McDonald's coverage initiation and Boeing downgrade also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'SECULAR WINNER': Baird analyst Colin Sebastian initiated coverage of Airbnb (ABNB) with an Outperform rating and $175 price target. The analyst believes Airbnb is one of the leading companies in an "elite class" of technology "disrupters" to emerge from the great recession. Although near-term booking trends remain challenging due to local travel restrictions, Airbnb is a "secular winner," taking share in the "large and lucrative" travel/accommodations market, Sebastian told investors in a research note.
Voicing a similar opinion, DA Davidson analyst Tom White also started coverage of Airbnb with a Buy rating and $172 price target. The pandemic continues to disrupt travel demand but has also highlighted the "uniquely adaptable" and "resilient" nature of the company's business, the analyst contended. White added that among Airbnb's most critical competitive advantages are its globally recognized brand and its ability to facilitate "authentic" connections and experiences for guests and hosts. The analyst believes the company's strengths will support its "durable" growth for years to come with a long-term EBITDA margins exceeding 30%. Additionally, Canaccord, JMP Securities, Jefferies, Needham, and Piper Sandler initiated the name with Buy-equivalent ratings.
Meanwhile, Bank of America analyst Justin Post started coverage of Airbnb with a Neutral rating and $158 price target. While constructive on the long-term opportunity, he doesn't expect significant multiple expansion from here with the stock up 116% from its IPO price. Credit Suisse, Deutsche Bank, Raymond James, Goldman Sachs, KeyBanc, Loop Capital, Mizuho, Morgan Stanley, Oppenheimer, Stifel, Wedbush, and Wells Fargo initiated Airbnb with Neutral-equivalent ratings.
FOOD DELIVERY BUSINESS GROWTH: Deutsche Bank analyst Lloyd Walmsley initiated coverage of DoorDash (DASH) with a Buy rating and $185 price target. The analyst sees a "prospective path" for shares to eventually compound to over $300 in a "bull case." DoorDash company continues to grow its core food delivery business and drive efficiency gains while also scaling its last-mile delivery Drive business, Walmsley told investors in a research note. JMP Securities and Needham also started coverage of the name with Buy-equivalent ratings.
Meanwhile, Goldman Sachs analyst Heath Terry initiated coverage of DoorDash with a Neutral rating and $135 price target. The long-term growth and profit opportunity for DoorDash "remains significant as the company continues to execute at the level that it has in building its lead in the restaurant space," Terry told investors in a research note. However, the analyst believes much of the outlook is priced into shares and will look for better entry points. Piper Sandler, Bank of America, JPMorgan, Mizuho, Oppenheimer, RBC Capital, UBS, and William Blair also initiated DoorDash with Neutral-equivalent ratings.
INITIATIVES REFLECTED IN STOCK VALUATION: Citi analyst Sergio Matsumoto initiated coverage of McDonald's (MCD) with a Neutral rating and $230 price target. The stock's current valuation already reflects McDonald's delivering on the "Accelerating the Arches" initiatives, Matsumoto told investors in a research note. The analyst also has concerns for a slow recovery in international markets.
SELL BOEING: Bernstein analyst Douglas Harned downgraded Boeing (BA) to Underperform from Market Perform with a price target of $199, down from $221. The fourth quarter of 2020 was supposed to be a big quarter for 787 deliveries, as inspections for manufacturing defects were to be completed and stored aircraft delivered, Harned told investors in a research note. However, "this did not happen" as Boeing saw one delivery in December and none in November, the analyst said. Harned believes non-conformities related to the fuselage are more extensive than originally thought. The 787 has come under more pressure, which the market does fully appreciate, he added.
MOVING TO THE SIDELINES: RBC Capital analyst Nik Modi downgraded PepsiCo (PEP) to Sector Perform from Outperform with an unchanged $153 price target. The analyst expects the company to maintain its top-line momentum via improving consumer insights and "stepped up reinvestment." However, at 24-times expected 2021 earnings, which is a "half turn away from its 5-year peak." Modi is "hard pressed" to see material share price upside in PepsiCo.
The analyst also downgraded Coca-Cola (KO) to Sector Perform from Outperform with an unchanged $55 price target. The analyst noted that the company has emerged as a leader across the CPG space in recent years, but its valuation is near-full and upward earnings revisions are unlikely over the next few quarters as the negative implications of COVID last longer than consensus assumes.
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