Check out today's top analyst calls from around Wall Street, compiled by The Fly.
COCA-COLA CUT TO NEUTRAL AT CITI: Citi analyst Wendy Nicholson Thuresday night downgraded Coca-Cola (KO) to Neutral from Buy, saying the company's guidance implies FY19 earnings growth of plus or minus 1%. Coca-Cola has reported earnings per share of $2.00, plus or minus 10c, for the last eight years, with strong underlying growth offset by dilution from refranchising activities and currency headwinds, Nicholson told investors in a research note.
GENERAL DYNAMICS CUT TO NEUTRAL AT CREDIT SUISSE: Credit Suisse analyst Robert Springarn downgraded General Dynamics (GD) to Neutral from Outperform and lowered his price target to $184 from $190. In a research note to investors, Springarn said the acquisition of CSRA appears to be only "nominally accretive" to 2019, well short of his expectations, and said he believes the acquisition has significantly reduced the company's balance sheet flexibility and may limit future shareholder returns. Additionally, Springarn sees increasing competitive threats in both IT and Aerospace, which dims his growth outlook. Springarn said he is no longer convinced that General Dynamics can outperform, at least until management can show that its strategy warrants a higher multiple.
AIG CUT TO HOLD AT ARGUS: Argus analyst Jacob Kilstein downgraded AIG (AIG) to Hold for Buy after its latest Q4 earnings miss driven by "catastrophe losses, large reserve charges, and poor investment results", saying the stock is consistently underperforming. The analyst believes the company will continue to deal with "restructuring charges and higher-than-normal catastrophe losses", adding that while its price to book ratio of 0.6-times implies a discount to the peer industry average of 1.6-times, it is justified by its "below-average ROE and quarterly losses."
However, AIG was also upgraded to Buy from Neutral this morning at Compass Point.
JEFFERIES SAYS APPLE SERVICES GROWTH UNLIKELY: It appears that Apple (AAPL) will likely announce its new over-the-top streaming service as soon as late March for a potential Spring release, Jefferies analyst Timothy O'Shea told investors in a research note titled "Apple Video Coming Soon; Not Feeling the Love." The analyst said that while Apple Video represents upside to his detailed Services model, unfavorable economics might discourage third party content producers from participating, limiting its growth potential. He thinks the service will operate similarly to the App Store where Apple will take a 30% revenue cut. Further, O'Shea pointed out that it would take 250M subscribers to represent 5% of 2023 revenue. For now Services growth is unlikely to offset iPhone unit declines, which should persist through 2019, contended the analyst. He kept a Hold rating on Apple with a $160 price target.
CITI SUGGESTS ACQUISITION CANDIDATES IN OIL SERVICES: Consolidation amongst the pressure pumpers is likely to pick up in the current period of profitability bifurcation, Citi analyst Scott Gruber said. The analyst, however, believes Schlumberger (SLB) and Halliburton (HAL) seem unlikely to acquire and that consolidation looks more likely amongst the mid-tier pumpers. Of those, Keane Group (FRAC) is most likely to acquire, said the analyst. FTS International (FTSI) screens as the most likely to be acquired, although pumping segments at Patterson-UTI (PTEN) and Superior Energy (SPN) could also be targeted, contended Gruber. He believes Keane and FTS looks like the most attractive combination. Both shares could rise in the event of a deal announcement, said the analyst.
Coca-Cola
+0.08 (+0.18%)
General Dynamics
+2.02 (+1.17%)
AIG
+0.89 (+2.22%)
Apple
-0.62 (-0.36%)
Keane Group
+0.16 (+1.48%)
FTS International
+0.19 (+1.99%)
Patterson-UTI
+0.38 (+2.76%)
Superior Energy
+0.115 (+2.70%)
SLB
+0.81 (+1.84%)
Halliburton
+0.12 (+0.38%)