Check out today's top analyst calls from around Wall Street, compiled by The Fly.
GOLDMAN CUTS THREE AMERICAS MULTI-INDUSTRY STOCKS: Goldman Sachs analyst Joe Ritchie does not see the setup as favorable for the Americas Multi-Industry sector into the Q2 reporting season with the exception of Buy-rated Honeywell (HON). The analyst said fiscal 2020 consensus expectations are too high for a third of the companies he covers, while the setup is tough for the second half of 2019 as comps are only easier for five out of 27 stocks "at a time when growth is decelerating." As a result, Ritchie downgraded three cyclical stocks to Sell, namely Cognex (CGNX) and Parker-Hannifin (PH) from Neutral, and Kennametal (KMT) double downgraded from Buy. He also upgraded Timken (TKR) to Buy from Neutral as he believes expectations are more appropriately calibrated and its relative valuation is "compelling."
GABELLI CUTS HOME DEPOT TO HOLD ON VALUATION: Gabelli analyst Alvaro Lacayo downgraded Home Depot (HD) to Hold from Buy citing valuation with the shares trading above his private market value estimate of $216. The current valuation fully reflects the quality of Home Depot along with its above-market growth over the next three years, Lacayo told investors in a research note.
MORGAN STANLEY CUTS FACTSET TO UNDERWEIGHT: Morgan Stanley analyst Toni Kaplan downgraded FactSet Research Systems (FDS) to Underweight from Equal Weight with a price target of $263, down from $264. The company's "decelerating" earnings growth brings risk to its "full" valuation, Kaplan tells investors in a research note. Moderating annual subscription value and lower margin improvement may lead the company to see FY20 EPS growth that is its lowest in the past four years, warned Kaplan, who projects total ASV growth of 5%-5.5% and revenue growth of 5% over the next twelve months.
BOFA BOOSTS LABCORP TO NEUTRAL: BofA/Merrill Lynch analyst Derik De Bruin upgraded LabCorp (LH) to Neutral from Underperform and raised his price target on the shares to $182 from $140, stating that he has become increasingly more constructive on industry trends since January. He also thinks it is notable that LabCorp has a lack of macro exposure at a time when global industrial indicators are softening, De Bruin stated.
ANALYSTS WEIGH IN ON MICRON: UBS analyst Timothy Arcuri raised his price target for Micron Technology (MU) to $47 from $37 while maintaining a Neutral rating on the shares. The analyst, who remains concerned about producer inventory overhang and Micron's forward cost curve in both DRAM and NAND, increased his estimates for the company to reflect more moderate NAND pricing declines, which he notes are driven in part by the Toshiba/Western Digital (WDC) joint venture shutdown. Micron's willingness to cut capital expenditures to avoid burning cash argues for a better near-term multiple of tangible book value, Arcuri said. However, fiscal 2020 "remains a transition year" where its gross margin will contract another 300-500 basis points in the first half of the year, the analyst cautioned.
Meanwhile, Lynx Equity Strategies analysts KC Rajkumar and Jahanara Nissar said that Micron's "impressive" climb to the mid-$40 levels since its earnings report is powered by three factors, including the easing of Huawei restrictions, a supply outage at Toshiba's (TOSBF) Yokkaichi fab, and Japan trade restrictions of exports to South Korea of some essential raw materials used in semiconductor manufacturing. The analysts concluded that some of the additional factors "may have played out," and, noting headline risk to Micron as a "complex" earnings season approaches, have caused them to consider taking profits.
RBC Capital analyst Mitch Steves, however, kept his Outperform rating on Micron and noted that the company may be a "second derivative" beneficiary from the trade tensions between Japan and South Korea. The analyst contended that if SK Hynix and Samsung (SSNLF) are "forced" to procure high-purity hydrogen fluoride from a new source, Micron may gain market share as customers in the "mission-critical" data center environment shift their spending.
Kennametal
+0.205 (+0.59%)
Cognex
+0.13 (+0.31%)
Parker-Hannifin
+3.34 (+1.99%)
Timken
+0.8 (+1.68%)
Home Depot
-0.71 (-0.32%)
FactSet
-10.69 (-3.63%)
Labcorp
+0.345 (+0.20%)
Micron
-0.94 (-2.12%)