Check out today's top analyst calls from around Wall Street, compiled by The Fly.
SUPPLY CHAIN ISSUES: Loop Capital analyst Laura Champine downgraded Home Depot (HD) and Lowe's (LOW) to Hold from Buy with price targets of $325 and $220, respectively, as part of a broader deep-drive research into home centers. Supply chain issues represent a "significant risk" in the sector and "persistent" inflation may push the Fed toward an interest rate hike within her 12-month time horizon, the analyst tells investors in a research note.While the larger names should manage these headwinds better than most given their scale and quality management, the environment is "more fraught with risk," Champine adds.
Champine adds that her estimates for Home Depot had been "too aggressive" given the challenges the company is facing in maintaining in-stock positions in key categories.
PLUG POWER UPGRADE: Barclays analyst Moses Sutton upgraded Plug Power (PLUG) to Equal Weight from Underweight with an unchanged price target of $27. The company's analyst day on October 14 "could reasonably ignite some momentum" and drive the shares toward a new baseline for the next 6-12 months, or at least set a high-$20s "floor," Sutton tells investors in a research note. Further, an infrastructure bill is another potential upside driver, even if the potential of passage is under 50%, adds the analyst.
VALUATION WARRANTS 'CONSTRUCTIVE OUTLOOK': JPMorgan analyst Ken Goldman upgraded Oatly Group (OTLY) to Overweight from Neutral with a $21 price target. The analyst likes the growth of plant-based dairy in general and the potential for oat milk to continue taking share from almond and other varieties. For Oatly, he models "very strong" sales "for the foreseeable future." While Q3 sales estimates "need to drop a bit" and visibility on the company "remains low in general," the stock's current valuation "warrants a constructive outlook," Goldman tells investors in a research note. He values Oatly shares using a discounted cash flow analysis that points to a $21 fair value.
BEAUTY HEALTH A BUY: Stifel analyst Jonathan Block initiated coverage of Beauty Health (SKIN) with a Buy rating and $33 price target. His checks with 50 current HydraFacial practices give him conviction that there is potential upside to his "above-Street" 2022 and 2023 revenue estimates given that he sees potential upside to consumables, capital, and, "to a lesser extent," Keravive, Block tells investors. He believes these three drivers will also be boosted by faster-growing International markets, the analyst said.
'MEANINGFUL CONVICTION': Citi analyst Itay Michaeli says General Motors' (GM) investor day "accomplished a critical first step towards re-shaping perceptions." GM's 2030 outlook implied $17 of earnings per share with improved free cash flow conversion and a 25% revenue mix from software/new business, Michaeli tells investors in a research note. The analyst has "gained meaningful conviction" in his over $100 per share upside thesis following the event. A sum-of-the-parts approach "leads to an even considerably higher outcome," Michaeli writes.
Meanwhile, Credit Suisse analyst Dan Levy reaffirmed an Outperform rating and $75 price target on General Motors following this week's presentations. GM is trying to shatter the perception that they are a no-growth Auto 1.0 company facing powertrain risk, and instead show us the potential for growth, EV leadership, and significant revenue outside core vehicle sales, Levy tells investors in a research note. The analyst adds that GM's targets are "compelling," implying earnings to more than triple by 2030, implying a case for GM stock to be well over $100 on today's value.
Home Depot
+7.06 (+2.14%)
Lowe's
+3.825 (+1.88%)
Oatly Group
+1.225 (+9.08%)
Beauty Health
+0.58 (+2.22%)
Plug Power
+1.49 (+6.06%)
General Motors
+2.515 (+4.66%)