Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BOFA BOOSTS NIKE TO NEUTRAL: BofA/Merrill analyst Robert Ohmes upgraded Nike (NKE) to Neutral with a price target of $98, saying that he expects the "accelerated democratization" of the brand to offset the broader future challenges around "significant" third-party retail store closures and global stagnation in "performance" footwear/apparel. The analyst noted that while Adidas (ADDYY) is resurging as a global competitor, he sees the decline in consensus estimates for Nike as having ended and anticipates some Q1 earnings upside from the company's "less technical 'Sportswear' businesses."
LOOP SAYS BUY WESTERN DIGITAL: Loop Capital analyst Ananda Baruah upgraded Western Digital to Buy from Hold with a price target of $75, up from $50. The analyst cites his findings that flash memory average selling prices are set to increase starting in the September and December quarters while also sustaining those increases in 2020, along with expectations of strong hyperscale HDD demand next year. Baruah is modeling his price target with an assumed 2021 earnings multiple of 10-times, but adds that there is potential for that multiple to rise to 12- to 15- times if Western Digital can grow its revenue by about 15% in 2020.
UBS CUTS TAPESTRY TO NEUTRAL: UBS analyst Jay Sole downgraded Tapestry (TPR) to Neutral from Buy with an unchanged price target of $25. The analyst sees little potential for upward earnings revisions after his firm's Evidence Lab suggested that U.S. consumer holiday spending intentions this year are "lackluster." Further, a key takeaway from UBS's recent Future of Retail conference was pressure on mid-tier brands like Coach and Kate Spade from used handbag market growth, which is likely to continue into the foreseeable future, Sole told investors in a research note. The analyst models 2% annual earnings growth for Tapestry over the next five years. This level of growth makes the stock's current valuation fair, contended the analyst.
EVERCORE RAISES HP ENTERPRISE TO IN LINE: Evercore ISI analyst Amit Daryanani upgraded HP Enterprise (HPE) to In Line from Underperform a price target of $15, up from $13. The analyst is incrementally more positive on cash flow resiliency, the Cray acquisition, recent data points that indicate H3C is performing better than other OEMs in China, and valuation.
NOMURA UPS XILINX TO BUY: Nomura Instinet analyst David Wong upgraded Xilinx (XLNX) to Buy from Neutral with an unchanged price target of $115. Many risks remain for U.S. semiconductor companies, including uncertainties related to U.S./China trade issues and U.S. action against Chinese companies such as Huawei, Wong told investors in a research note. However, Xilinx's stock price and estimates have adjusted to reflect these risks, added the analyst. He pointed out that the company is growing even with Huawei constraints. Xilinx has also gained meaningful share from Intel's (INTC) Altera in recent quarters, contended Wong.
STEPHENS DOWNGRADES DELTA TO EQUAL WEIGHT: Stephens analyst Jack Atkins downgraded Delta Air Lines (DAL) to Equal Weight from Overweight with a price target of $57, down from $75. Investors are "understandably frustrated" that despite a highly favorable operating environment this year, Delta is unable to more aggressively drive yields higher, Atkins told investors in a research note. In addition, the company, for the third time in the last four years, has raised its unit cost outlook for the second half of the year, adds the analyst. As a result, he believes fiscal 2020 consensus estimates are too high and may need to come down "materially" given the uncertainty around Delta's domestic yields and the impact to fuel prices from IMO 2020. Atkins does not see the stock re-rating higher in this environment.
Nike
+0.97 (+1.03%)
Western Digital
+0.75 (+1.29%)
Tapestry
-1.03 (-3.97%)
HP Enterprise
+0.42 (+2.93%)
Xilinx
+0.15 (+0.16%)
Delta Air Lines
-0.23 (-0.43%)