Starbucks downgrade at KeyBanc also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
SUCCESSFUL 5G IPHONE LAUNCH: HSBC analyst Nicolas Cote-Colisson upgraded Apple (AAPL) to Hold from Reduce with a price target of $295, up from $225. The analyst expects a successful launch of a 5G iPhone in the third quarter of 2020. Apple is likely to launch four iPhone models in the second half of 2020, with two higher-end models ramping in early third quarter and then the remaining two late in the quarter, Cote-Colisson told investors in a research note. Further, the analyst argued that Apple can sell more services to its customers, which can help offset lower equipment sales in 2020 through 2023 amid higher unemployment and pressure on incomes.
GRUBHUB, JUST EAT MERGER: Credit Suisse analyst Stephen Ju downgraded GrubHub (GRUB) to Neutral from Outperform with a price target of $75, up from $64, after the company agreed to be acquired by Just Eat Takeaway.com (TKAYY) for $75.15 per share. While a merger with Just Eat does not provide the same strategic benefits offered by consolidating with an existing domestic competitor, it does potentially reduce the likelihood of antitrust-related obstacles, Ju contended.
William Blair analyst Ralph Schackart also downgraded GrubHub to Market Perform from Outperform, while BTIG analyst Jake Fuller assumed coverage of the stock with a Neutral rating.
LIMITED NEAR-TERM UPSIDE: KeyBanc analyst Eric Gonzalez downgraded Starbucks (SBUX) to Sector Weight from Overweight. The analyst believes Starbucks scale, best-in-class digital platform, innovation competencies, and forward-thinking business mentality should position the company well over the long-term. However, current sales trends remain challenged, and Gonzalez thinks near-term upside is limited due to its elevated valuation and the prospect of a more gradual same-store sales/earnings per share recovery than previously expected and relative to peers.
BUY UBER, LYFT: BTIG analyst Jake Fuller initiated coverage of Uber (UBER) and Lyft (LYFT) with Buy ratings and $47 and $52 price targets, respectively, as he believes the ridesharing industry should emerge from the lockdown on stronger footing. Further, the analyst argued that Uber should exit stronger than it entered the pandemic with a clear path to profitability and solid competitive positioning. While some legal-regulatory challenges remain, they tend to be "more market-by-market than broad-based," Fuller stated. Regarding Lyft, the analyst believes the company is "making hard choices," while accelerating the rationalization process.
'$18B REVENUE OPPORTUNITY AT SCALE': Oppenheimer analyst Jed Kelly initiated coverage of DraftKings (DKNG) with an Outperform rating and $48 price target. The analyst sees the competencies in product development and customer acquisition that the company utilized to become the daily fantasy sports market leader with over 60% share allowing DraftKings to be "a critical player" in accelerating the shift to legal sports betting as more states legalize sports gambling. With legalized sports betting and iGaming markets in their "very early stages," he sees an "$18B revenue opportunity at scale."
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