Check out today's top analyst calls from around Wall Street, compiled by The Fly.
TESLA UPGRADED TO BUY AT JEFFERIES: Jefferies analyst Philippe Houchois upgraded Tesla (TSLA) to Buy from Hold and raised his price target for the shares to $450 from $360. While the shares have done well since the Q3 report with Tesla having demonstrated its profit and self-funding potential, the company's growth becomes "value-accretive" just as peers are engaging in a mostly negative electric vehicle "sum game," Houchois said in a research note partially titled "Playing a positive sum game." Tesla is one of a few car makers likely to grow earnings in 2019 and 2020, adds the analyst. He thinks Tesla in the year ahead "will avoid a volume zero-sum-game or negative margin trade-off in EVs." Further, Houchois says he saw "ample scope to improve flow, boost output on fewer shifts, and offset upcoming Model 3 mix dilution" during his recent trip to the company's Fremont facility. In late morning trading, Tesla shares were higher by 2.8% to $373.34.
SECUREWORKS CUT TO SECTOR PERFORM AT RBC: RBC Capital analyst Matthew Hedberg downgraded Secureworks (SCWX) to Sector Perform from Outperform, but raised his price target to $18 from $14. The analyst stated that after a 93% year-to-date run in the stock price, the risk-reward on the shares is now balanced. Hedberg also cited the company's weaker monthly recurring revenue results and guidance, a "lumpy" North America enterprise business, and the possibility of uncertainty related to the data breach at Marriott (MAR) from a Secureworks mistake as reported earlier this week. First Analysis analyst Howard Smith also downgraded Secureworks to Neutral from Outperform following a 90% year-to-date rise in its stock price. In late morning trading, Secureworks shares were lower by over 7.8% to $15.76.
EXPEDITORS CUT TO SELL AT GOLDMAN: Goldman Sachs analyst Matthew Reustle downgraded Expeditors International of Washington (EXPD) to Sell from Neutral with an unchanged price target of $68. The analyst sees "headwinds on the horizon" amid continued deceleration in the company's airfreight business and structural headwinds in its ocean freight business. He forecasts Expeditors' net revenue growth will slow to 4% in 2019 from 13% in 2018. This, combined with an expectation that tax rates will increase relative to 2018, implies the company's growth will decelerate to 2% in 2019, Reustle tells investors in a research note. The analyst believes "deteriorating" fundamentals, elevated exposure to a slowdown in global trade and "rich" valuations will drive shares lower in 2019. In late morning trading, Expeditors International of Washington shares were down by more than 2.9% to $72.11.
APPLE PRICE TARGET CUT TO $236 AT MORGAN STANLEY: Morgan Stanley analyst Katy Huberty lowered her FY19 iPhone units forecast to 200M from 213M after her recent meetings in Asia highlighted a weakening China smartphone market, especially at the high-end. However, her Google trends analysis suggests global demand for the new iPhones is holding up, at least relative to past cycles, after the XR launch in November, which leads her to conclude that iPhone revenue downside is "largely isolated to China." The analyst, who added that weak iPhone shipments on the back of lengthening replacement cycles doesn't translate to installed base and Services weakness, lowered her FY19 revenue forecast to $277B, or 4% year-over-year revenue growth. Huberty cut her price target on Apple (AAPL) shares to $236 from $253, but kept an Overweight rating on the stock.
WILLIAM BLAIR DISAGREES WITH SHORT THESIS ON ROLLINS: Shares of Rollins (ROL) declined 6% yesterday in a flat market, potentially driven by a short thesis arguing for a significant downward revaluation, William Blair analyst Tim Mulrooney noted. The analyst said he understands the short thesis from Hedgeye is based on expected deceleration in revenue growth, stalled margins, branch consolidation, and valuation contraction. He disagrees with each of these points, however, and kept an Outperform rating on Rollins. Mulrooney expects the company's organic revenue to grow in the 4%-6% range over the next several years, in-line with the forecast for the overall U.S. pest control services market.
Tesla
+9.28 (+2.56%)
Secureworks
-1.37 (-7.98%)
Expeditors
-2.32 (-3.12%)
Apple
-3.28 (-1.88%)
Rollins
-0.29 (-0.49%)