Check out today's top analyst calls from around Wall Street, compiled by The Fly.
RBC CUTS TESLA TO UNDERPERFORM: RBC Capital analyst Joseph Spak downgraded Tesla (TSLA) to Underperform from Sector Perform and lowered his price target to $245 from $290. The analyst noted that the company's more "tactful messaging" conveys downward pressure to growth expectations and also sees the "realities" of Tesla becoming a volume player highlighting its "challenges to scale and deliver high volume at high ASPs/margins." Spak further stated that the "review of potential supply capacity and demand raises concern", as he estimates max supply capacity for Model 3 production range at 260-312k units. On demand side, the analyst is concerned that the "$2k price cut and talk about having to lower cost further as federal tax incentives subside confirms the view that the bulk of demand is at a lower price point that Tesla can't access yet profitably." In late morning trading, shares of Tesla are down 1.7% to $293.89.
MORGAN STANLEY UPGRADES WALMART TO OVERWEIGHT: Morgan Stanley analyst Simeon Gutman upgraded Walmart (WMT) to Overweight from Equal Weight, citing his belief that Walmart U.S. can now generate sales growth without sacrificing margins, unlike most retailers. Given its "unprecedented commitment to cost control," along with moderating e-commerce dilution, Gutman said he expects Walmart U.S. EBIT to inflect in 2019. He thinks Walmart is gaining share in key categories and notes that the firm's recent survey work shows that Walmart ranks highly across apparel, grocery, home furnishings and e-commerce, all of which boost Gutman's confidence that 2.5% comps are achievable in 2019, he told investors. He raised his price target on Walmart shares to $110 from $107.
MORGAN STANLEY CUTS WILLIAM SONOMA TO UNDERWEIGHT: Morgan Stanley analyst Simeon Gutman downgraded Williams-Sonoma (WSM) to Underweight from Equal Weight, as he believes top and bottom-line pressures will intensify in 2019. He projected same-store sales growth may slow more than the market is expecting in 2019 due to moderating Pottery Barn sales, a slowdown in consumer spending and competition "reaching new heights in home furnishings." Additionally, Williams-Sonoma is more exposed to tariffs than most retailers he covers, Gutman noted. He cut his price target on Williams-Sonoma shares to $49 from $55. Shares of the retailer are down over 2.3% to $51.27 in late morning trading.
LOOP CUTS LOWE'S TO HOLD: Loop Capital analyst Laura Champine downgraded Lowe's (LOW) to Hold from Buy and lowered her price target for the shares to $99 from $125. The analyst thinks she was previously too optimistic on Lowe's likely margin progression. She still expects the company's fiscal 2019 same-store-sales to rise 3%, but she believes Lowe's will need to be more promotional to achieve this. Further, the analyst expects industry demand to moderate this year. Management's initiatives to drive sales will have a long-term payoff, "but we are not seeing significant progress in stores yet," Champine told investors in a research note. As such, the analyst believe shares of Lowe's are reasonably priced at current levels.
TEVA UPGRADED AT TWO FIRMS: UBS analyst Navin Jacob upgraded Teva Pharmaceutical (TEVA) to Buy from Neutral and raised his price target for the shares to $24 from $23 after assuming coverage of the name. With the stock trading at six times 2020 earnings estimates, the Street is overestimating the company's debt pay-down risk, Jacob told investors in a research note. He finds the stock "too cheap to ignore" after being down 60% in the last five years.
Piper Jaffray analyst David Amsellem upgraded Teva Pharmaceutical to Neutral and raised his price target for the shares to $16 from $15. The analyst said that while the "reality of the erosion" of Copaxone is not lost on him, he no longer perceives downside risk that is "significantly greater than that of other major U.S. generics companies." He sees a more balanced risk/reward on the shares after removing the risk of further "dramatic erosion" of EBITDA going forward. Shares of Teva are higher by 4% to $19.50 following the two analyst upgrades.
Tesla
-5.37 (-1.80%)
Walmart
+1 (+1.03%)
Lowe's
-0.25 (-0.27%)
Williams-Sonoma
-1.12 (-2.13%)
Teva
+0.77 (+4.11%)