Check out today's top analyst calls from around Wall Street, compiled by The Fly.
HSBC CUTS APPLE TO REDUCE: HSBC analyst Erwan Rambourg downgraded Apple (AAPL) to Reduce from Hold while raising his price target for the shares to $180 from $160. Reduce is HSBC's equivalent of a Sell rating. The returns from Apple's recent announcements, including the Apple News+ premium news subscription, the Apple Card in partnership with Goldman Sachs (GS), Apple Arcade games as part of the App store and video subscription Apple TV+, could "take some time to extract," Rambourg told investors in a research note. The new services will potentially generate revenue of $12B by 2024, but yield lower margins versus Apple's current services portfolio, says the analyst. Further, while the new services could make the company's ecosystem "more sticky," they won't necessarily enable Apple to recruit more consumers to the iPhone, he contended. Rambourg believes that following the stock's 41% rise off the January 2019 lows and "relative optimism / complacency" on the services announcement, "there is now some downside."
NOMURA INITIATES TESLA AT NEUTRAL: Nomura Instinet analyst Christopher Eberle initiated coverage of Tesla (TSLA) with a Neutral rating and $300 price target. Tesla is a "true disruptor" of the automotive industry and its approach has "several moats," Eberle told investors in a research note. The analyst, however, is cautious near term as Tesla navigates the "breakneck pace" of its global expansion. Eberle likens Tesla's position in electric vehicles and "Auto 2.0" to Salesforce (CRM) at the beginning of its software-as-a-service digital transformation era and its disruption of the way businesses bought and consumed software. Electric vehicle manufacturing and the selling of the cars are just the beginning of what CEO Elon Musk has in mind for Tesla, contended Eberle. He sees the company as "likely the foundation for automation of transportation."
UBS BOOSTS GILEAD TO BUY: UBS analyst Carter Gould upgraded Gilead Sciences (GILD) to Buy from Neutral and raised his price target for the shares to $77 from $75. Following the failure of selonsertib in nonalcoholic steatohepatitis, Gilead announced "two important clinical wins" in the positive Descovy PrEP data and filgotinib Finch1/3 data, Gould told investors. These unlock two $2B-plus revenue opportunities and go "far to de-risk" the company's growth in 2021 and beyond, contended the analyst. Further, while the analyst expects a Q1 earnings miss, he believes 2019 estimates will move higher as NASH precommercialization spend likely comes out of guidance.
KEYBANC BOOSTS NORDSTROM TO OVERWEIGHT: KeyBanc analyst Edward Yruma upgraded Nordstrom (JWN) to Overweight from Sector Weight with a price target of $55. Recent meetings with co-CEO Erik Nordstrom and CFO Anne Bramman affirm that the company is prepared to transition its asset base as e-commerce continues to grow, Yruma told investors in a research note. The analyst believes Nordstrom is in "two fundamentally attractive sectors of softlines retail: premium and off-price." He believes the current valuation does not reflect the valuation of Nordstrom's e-commerce and Rack assets. Demand weakness as transient and the shares are attractively valued, said Yruma.
CITI UPGRADES UNDER ARMOUR TO BUY: Citi analyst Paul Lejuez assumed coverage of Under Armour (UA, UAA) from Kate McShane and upgraded the shares to Buy from Neutral. He raised his price target for the stock to $29 from $23. Under Armour is "growing up" with a renewed focus on driving profitability and return on invested capital, Lejuez told investors in a research note. With just a 3.4% EBIT margin in 2018, the company has the opportunity to recapture 600 basis points in EBIT margin over the next several years, said the analyst. And near-term, Lejuez sees upside to management's fiscal 2019 gross margin guidance.
MORGAN STANLEY CUTS NOVARTIS TO UNDERWEIGHT: Morgan Stanley analyst Mark Purcell downgraded Novartis (NVS) to Underweight from Equal Weight and lowered his price target for the shares to 80 francs. The spinoff of Alcon (ALC) will put more attention on the generics risk Novartis faces in its pharma business, Purcell told investors in a research note. The analyst believes this generic pressure is not priced into shares of Novartis. His top pick remains Roche (RHHBY). Separately, Morgan Stanley analyst David Lewis initiated Alcon with an Overweight rating and $65 price target, stating that he expects its pipeline, sales and capex reinvestment to drive an inflection in revenue growth and margin expansion post the spinoff from Novartis.
Alcon
-1.15 (-1.97%)
Apple
-0.04 (-0.02%)
Tesla
+3.22 (+1.18%)
Gilead
+1.24 (+1.88%)
Nordstrom
+0.44 (+1.00%)
Under Armour
+0.42 (+2.24%)
Under Armour
+0.5 (+2.41%)
Novartis
-1.32 (-1.58%)
Roche
+ (+0.00%)