Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'BRIGHT FUTURE': Wells Fargo analyst Micahel Turrin initiated coverage of Microsoft (MSFT) with an Overweight rating and $400 price target. Even after becoming one of the largest companies on the planet, Microsoft still has a "bright future ahead," Turrin told investors in a research note. The company has continued growth opportunities in "huge categories" of IT spend, the ability to further monetize its strong positioning in multiple end markets, and a financial profile that continues to exhibit durable growth and margin expansion, the analyst added. He likes the growth of Azure, Microsoft's "productivity ubiquity" and its "impressive" margin profile.
ON THE SIDELINES: Goldman Sachs analyst Eric Sheridan reinstated overage of eBay (EBAY) with a Neutral rating and $84 price target. Post third quarter earnings, the analyst still views eBay as a business "facing a few key debates in the years ahead," namely if its normalized growth will settle in a post-pandemic world and if it can strike a balanced approach to margins against the need to invest against broader platform evolution goals.
'ADMITTEDLY CHALLENGING' SETUP: Wells Fargo analyst Michael Turrin initiated coverage of Zoom Video (ZM) with an Equal Weight rating and $275 price target. Despite Zoom achieving broad-based ubiquity and record operating results over the last 18 months, the analyst sees an "admittedly challenging" setup ahead for the shares. As the company laps some exceptional prior results, Turrin thinks the investor discussion will continue to focus in on Zoom's future growth prospects and what levers are still ahead. While the break-up of Five9 (FIVN) brings the focus back to organic Zoom, the analyst believes it also points to a likely air-pocket in the near-term growth profile. These challenges, coupled with a tough set of comps over the next several quarters, are likely to keep shares more range-bound, Turrin contended.
BUY ADOBE, SALESFORCE: Atlantic Equities analyst Peter Sazel upgraded Adobe (ADBE) to Overweight from Neutral with a price target of $820, up from $600, as he assumed coverage of the stock. Adobe has a "dominant position" in the Creative Cloud business, with high barriers to entry and pricing power, and he expects it to retain its market share and deliver mid-teens revenue growth and margin expansion, Sazel told investors. He also has a "differentiated view" on the Digital Experience segment with an above consensus forecast due to his positive take on new leadership there.
Sazel also assumed coverage of Salesforce (CRM) with an Overweight rating and $360 price target, telling investors in a research note that he views the stock as "a low-risk, liquid play on the growth of the software sector." The analyst also sees three unique characteristics benefiting Salesforce that "would be very hard to replicate," namely its beneficial network effect from an ecosystem of app developers and third-party software vendors, Salesforce's investment arm's investments in teams that build on top of the platform, and the company's unique approach to corporate culture, "stakeholder capitalism" and philanthropy.
SELL ACTIVISION BLIZZARD: MKM Partners analyst Eric Handler downgraded Activision Blizzard (ATVI) to Sell from Neutral with a price target of $54, down from $75. The issues Activision is facing as a result of the California Department of Fair Employment and Housing lawsuit and other regulatory investigations into alleged sexual assaults and mistreatment of female employees are deeper than originally feared and are not going to go away until a clear resolution is reached, starting with the removal of CEO Bobby Kotick, Handler told investors in a research note. The analyst also noted that employee morale is extremely low, which is likely to impact not only game development timelines but also quality, and business partnerships are at risk.