Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BOFA CUTS BEST BUY TO UNDERPERFORM: BofA Merrill Lynch analyst Curtis Nagle downgraded Best Buy (BBY) to Underperform from Neutral, citing his caution about key product categories that include TVs, Apple (AAPL) products, and gaming. Slowing industry growth, tough comparisons in key products and cost inflation will make upside less likely, contended Nagle, who has become more negative and now sees a higher possibility that Best Buy may see an "outright comp miss" in the fourth quarter. The analyst, who also believes consensus Street estimates for 2019/20 earnings are too high, lowered his price target on Best Buy shares to $50 from $70.
STIFEL UPGRADES LULULEMON TO BUY: Stifel analyst Jim Duffy upgraded Lululemon (LULU) to Buy from Hold with an unchanged price target of $151. While Lululemon's comps will "inevitably slow against difficult compares," its double-digit revenue growth can continue, Duffy wrote in a research note titled "Opportunity in Uncertainty, Santa Claus Rally Hasn't Come but We Found a Gift, Upgrade to Buy." The analyst sees potential upside to Q4 and 2019 consensus estimates, and views the company's 2020 objectives of $4B in revenue and implied earnings power of $5.00 per share as "low hurdles." As such, he expects Lululemon's "premium multiple will hold." Despite fundamental strength, the stock's multiple has compressed, resulting in a 26.7% selloff in shares since the September 28 highs, Duffy pointed out.
CRAIG-HALLUM UPGRADES BARNES & NOBLE TO BUY: Craig-Hallum analyst Alex Fuhrman upgraded Barnes & Noble (BKS) to Buy from Hold and raised his price target to $10 from $7. In a research note to investors, the analyst said that initial Q4 checks have indicated improved results, continued cost controls and better holiday sales results, which, combined with the ongoing sales process, should provide "intriguing" upside potential.
JEFFERIES UPGRADES AXOVANT TO BUY: Jefferies analyst Michael Yee upgraded Axovant Sciences (AXON) to Buy and raised his price target for the shares to $3.00. Data readouts over the next year could drive a "meaningful percentage" return for small cap investors and take Axovant shares to $3 from $1 in 2019, Yee said in a research note. The analyst views the current valuation as "cheap" and recommends buying the stock with the company's three gene therapy programs having catalysts in 2019. He believes Axovant's risk/reward is skewed to the upside. In late morning trading, shares of Axovant were higher by 11.4% to $1.12.
BAUSCH TALC WORRIES APPEAR OVERBLOWN, SAYS MORGAN STANLEY: Morgan Stanley analyst David Risinger attributes Friday's 3% decline in Bausch Health (BHC) shares to concerns that the company is exposed to liabilities related to the talc powder lawsuits being faced by Johnson & Johnson (JNJ), since Bausch acquired right to Shower to Shower talc powder in 2012. However, he believes the negative reaction is likely overblown since Bausch appears to be indemnified by J&J, has been successful in obtaining dismissals of related cases, and has only owned the product rights for the past six year. Risinger maintained an Overweight rating and $32 price target on Bausch Health shares. In late morning trading, shares of Bausch were lower by 2.4% to $22.32.
Best Buy
-1.19 (-2.15%)
Apple
+2.14 (+1.29%)
Lululemon
+0.47 (+0.39%)
Barnes & Noble
+0.12 (+1.85%)
Axon
+0.115 (+11.39%)
Bausch Health
-0.57 (-2.49%)
Johnson & Johnson
-2.25 (-1.69%)