Harley-Davidson and Exact Sciences downgrades also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BUY AMD: Barclays analyst Blayne Curtis upgraded AMD (AMD) to Overweight from Equal Weight with a price target of $100, up from $85. The analyst noted that the company reported "strong" quarterly results, driven by strength in both Client and Gaming, "materially better than the weak report" from Intel (INTC), Curtis told investors in a research note. Commenting on AMD's acquisition of Xilinx (XLNX), the analyst said he believes the major strategic benefit is the end market diversity, which will make AMD "less susceptible to PC swings." Curtis views the company as a "clear long-term winner" and sees "no end in sight" for Intel's struggles.
Meanwhile, Craig-Hallum analyst Christian Schwab also upgraded AMD to Buy from Hold with a price target of $100, up from $66, following third quarter results and fourth quarter guidance well ahead of expectations. The company is seeing strength across its client products, particularly its Ryzen processors and will be launching its next generation Radeon graphics products in the coming days, he noted. Schwab believes the acquisition of Xilinx is a complementary addition for AMD, and improves the latter's ability to more completely support datacenter customers and adds exposure to attractive secular trends and end markets. Xilinx business also drives strong and sticky cashflows with design wins that lead to typically longer product cycles, he contended.
REVENUE, MARGIN UPSIDE AHEAD: Deutsche Bank analyst Paul Trussell upgraded Lululemon Athletica (LULU) to Buy from Hold with a price target of $396, up from $298. Athleisure/casual wear remains the most relevant trend in apparel and Lululemon is leading the way in terms of share gains, Trussell told investors in a research note. The analyst believes product innovation and category expansion will drive revenue and margin upside over the near- and medium-term. Further, the acceleration in digital shift mix is additive the company's profits, Trussell added.
MOVING TO THE SIDELINES: Morgan Stanley analyst Adam Jonas downgraded Harley-Davidson (HOG) to Equal Weight from Overweight with a price target of $38, up from $32. While he believes investors have "justifiably embraced" the new message from management around their new strategy, Jonas sees elevated expectations in anticipation of the strategy day that will be coming in the fourth quarter or the first quarter of 2021 and prefers to wait to process the five-year plan that will be unveiled. In addition to presenting quantitative financial measures that meet investor expectations, Harley will then need to prove it is able to execute on its new strategies and mitigate secular headwinds facing motorcycles, Jonas added.
RISK/REWARD MORE BALANCED: Citi analyst Patrick Donnelly downgraded Exact Sciences (EXAS) to Neutral from Buy with a price target of $140, up from $120. The analyst noted that shares traded up 23% on Tuesday as the market digested the acquisition of Thrive Earlier Detection. While Donnelly is "constructive," he sees the stock's risk/reward as more balanced following the recent rally. The analyst finds the valuation of Exact Sciences as fair at current levels.
STEADY, CONSISTENT IMPROVEMENT: Jefferies analyst Janine Stichter initiated coverage of Burlington Stores (BURL) with a Buy rating and $255 price target. Burlington is "the smallest and least profitable of the major off-price retailers," but is also showing steady, consistent improvement in bridging the gap with more mature off-price peers, Stichter told investors. She sees the company being positioned to drive high-single to low-double digit sales growth and double-digit percentage earnings per share growth.
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