JPMorgan and Bank of America double downgrades also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
UPSIDE ON IPHONE BUILD, SHIPMENT FORECASTS: Loop Capital analyst Ananda Baruah upgraded Apple (AAPL) to Buy from Hold with a price target of $131, up from $110. The analyst noted that the stock has historically outperformed in scenarios of "consistent upside" relative to consensus estimates or as negative trends around iPhone shipments "stop worsening." Baruah added that at present time, he sees upside to consensus in near-term iPhone build and shipment forecasts, with iPhone 13 build forecasts also looking "positive." The analyst expects Apple's upside to Mac, iPad, AirPod, Watch, and Services sales to be sustained "well into 2021."
LIMITED UPSIDE: Barclays analyst Raimo Lenschow downgraded Slack Technologies (WORK) to Equal Weight from Overweight with an unchanged price target of $36. Following the press discussion about a potential Salesforce (CRM) bid for Slack and the subsequent share price appreciation, the analyst sees limited upside for the shares. Lenschow is "also mindful of the risk for meaningful downside in case a bid does not materialize."
SELL JPMORGAN, BANK OF AMERICA: Morgan Stanley analyst Betsy Graseck downgraded JPMorgan (JPM) and Bank of America (BAC) to Underweight from Overweight with price targets of $142 and $34, respectively. While she believes vaccine distribution plans provide "a high degree of certainty" that the recession will end in 2021, JPMorgan's fortress balance sheet and careful credit extension, and Bank of America's tighter underwriting standards limit both their downside going into a recession and their relative upside coming out of one.
The analyst also
downgraded Goldman Sachs (GS) to Underweight from Equal Weight with a price target of $273, up from $208;
downgraded Discover (DFS) to Equal Weight from Overweight with a price target of $107, up from $68;
downgraded SEI Investments (SEIC) to Equal Weight from Overweight with a price target of $72, up from $63;
upgraded U.S. Bancorp (USB) to Equal Weight from Underweight with a price target of $57, up from $43;
upgraded BNY Mellon (BK) to Equal Weight from Underweight with a price target of $51, up from $40;
upgraded Wells Fargo (WFC) to Overweight from Equal Weight with a price target of $40, up from $23;
double upgraded State Street (STT) to Overweight from Underweight with a price target of $99, up from $69;
upgraded Regions Financial (RF) to Overweight from Equal Weight with a price target of $22, up from $14;
upgraded Capital One (COF) to Overweight from Equal Weight with a price target of $131, up from $77;
upgraded Synchrony (SYF) to Overweight from Equal Weight with a price target of $51, up from $27.
MOVING TO THE SIDELINES: Oppenheimer analyst Andrew Uerkwitz downgraded Unity Software (U) to Perform from Outperform. Since its IPO priced at $52, its share price has nearly tripled to $148, the analyst noted, adding that Unity's outperformance over the market and SaaS peers is "significant." Uerkwitz "loves Unity and firmly believes the creative market will see exceptional expansion over the long term." Moreover, he sees several paths to near-term beat/raises. However, in every scenario the vast majority of upside to his price target would come from the terminal value and more robust assumptions. He "can't stretch any further on valuation."
UNITED UPGRADED, DELTA DOWNGRADED: Raymond James analyst Savanthi Syth upgraded United Airlines (UAL) to Outperform from Market Perform with a $60 price target. United appears to be taking a different approach from its legacy peers, creating flexibility to be ready for a faster than anticipated recovery that could lead to market share gain, Syth told investors in a research note.
Syth also downgraded Delta Air Lines (DAL) to Market Perform from Outperform. While Syth views Delta as a high-quality play due to its historical balanced capital deployment, continued structural advantages and opportunity to grow higher margin businesses, the analyst believes its relative advantage is mostly reflected in shares and sees more compelling valuation risk-reward in other stocks.
Additionally, the analyst downgraded American Airlines (AAL) to Underperform from Market Perform. While Syth noted that American has made strides in 2020 in creatively addressing holes in the network and in its cost-cutting efforts, the analyst's earnings forecast means further equity dilution or limited equity value while debt is paid down over multiple years.
Meanwhile, Syth downgraded Southwest (LUV) to Outperform from Strong Buy with a price target of $54, up from $49. Having entered the crisis with the best-in-class balance sheet, Syth expects Southwest to exit in similar manner. While its recent network actions, as well as GDS channel expansion, are indications that Southwest should be able to use its balance sheet strength to gain share in a recovery, Syth believes this relative advantage is partly reflected in shares.