from $63. The analyst is positive on the company's strong leverage heading into a "cycle turn and volume growth" expected in 2021, with its cost reduction efforts also likely limiting its downside risk. Wadewitz further noted that CSX offers resilient free cash flows of $2.1B, as expected in 2020, despite the challenging environment.
Additionally, Wadewitz upgraded Union Pacific (UNP) to Buy from Neutral with a price target of $181, up from $156. The analyst argued that the company's current cost reduction efforts and attractive leverage position the stock for upside when demand improves, combining for an attractive risk-reward profile. Wadewitz added that Union Pacific's resilient free cash flow also makes the shares "relatively safe."
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