Constellation Brands and Paycom upgrades also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BUY PINDUODUO: Goldman Sachs analyst Piyush Mubayi (PDD) upgraded Pinduoduo to Buy from Neutral with a price target of $123, up from $73.10. The analyst noted that in the third quarter, the company's community buying innovation Duo Duo Mai Cai further improved purchase frequency and "therefore user engagement on the platform," while the total user time spent reached 531B mins - up 101% from last year. Mubayi added that Pinduoduo's platform captured 41% of the overall user time spent across e-commerce platforms in China, up from 34% in the second quarter and 29% a year ago.
GROWTH POTENTIAL: Morgan Stanley analyst Dara Mohsenian upgraded Monster Beverage (MNST) to Overweight from Equal Weight with a price target of $90, up from $87. The market is not appropriately pricing in Monster's growth potential, said the analyst, who expects above-consensus results going forward. A reacceleration in U.S. sales trends, coupled with "strong" international growth, should drive upside to consensus estimates and multiple expansion, Mohsenian told investors in a research note.
'VERY ATTRACTIVE' VALUATION: Morgan Stanley analyst Dara Mohsenian also upgraded Constellation Brands (STZ) to Overweight from Equal Weight with an unchanged price target of $203. The analyst sees a "very attractive" valuation following the stock's underperformance and ahead of beer sales acceleration in the second half of 2021 as COVID consumer demand and production supply issues dissipate. Improving beer revenue growth should drive above-consensus Constellation revenue and earnings estimates, and act as a catalyst for the stock, Mohsenian told investors in a research note.
BOOKINGS IMPROVEMENT: JPMorgan analyst Mark Murphy upgraded Paycom Software (PAYC) to Neutral from Underweight with a price target of $310, up from $200. The dual headwinds facing the company have begun to transition into dual tailwinds as unemployment is gradually improving and feedback shows bookings "returning to health fairly rapidly," Murphy told investors in a research note. A "major disruptive resurgence of COVID-19 is not the ideal scenario," but the analyst still thinks "peak unemployment is behind us."
ON THE SIDELINES: Stephens analyst James Rutherford resumed coverage of Restaurant Brands (QSR) with an Equal Weight rating and $55 price target. The analyst called Tim Hortons a "point of concern" given its market share losses pre-COVID and the heightened uncertainty during/after the pandemic, and argued that Burger King lacks a U.S. catalyst, has lagged its primary competitor's comps for years, and is using deep core menu discounting to support sales. Rutherford would need to get comfort that Tim Hortons is not going to be a "long, slow bleed" and see a sizable Burger King sales catalyst in order to get more positive on Restaurant Brands.
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