WW downgrade and Wingstop initiation also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BUY ADOBE: Bank of America analyst Brad Sills coverage of Adobe (ADBE) with a Buy rating and $570 price target. The analyst pointed out that Adobe addresses a total addressable market larger than $139B and has an "impressive" competitive moat built on its large Creative Cloud subscriber bases of greater than 21M subscribers, a large distribution channel and "highly efficient" online self-serve channel, its "dominant brands," and the breadth and depth of its digital content and experience software.
Sills also reinstated coverage of
VMware (VMW) with a Neutral rating and $175 price target;
Splunk (SPLK) with a Buy rating and $180 price target;
Intuit (INTU) with a Buy rating and $460 price target;
DocuSign (DOCU) with a Buy rating and $250 price target;
HubSpot (HUBS) with a Buy rating and $600 price target.
VALUATION REFLECTS FIRST-MOVER ADVANTAGE: Raymond James analyst Nicholas Bacchus initiated coverage of Carvana (CVNA) with a Market Perform rating and no price target. The analyst thinks the company has a strong "first-mover advantage" and that capacity growth could drive upside to estimates. However, the stock's valuation already reflects this, Bacchus tells investors in a research note. The analyst also started Vroom (VRM) with an Outperform rating and $47 price target and assumed coverage of CarGurus (CARG) with an Outperform rating and $34 price target.
MOVING TO THE SIDELINES: Morgan Stanley analyst Lauren Schenk downgraded WW (WW) to Equal Weight from Overweight with an unchanged price target of $34. The stock has outperformed the S&P by 19% over the last 12 months and is now within 5% of her unchanged target, noted Schenk, who now sees a more balanced risk/reward. In addition, first quarter WW app downloads decelerated throughout the quarter and ended 18% below the first quarter of last year and 16% below the first quarter of 2019, noted Schenk, who is concerned that more discretionary dollars could move back to travel, dining out and other activities in the reopening.
BALANCED RISK-REWARD: RBC Capital analyst Christopher Carril initiated coverage of Wingstop (WING) with a Sector Perform rating and $140 price target. The company represents "one of the most compelling growth stories" in his restaurant coverage, offering "best in class" unit economics driven by long-term double-digit restaurant growth, the analyst told investors in a research note. At current valuation, however, the risk-reward on the stock is "balanced," added Carril.
LITTLE CHANGE IN FUNDAMENTALS: Credit Suisse analyst Kenneth Fong upgraded Bilibili (BILI) to Outperform from Neutral with a price target of $140, down from $150. Despite Bilibili's recent share price correction, the analyst sees little change in the fundamentals. Long-term story on user growth, monetization potential and unique product offering stays unchanged, added Fong. He still likes Bilibili on its fastest user growth among entertainment peers despite competition, strong content pipeline across categories that fuel user engagement, potential upside surprise from advertising growth, and HK index inclusion as catalysts.