AbbVie upgrade and Slack initiation also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
HOME INVESTMENT TO CONTINUE: Gordon Haskett analyst Chuck Grom upgraded Lowe's (LOW) to Buy from Hold with a price target of $151, up from $110. While the stock "is certainly not an undiscovered idea" in the COVID-19 pandemic, Grom sees enough evidence that consumers' willingness to invest in their home will continue for many quarters and that the recent housing market dislocation will likely be short-lived. Though still a "tremendous fan" of Home Depot (HD), the analyst sees the current valuation gap with Lowe's to be out of sync with each company's respective comp trends and market share opportunity.
BALANCED RISK/REWARD AFTER RALLY: Wells Fargo analyst Ike Boruchow downgraded Lululemon Athletica (LULU) to Equal Weight from Overweight with a price target of $275, up from $250. The analyst sees a balanced risk/reward profile following the recent rally in the shares. With the stock up 125% since mid-March and with "plenty of risk in the consumer environment still ahead," Boruchow is moving to the sidelines. The analyst still believes Lululemon is a "high-quality best-in-class brand," but prefers to wait for a better entry point into the shares.
BUY ABBVIE: Argus analyst David Toung upgraded AbbVie (ABBV) to Buy from Hold with a $115 price target. Following its completed merger with Allergan, the company's new portfolio includes a "growing oncology franchise anchored by Imbruvica and Venclexta and two growth drivers in the immunology space - Skyrizi and Rinvoq", the analyst told investors in a research note. Longer term, Toung remains neutral on the stock as AbbVie's Humira, which represents about 30% of combined revenue, will face competition from biosimilars. Nonetheless, he sees the company's current 5.1% dividend yield as "very attractive" during periods of market volatility.
'MAJOR BOOSTER SHOT' FROM COVID: Cowen analyst J. Derrick Wood initiated coverage of Slack Technologies (WORK) with an Outperform rating and $45 price target. The analyst noted that the shift to remote work has given Slack a "major booster shot" to its market opportunity that will accelerate adoption and lift the company's total addressable market. The market does not fully appreciate this as many investors are caught up on the Microsoft (MSFT) competitive threat overhang, Wood contended. The analyst sees a "re-rate" in Slack shares following Thursday's results, which he expects to be strong.
CONSTRUCTIVE VIEW ON LAB INDUSTRY: Deutsche Bank analyst Pito Chickering resumed coverage of Quest Diagnostics (DGX) and LabCorp (LH) with Buy ratings and $140 and $210 price targets, respectively. The analyst initiated coverage on the Lab Industry with a constructive view both near term and over the longer term. Routine testing is rebounding faster than expected and the COVID-19 testing addressable market is greater than appreciated, he contended. The analyst, who sees additional market opportunities arising from the pandemic, including targeted workforce testing and international opportunities, believes both LabCorp and Quest Diagnostics can make share gains from "less efficient and more costly" operators such as hospital and physician-office based labs.
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