Check out today's top analyst calls from around Wall Street, compiled by The Fly.
GOLDMAN SACHS CUTS ZOOM, SOLARWINDS, BOOSTS ANAPLAN: Goldman Sachs analyst Heather Bellini downgraded Zoom Video Communications (ZM) to Sell from Neutral while raising her price target for the shares to $66 from $53. The analyst said her "blue sky scenario" is already more than factored into investor expectations at current valuation levels. Bellini, however, added that her view on Zoom Video's ability to continue to execute well and exceed consensus expectations remains unchanged. Nonetheless, the potential for long-term performance is well understood by the market, contended the analyst.
Bellini also downgraded SolarWinds (SWI) to Sell from Neutral and lowered her price target for the shares to $17.50 from $20. While the company's valuation, on an absolute basis, does not appear "overly expensive," the shares have "limited possibility" for multiple expansion given its end market exposure and already best in class operating margins, Bellini said. SolarWinds benefits from cloud migration in certain areas, but its on premise footprint of license plus maintenance revenue is an offset, the analyst adds. She favors more growth oriented companies in her coverage universe.
Conversely, Bellini upgraded Anaplan (PLAN) to Buy from Neutral and raised her price target for the shares to $62 from $48. The company's deal sizes are growing and the pace of its expansions are increasing as sales productivity improves, Bellini noted. As such, the analyst sees a "high likelihood" of the company potentially achieving her 2020 "Blue Sky scenario." Anaplan has positioned itself as the leading enterprise planning platform vendor, as the company can address a broad range of planning use cases, said Bellini.
MIZUHO BOOSTS WESTERN DIGITAL TO BUY: Mizuho analyst Vijay Rakesh upgraded Western Digital (WDC) to Buy from Neutral and raised his price target for the shares to $55 from $47. The analyst believes the Huawei ban has been a "major overhang" for handset radio frequency suppliers Qorvo (QRVO) and Skyworks (SWKS), and memory suppliers like Western Digital. The "truce" over the weekend between President Trump and Chinese President Xi Jinping sets up improving visibility, a rebound in orders and upside to "depressed expectations" for the Huawei-exposed semi suppliers in the second half of 2019, Rakesh noted. For Western Digital, the analyst sees an improved demand outlook with 50M-70M additional Huawei handsets into the second half of the year.
LONGBOW CUTS YUM! TO UNDERPERFORM: Longbow analyst Alton Stump downgraded Yum! Brands (YUM) to Underperform from Neutral, noting that the stock is trading at nearly a 25% premium to its closest quick-service peers despite similar comp growth, unit growth and leverage. Confidence among his Taco Bell franchisee contacts in new product development has "waned significantly" since former Taco Bell head Brian Niccol left to become CEO of Chipotle (CMG), said Stump, who thinks it is highly likely Taco Bell's comp growth profile will slow meaningfully in coming quarters. He also expects Pizza Hut's comps to "remain stagnant to up 1% at best over the next 18+ months," said the analyst, who has a $91 price target on Yum! shares.
GUGGENHEIM CUTS FOX TO NEUTRAL: Guggenheim analyst Michael Morris downgraded Fox Corp. (FOX, FOXA) to Neutral from Buy and lowered his price target for the shares to $38 from $43 after the company said during its May investor presentation that it "does not see a substantial or profitable a la carte market in the near term for a Fox Corporate bundle." The company, which will focus on growing subscription revenue through its traditional and vMVPD distribution relationships in the near-term, will also see higher spending in the Television segment as Fox re-establishes production assets to pursue its entertainment content goals, said Morris. While he continues to view the company being well positioned among media peers, he thinks this positioning is reflected given the stock's current premium valuation.
JEFFERIES SURVEY SAYS MOST UNLIKELY TO USE FACEBOOK CRYPTOCURRENCY: Jefferies analyst Brent Thill believes Facebook's (FB) Libra is unlikely to be a near-term "game-changer" for the company after he surveyed 600 U.S. social media users. Most of those surveyed said they were unlikely to use the cryptocurrency, Thill told investors in a research note. A lack of trust in Facebook and existing mobile payment wallets were cited as impediments to adoption, explained the analyst. Thill, however, remains bullish on Facebook's core advertising opportunity. He sees $10 of earnings per share in two years and kept a Buy rating on the stock with a $230 price target.
Zoom Video
-3.445 (-3.88%)
SolarWinds
-0.35 (-1.91%)
Acquired by Thoma Bravo 6/22
-0.5 (-0.99%)
Western Digital
+1.72 (+3.62%)
Yum! Brands
-1.15 (-1.04%)
Fox Corp.
-0.57 (-1.56%)
Fox Corp.
-0.6 (-1.64%)
Ticker changed to META
+0.43 (+0.22%)