Check out today's top analyst calls from around Wall Street, compiled by The Fly.
CREDIT SUISSE CUTS PHILIP MORRIS TO UNDERPERFORM: Credit Suisse analyst Alan Erskine downgraded Philip Morris (PM) to Underperform from Neutral and lowered his price target for the shares to $74 from $92. After conducting a survey of next-generation products users in Japan, the U.S. and the U.K., the analyst believes slower progress in the take-up of heated tobacco products and weaker combustible organic growth will challenge the high-single-digit earnings growth models of Philip Morris and British American Tobacco (BTI). Further, exposure to e-vapor favors Imperial Brands (IMBBY), Erskine said in a research note. He believes Philip Morris' "premium" valuation reflects overly optimistic expectations for heated tobacco products. The analyst prefers shares of Outperform-rated Imperial Brands and British American Tobacco to Philip Morris.
MORGAN STANLEY, GOLDMAN DIVERGE ON TESLA: Morgan Stanley analyst Adam Jonas said Tesla's (TSLA) "extraordinary efforts" to deliver Model 3 vehicles before year end could drive Q4 cash flow substantially up from Q3, potentially twice as high in a bullish scenario. He acknowledged that Tesla management has stated the company does not need to raise capital and has no current intention of doing so, but thinks a potential capital raise could reduce many investors' concerns about financial pressure. Jonas views Q4 as a transition point for Tesla from a "Ramp" stage to a "Raise" stage, and thinks it may mark an emerging peak in sentiment and, potentially, share price, Jonas told investors. He kept an Equal Weight rating on Tesla shares with a $291 price target.
Goldman Sachs analyst David Tamberrino, on the other hand, kept his Sell rating and $225 price target on Tesla, saying the recent strength in its Model 3 production and stock price has been inflated by the "combination of pent-up demand and the looming phase-out of the US Federal Tax Credit." The analyst believes the company's Q4 deliveries will be supported by the 50% reduction in the $7.5K tax credit effective January 1st, 2019, but that pull-through of demand will also result in a "lull" starting with delivery figures in Q1 that "may not be fully made up by initial deliveries across Europe." Tamberrino further stated that most of the "sustainable demand" for Model 3 is at the lower end of the price curve, and that Tesla's margins will likely be eroded "as time progresses."
ANALYSTS POSITIVE ON ORACLE'S Q2 REPORT: Oracle (ORCL) shares traded up 6% Monday night after posting a "solid quarter amid low expectations," Piper Jaffray analyst Alex Zukin noted. The analyst said that while buybacks remain the primary driver of earnings growth, he believes that Oracle continues to take a bullish long-term view on its own stock. As such, he expects management to continue to aggressively buy back shares at these levels. While database is still early, the company is making clear progress in its applications business, he contended. The analyst reiterated an Overweight rating on Oracle with a $52 price target.
Additionally, MUFG analyst Stephen Bersey kept his Overweight rating and $55 price target on Oracle after its Q2 results, saying the company's "steady cloud transition continues." The analyst believes that Oracle's growth rate "solid" relative to its peer group, adding that its made "meaningful progress" in the lengthy process of replacing large deployments of on-premise software with a cloud deployment. Bersey further noted that Oracle should continue to buy back its stock at an aggressive pace.
Jefferies analyst John DiFucci viewed Oracle's fiscal Q2 results as a step in the right direction. The analyst kept a Buy rating on the shares with a $61 price target. The company exceeded "modest" expectations in Q2, while Q3 constant currency revenue and earnings guidance "was about in line," DiFucci said in a post-earnings research note. Oracle management continues to expect earnings to grow double-digits for the year, he added.
DA DAVIDSON NEARLY HALVES PRICE TARGET ON OVERSTOCK: DA Davidson analyst Tom Forte slashed his price target on Overstock.com (OSTK) to $58 from $112 after the company's disclosure to investors that it was unable to finalize its GSR Ventures transaction by its mid-December target, pushing that deadline to February of next year. The analyst noted that investors responded to this management stumble by sending the stock price down over 20% from what he sees as "already depressed levels." Forte still kept a Buy rating on Overstock.com, but stated that his new valuation methodology is based on more of a "crawl, walk, run approach," even though he still values the company's 80% tZero holdings at a $1B valuation that equates to $27 per share and its retail business at 31 per share.
Philip Morris
-2.8 (-3.44%)
British American Tobacco
-0.25 (-0.76%)
Imperial Brands
+ (+0.00%)
Tesla
-1.57 (-0.45%)
Oracle
-0.06 (-0.13%)
OSTK
+