AMD coverage initiation and United downgrade also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'COMPELLING BULL CASE': Deutsche Bank analyst Lloyd Walmsley upgraded Twitter (TWTR) to Buy from Hold with a price target of $56, up from $36. The analyst believes the shares should continue to re-rate higher with improving growth in the second half of 2020 ns a "compelling bull case" for 2021. Walmsley also thinks Twitter is well positioned to benefit from an event and a cyclical recovery. The company has turned around its user product and has been driving a "nice pickup" in monthly daily active user growth over the last few years, a trend that can continue on a multi-year basis, he contended. Further, he argued that Twitter is well positioned to benefit from a "big event landscape" in 2021, expansion into more performance advertising on the back of its advertising server rebuild, and an eventual high-margin subscription product.
INTERNATIONAL EXPOSURE: Barclays analyst Brandon Oglenski downgraded United Airlines (UAL) to Equal Weight from Overweight with an unchanged price target of $40. The analyst sees a "slow path to recovery" for the Airlines sector with U.S. revenue down roughly 70% heading into the fourth quarter. With business travel not likely to recover before mid-2021 and international health barriers persisting, domestic U.S. leisure demand should remain the largest source of revenue opportunity for airlines, Oglenski told investors in a research note. With a preference for domestic and leisure exposure, the analyst downgraded United, the most international carrier within his U.S. airline coverage.
Oglenski also double upgraded Allegiant Travel (ALGT) to Overweight from Underweight with a price target of $150, up from $100, given its leisure focused network and low-cost operations.
ON THE SIDELINES: Truist analyst William Stein initiated coverage of AMD (AMD) with a Hold rating and $90 price target. The analyst acknowledged that the company has "risen like a phoenix from the ashes" with decisions that led to the technical superiority and share gains of its CPUs relative to Intel (INTC). Stein also believes that AMD's market share gains should progress over the next few years and that the stock is currently pricing in expectations that are "achievable rather than beatable." Nonetheless, he still points to Nvidia (NVDA) as his favorite name in large-cap growth semiconductors.
EARNINGS GROWTH ACCELERATION: Citi analyst Wendy Nicholson upgraded PepsiCo (PEP) to Buy from Neutral with a price target of $169, up from $148. PepsiCo's earnings growth can accelerate in 2021, and its relative multiple can "expand considerably from current levels," Nicholson told investors in a research note. The analyst noted that PepsiCo has had the most consistent organic sales growth when compared to fellow mega caps Coca-Cola (KO) and Procter & Gamble (PG). While Pepsi has by far the lowest operating margin of the group, it has the largest amount of potential to expand its operating margins in coming years, the analyst contended.
IBRANCE FAILURE IN EARLY BREAST CANCER: Atlantic Equities analyst Steve Chesney downgraded Pfizer (PFE) to Neutral from Overweight with a price target of $39, down from $44. The analyst noted that the company is no longer positioned for "above industry growth" following the failure of Ibrance in early breast cancer indications. Chesney added that with Pfizer shares having rallied about 15% from late-June lows, the upside from its current valuation is more limited.
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