PNC Financial downgrade and Universal Display coverage initiation also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
SLOWING OF STREAMING GROWTH: Barclays analyst Kannan Venkateshwar downgraded Disney (DIS) to Equal Weight from Overweight with a price target of $175, down from $210. The growth of Disney+ has slowed significantly despite the launch of new franchise titles and Star+, Venkateshwar told investors in a research note. As such, the analyst believes Disney faces a "tough" task to get to its long-term streaming subscription guidance. When assuming peak pre-streaming price-to-earnings multiples for Disney on present 2024 consensus earnings estimates, the stock has meaningful downside risk from current levels, Venkateshwar contended.
SELL VIRGIN GALACTIC: UBS analyst Myles Walton downgraded Virgin Galactic (SPCE) to Sell from Neutral with a price target of $15, down from $26. The analyst cited yet another delay for the company's next powered flights, which had already been delayed from late September to late October following a supplier part issue, stating that the next launch has now been pushed back to the third quarter of next year and commercial service starting in the fourth quarter of 2022. While the details on the Delta class design and results of September-quarter ticket sales will serve as the focal points on the company's upcoming earnings call, neither seem "material upside catalysts," Walton told investors in a research note.
MOVING TO THE SIDELINES: Bank of America analyst Ebrahim Poonawala downgraded PNC Financial (PNC) to Neutral from Buy. While the analyst believes the company remains "well positioned to compete in a digital first world" over the long term, he downgraded the stock to Neutral based on its premium valuation that "more than adequately reflects the potential for a superior return profile and strong execution."
30% POTENTIAL UPSIDE: Bank of America analyst Dah-Yeon Rhee initiated coverage of Universal Display (OLED) with a Buy rating and $230 price target, implying 30% potential upside. The analyst noted that Universal Display is a "leader" in R&D and commercialization of OLED materials, holding over 5,000 patents worldwide in the space. The company has a "near-monopoly" in phosphorescent dopants, or PHOLEDS, for red and green and other materials in the emitting layer of OLED panels, added Rhee, who thinks the company's "industry-best" margin profile "looks sustainable."
DOUBLE DOWNGRADE: Bank of America analyst Nat Schindler downgraded Upstart (UPST) to Underperform from Buy with a $300 price target. Since becoming a public company, Upstart has continuously delivered significant beats and raises each quarter, raising full year guidance every quarter with management projecting revenues at $750M at Q2 2021, but the stock has appreciated 787% year-to-date, with a 187% gain since third quarter earnings on August 10, Schindler told investors in a research note. The firm's long-term thesis is intact, but any near-term upside is already priced in, the analyst added.
MODERATING IT SPENDING ENVIRONMENT: Goldman Sachs analyst Rod Hall downgraded NetApp (NTAP) to Sell from Neutral with a price target of $81, down from $85, as he now factors in a moderating IT spending environment in 2022. NetApp's cloud execution has been strong, but revenue contribution from this business is still only 9% of the company's total revenue in fiscal 2023, Hall contended. As a result, NetApp's public cloud is unlikely to offset pressure on product revenue, the analyst added.
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street