Check out today's top analyst calls from around Wall Street, compiled by The Fly.
JPMORGAN SPECULATES ON M&A TARGETS FOR APPLE: Despite Apple (AAPL) itself offering no comments on the subject or giving any indication to investors of its intentions, potential acquisition targets for the company have been widely discussed in press reports on a regular basis, JPMorgan analyst Samik Chatterjee told investors in a research note. The speculation has included a wide range of industries, from automobile manufacturers, like Tesla (TSLA), to information platforms, like Twitter (TWTR), added the analyst. He believes the speculation has likely in part been driven by the $130B of net cash on Apple's balance sheet. Chatterjee finds three industries to be of the most strategic value to Apple for potential deals: Video gaming, smart home speaker, and video content. These areas provide potential growth opportunities to leverage Apple's services over a wider installed base, said the analyst. In video gaming, he sees Activision Blizzard (ATVI) as being the best strategic fit for Apple. In smart home speaker, Chatterjee believes Sonos (SONO) offers the best strategic of the names mentioned in the press. In video content, the analyst views Netflix (NFLX) as the best strategic fit, although he "appreciates a combination is less likely as Netflix is unlikely to be a seller for a modest premium."
OKTA DOWNGRADED, INITIATED: KeyBanc analyst Rob Owens downgraded Okta (OKTA) to Sector Weight from Overweight, saying that while the Street clearly anticipates meaningful upside to expectations, he believes many of the upside scenarios render shares fairly valued at current levels. While the analyst remains bullish on the broad opportunity within the identity market and more specifically the single sign on opportunity that Okta is exploiting, Owens would not add to positions at current levels.
Morgan Stanley analyst Melissa Franchi started Okta with an Equal Weight rating and $85 price target, stating that the company has a long runway in the identity and access management market, which she sees growing, but she believes most of that potential growth is likely reflected in the stock's current valuation. While she sees Okta sustaining better than 30% top line growth for at least the next five years, Franchi also noted that the stock is up more than 150% year-over-year and she prefers to wait for a more attractive entry point.
MACROGENICS CUT TO SELL AT CITI: Citi analyst Yigal Nochomovitz downgraded MacroGenics (MGNX) to Sell from Neutral, stating that his re-examination of the prior Phase 1 data underpinning the ongoing Phase 3 SOPHIA trial has led him to revise his base case expectation to a failure for the trial. MacroGenics previously stated that it expects the SOPHIA Phase 3 metastatic breast cancer study of margetuximab to disclose top-line results in the first quarter of 2019. The level of clinical evidence to support success is unusually narrow and limited, said Nochomovitz, who sees about a 75% chance of SOPHIA failing. In that event, he thinks the stock will fall 25%-30%. In the event that SOPHIA succeeds, he sees MacroGenics shares rising 30%-40%, added Nochomovitz, who lowered his price target on the stock to $10. In late morning trading, shares of Macrogenics were lower by 4.5% to $10.92.
CONOCOPHILIPS UPGRADED TO BUY AT GOLDMAN: Goldman Sachs analyst Neil Mehta upgraded ConocoPhillips (COP) to Buy from Neutral and raised his price target to $82 from $76. The analyst also raised his 2019-2022 cash flow forecasts by an average of 8% following better than expected Q4 results to reflect better long-term differential assumptions outside of the U.S., a reduced operating cost outlook given recent trends, higher oil volumes in the Lower 48, Alaska, Asia to reflect project-by-project builds and slightly higher Australia LNG distribution payments up to Conoco.
INTERCEPT UPGRADED TO STRONG BUY AT RAYMOND JAMES: Raymond James analyst Steven Seedhouse upgraded Intercept (ICPT) to Strong Buy from Outperform and raised his price target to $184 from $125. The analyst cited his "unusually high amount of conviction in REGENERATE" trial data, noting that all the attempts to test his confidence in the investment story have only made him more bullish. Seedhouse states the Street has not fully accepted his expectation that the data will not be a headwind to the program's success, adding that his key questions heading into the release will be around the efficacy on both primary endpoints and the safety profile of the trial. Shares of Intercept were higher by almost 3% to $120.05 in late morning trading.
Apple
+3.98 (+2.39%)
acquired by MSFT
+0.35 (+0.76%)
Sonos
+0.74 (+6.09%)
Netflix
+7.69 (+2.26%)
Okta
-1.79 (-2.14%)
MacroGenics
-0.5 (-4.39%)
ConocoPhillips
+0.33 (+0.48%)
Intercept
+2.79 (+2.39%)