Check out today's top analyst calls from around Wall Street, compiled by The Fly.
JPMORGAN MAINTAINS $6 PRICE TARGET ON GE: JPMorgan analyst Stephen Tusa said there is no change to his $6 price target on General Electric (GE) following the company's BioPharma unit sale to Danaher (DHR). He kept a Neutral rating on GE, which closed Tuesday up 26c to $10.66. While the BioPharma deal "adds incrementally" to the sum-of-the-parts, it also helps to "unmask the underappreciated enterprise cash burn," Tusa told investors in a research note. He sees the company's cash burn at sustainably in the $2B range now, and a run rate on earnings that "supports a stock well below standing levels." Further, the analyst's "quick initial read" on GE's annual filing suggests "there is more than enough to support" his "standing view on the numbers." Tusa admitted, however, that the sale to Danaher is a better after-tax price than he would have expected, "though certainly not outside the realm of possibilities." However, it leaves a Healthcare asset "that is short on growth," Tusa said, with an implied total enterprise value that is below what he had in his most recent sum-of-the-parts analysis.
PHILIP MORRIS UPGRADED TO BUY AT UBS: UBS analyst Robert Rampton upgraded Philip Morris (PM) to Buy from Neutral and raised his price target for the shares to $101 from $86. The company's valuation hinges on its heated tobacco proposition, iQOS, Rampton told investors in a research note titled "When death and taxes become less certain; upgrade to Buy." And he expects iQOS net revenue to grow from $4B in 2018 to $10.6B by 2021. Net of cannibalization, this translates to 8% annual organic revenue growth through 2021, or "well ahead" of Philip Morris' large European and U.S. peers, said Rampton. "Easy comparisons and a benign tax environment" for 2019 in key markets are also part of the analyst's upgrade to Buy.
CHUBB CUT TO UNDERPERFORM AT CREDIT SUISSE: Credit Suisse analyst Michael Zaremski downgraded Chubb (CB) to Underperform from Neutrak and cut his price target to $131 from $141 as he thinks the assumed catastrophe load embedded within consensus EPS forecasts is materially too low/optimistic, and as he has less confidence that the company will be able to organically grow policy counts in its peer-leading US high-net-worth personal home/auto businesses due to heightened competition from new entrants, one of whom is led by a spate of former Chubb executives. The analyst also lowered his price target on the shares to $131 from $141.
WW DOWNGRADED AT MULTIPLE FIRMS FOLLOWING EARNINGS, GUIDANCE: WW (WTW) was downgraded to Neutral from Buy at DA Davidson, to Hold from Buy at SunTrust and Craig-Hallum, to Sector Weight from Overweight at KeyBanc, and to Perform from Outperform at Oppenheimer.
SunTrust analyst Michael Swartz, who downgraded the stock formerly known as Weight Watchers to Hold and lowered his price target to $25 from $69, said that after the Q4 earnings miss and "startling" 2019 guidance, the stock would drop considerably, but he also sees additional risk to its "anemic" outlook later this year. Swartz further stated that investors will have to have some comfort around the company's earnings power and competitive threats before stepping in, adding that any rebound is unlikely to come before 2020 "at the earliest".
In addition to the bevy of downgrades, JPMorgan analyst Christina Brathwaite lowered her price target for WW to $14 from $25 and added the shares to her firm's U.S. Equity Analyst Focus List as our top short idea. Recruitment trends in 2019 are starting "well below" last year, as marketing has missed the mark particularly with lapsed subscribers, Brathwaite wrote in a post-earnings research note. She believes WW's 2019 revenue guidance may be at risk as it embeds recruitment trends improving from current levels following the Spring marketing campaign, retention rates improving to over 10 months during 2019 versus 9-10 months currently and limited marketing reinvestments beyond Q1. The analyst kept an Underweight rating on WW.
GE Aerospace
+0.03 (+0.28%)
Danaher
+3.81 (+3.09%)
Philip Morris
+0.71 (+0.82%)
CB Bancshares
+ (+0.00%)
WTW
-10.02 (-33.85%)