Check out today's top analyst calls from around Wall Street, compiled by The Fly.
UPSIDE GETTING 'A LITTLE UNDERWHELMING': Loop Capital analyst Rick Paterson downgraded UPS (UPS) to Hold from Buy with an unchanged price target of $226 following the company's third quarter earnings beat and increased operating margin guidance. While the analyst is positive on all air freight stocks, after Tuesday's 7% share price rally, the potential upside on UPS is "getting a little underwhelming in the near-term," he contended.
ON THE SIDELINES: Argus analyst Christopher Graja initiated coverage of Etsy (ETSY) with a Hold rating. The analyst is positive on the company's potential to deliver 25% annual earnings growth over the next five years after it saw a 62% increase in active sellers and a 77% increase in active buyers in 2020. Etsy is also less vulnerable to supply-chain disruptions than companies with mass-produced merchandise made in far-flung factories, but the stock trades near his fair value estimate, Graja noted. The analyst, however, would consider an upgrade to Buy in the event of a pullback to $190.
REDUCED VISIBILITY: BTIG analyst Clark Lampen initiated coverage of DraftKings (DKNG) with a Neutral rating and no price target. The analyst believes DraftKings will remain one of the larger players in the U.S. online sports betting market long-term, but he does not think consensus estimates are appropriately discounting the impact of new state launches in 2022. Further, "reduced visibility around the Entain deal makes it difficult to look past that," Lampen told investors in a research note.
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COST PRESSURE, LABOR SHORTAGE: Argus analyst John Staszak downgraded Restaurant Brands (QSR) to Hold from Buy after its third quarter earnings miss. The company is expected to face continued cost pressures and labor shortages over the next 12 months, the analyst told investors in a research note, adding that he currently projects increases of 5%-6% in food and labor costs. Staszak also pointed out that because of the labor shortage, Restaurant Brands has had to reduce hours and limit service at many of its restaurants, also cutting his full years 2021 and 2022 EPS views by 6c and 3c to $2.80 and $3.15, respectively.
'IMPORTANT' HERTZ ORDER: Goldman Sachs analyst Mark Delaney raised the firm's price target on Tesla (TSLA) to $1,125 from $905, while keeping a Buy rating on the shares as he believes the Hertz (HTZZ) Model 3 order news is "important" for the company. While the 100,000 order is material on its own, the deal will also help Tesla to sustain "strong" growth and margins when considering the order in the context of other dynamics, the analyst contended. Delaney believes Tesla already has a large backlog, and thinks the order will help supply/demand to "remain healthy even as Tesla ramps its new factories." Further, the Hertz deal could also incentivize other rental fleets to shift more quickly toward electric vehicles, Delaney added.