Best Buy and Limelight Networks downgrades also among today's top calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BOFA CUTS INTEL TO UNDERPERFORM: BofA analyst Vivek Arya downgraded Intel (INTC) to Underperform from Neutral with a price target of $45, down from $60, after its "weak" results. The analyst is concerned that the company offered no plan or update on fixing its manufacturing challenges and also saw sales mix pressure as demand shifted to more competitive cloud and consumer markets, away from its "profitable" PC and server markets. Arya further points to increasing competition for Intel from the "nimbler" Nvidia (NVDA) and AMD (AMD).
SHAKE SHACK INITIATED WITH AN OUTPERFORM: Oppenheimer analyst Michael Tamas initiated coverage of Shake Shack (SHAK) with an Outperform rating and $90 price target. The analyst believes the company "holds unique optionality as its strong unit economics drive the industry's best unit growth story." His work indicates "catalysts for a bullish recovery" in same-store-sales and path for margin-driven EBITDA upside versus consensus through 2022.
OPPENHEIMER DOWNGRADES BEST BUY: Oppenheimer analyst Brian Nagel downgraded Best Buy (BBY) to Perform from Outperform with a price target of $125, up from $120. While Nagel remains encouraged with underlying structural enhancements to Best Buy's model, the analyst believes that Street expectations for post-pandemic prospects for Best Buy may have turned too optimistic. He adds that the combination of potential downward revisions to consensus forecasts and a now historically elevated multiple will likely weigh upon prospects for Best Buy shares.
PIPER SAYS TIKTOK BECOMING 'BIGGER ISSUE' FOR FASTLY: Piper Sandler analyst James Fish downgraded Fastly (FSLY) to Underweight from Neutral with a price target of $65, down from $84. Despite the pullback in shares in the last week, the market "is still not factoring enough risk," Fish tells investors in a research note. The analyst's research affirms TikTok will become a "bigger issue" for Fastly over the next year than the market believes, as it is "rapidly building" its own content delivery network. In addition, Fastly faces other issues including a slowdown at Amazon (AMZN) and tough compares in the first half of 2021, adds the analyst. Fish believes the company's fundamentals and risks are not appropriately reflected in the stock at these levels.
LIMELIGHT DOWNGRADED AT NORTHLAND, CRAIG-HALLUM: Northland analyst Michael Latimore downgraded Limelight Networks (LLNW) to Market Perform from Outperform following the company's Q3 report and reiteration of full year guidance that at the mid point implies no year-over-year growth in Q4. Latimore, who is lowering his FY21 revenue growth forecast to 6% from 10%, sees a lower rating as appropriate until he gets more comfort in a sales reacceleration, he tells investors.
Meanwhile, Craig-Hallum analyst Jeff Van Rhee downgraded Limelight Networks to Hold from Buy with a price target of $5, down from $9. While the guidance was reiterated all around and tailwinds from COVID/work-from-home, OTT, and Gaming remain very favorable and will likely continue aiding top-line growth, the analyst is stepping to the sidelines due to unpredictability, inconsistency, and long-term fears of increasing commoditization.
GOLDMAN STARTS VIRGIN GALACTIC AT NEUTRAL: Goldman Sachs analyst Noah Poponak initiated coverage of Virgin Galactic (SPCE) with a Neutral rating and $19 price target. The company's long-term upside potential "could be substantial" if it can capture the space travel and supersonic flight opportunity, Poponak tells investors in a research note. However, the time to realization of the opportunity is "very long" and customer adoption and recurrence is uncertain, adds the analyst. Further, Poponak believes competition potential for Virgin Galactic is "not insignificant."
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