Check out today's top analyst calls from around Wall Street, compiled by The Fly.
HSBC CUTS APPLE TO HOLD: HSBC analyst Erwan Rambourg downgraded his rating on Apple (AAPL) shares to Hold from Buy and cut his price target to $200 from $205. It is "too late to sell" Apple shares following the selloff in November, but it is also "too early to buy," Rambourg said. The analyst believes growth in the company's core iPhone is set to "slow dramatically." The company's revenue growth will decelerate amid longer smartphone replacement cycles and penetration saturation in core markets, says Rambourg. Further, he has a "less than enthusiastic view" of Apple's ability to make significant headway in emerging markets like India. "The lion's share of future revenues (products and services) will be dependent on the current installed base - which is unlikely to grow materially," contended Rambourg.
NORTHLAND CUTS INTEL TO UNDERPERFORM: Northland analyst Gus Richard downgraded Intel (INTC) to Underperform from Market Perform after cutting his estimates for calendar year 2019, given his view that trade tensions caused companies to pull in demand to beat the expected increase in tariffs. With a ninety day reprieve to the tariff increase plans, he thinks the channel will rethink inventory levels and likely slow ordering. Additionally, AMD (AMD) has taken share in desktop, notebook and increasingly in the server market as its product offerings continue to improve, Richard noted. He also continues to be more pessimistic about Intel's gross margins as its competitive position is eroding, the analyst added. Richard lowered his price target on Intel shares to $42 from $46.
GOLDMAN DOUBLE UPGRADES WASTE MANAGEMENT: Goldman Sachs analyst Brian Maguire double upgraded Waste Management (WM) to Buy from Sell and raised his price target for the shares to $107 from $84. The analyst also raised his Waste sector view to Attractive from Neutral. Given the age of the current business cycle and expectations for slowing economic growth, now is the right time to own Waste stocks, Maguire said. The Waste sector not only compounds earnings growth at a higher rate than the overall market, but it does so with much less volatility and drawdowns in its earnings, added the analyst. He believes the Waste sector that should be a core holding in every portfolio, especially "so late in the economic cycle." The analyst likes shares of Waste Management saying it has the lowest price-to-earnings multiple in the sector and is currently trading at an 11% discount to its primary peer Republic Services Group (RSG).
KEYBANC CUTS OWENS-ILLINOIS TO UNDERWEIGHT: KeyBanc analyst Adam Josephson downgraded Owens-Illinois (OI) to Underweight from Sector Weight, with a $16 price target. The analyst noted that the company has struggled to grow volume in recent years and experienced substantial demand declines in the Great Recession. The combination of protracted volume weakness and high fixed costs is a sub-optimal one, and particularly given slowing global growth, he contended. While the stock is trading slightly below its five-year average on an absolute and relative basis, Josephson expects consensus estimates to decline and therefore have no reason to expect multiple expansion anytime soon, such that he expects the stock to relatively underperform peers in the year ahead.
MORGAN STANLEY SAYS AMAZON POSES RISK TO UPS, FEDEX AIR VOLUMES: Morgan Stanley analyst Ravi Shanker said investors have been focusing on Amazon's (AMZN) last-mile efforts and build-out of its internal logistics network, but he thinks the market has been missing the potential risk posed to UPS (UPS) and FedEx (FDX) air volumes from the e-commerce giant's in-house Express Air network. While "Amazon Air's" rollout is in the early stages, Shanker already estimates a 200-300 bps impact on the Domestic Air volume growth of UPS and FedEx and expects more erosion. Amazon Air could put 2% of potential revenue for UPS and FedEx at risk in 2018, and Shanker sees that growing to over 10% by 2025, he tells investors. Following the Amazon Air analysis, the analyst lowered his price target for UPS to $87 from $92 and for FedEX shares to $230 from $240. Shanker kept an Equal Weight rating on FedEx and an Underweight rating on UPS.
Intel
+16 (+4.00%)
Apple
+18 (+4.00%)
AMD
+15 (+3.00%)
WM
+13 (+2.00%)
Republic Services
+19 (+10.00%)
O-I Glass
+20 (+5.00%)
Amazon.com
+11 (+4.00%)
UPS
+14 (+5.00%)
FedEx
+19 (+9.00%)