Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MORGAN STANLEY RAISES SPLUNK TO OVERWEIGHT: Morgan Stanley analyst Keith Weiss upgraded Splunk (SPLK) to Overweight from Equal Weight with a price target of $169, up from $140. Once Splunk is through its shift to a 100% recurring revenue model and annual invoicing, investors will have better visibility into a company well positioned for key secular trends in data and monitoring, Weiss tells investors. He believes Splunk can sustain 25%-plus software annual recurring revenue growth, with free cash flow margins in the mid-20s, yielding $6 in free cash flow per share. Meanwhile, Splunk shares currently trade at a 30% valuation discount relative to peers on an enterprise value to 2020 sales basis, adds Weiss. As such, he believes the stock looks undervalued at current levels.
CITI CUTS AMARIN, SEES INCREASED VASCEPA SALES PRICED IN: Citi analyst Joel Beatty downgraded Amarin (AMRN) to Neutral from Buy with a price target of $27, up from $23. The analyst says his new price target reflects a valuation of $11.2B when assuming a diluted share count of 413M. He models for sales of $3.2B in 2024, up from $2.7B previously, reflecting increased confidence in a Vascepa label "that will allow broad use and cost effectiveness that supports taking modest price increases in future years." He believes Vascepa is an effective drug and anticipates sales accelerating significantly over the next year. However, this is now priced into the stock following the recent rally, Beatty tells investors.
MORGAN STANLEY STEPPING TO SIDELINES ON WORKDAY: Morgan Stanley analyst Keith Weiss downgraded Workday (WDAY) to Equal Weight from Overweight with a price target of $180, down from $219, after he trimmed his near-term forecasts to account for maturity in the HCM segment and a more difficult spending backdrop. While the company said its pipeline into FY21 remains strong, CEO Aneel Bhusri noted they have "definitely" seen some deals get pushed out and deferred, said Weiss. The analyst also cites the firm's weak CIO survey data, particularly for ERP and HR Software, as informing his macro concerns.
SOCIETE GENERALE SEES BIG DOWNSIDE POTENTIAL FOR NETFLIX: A "wider competitive set" has started to dilute Netflix's (NFLX) perceived "uniqueness" and will probably restrain its pricing power in the short term, Societe Generale analyst Christophe Cherblanc tells investors in a research note. The low price points set by Disney+ (DIS) at $6.99 per month and Apple TV+ (AAPL) at $4.99 per month will likely make Netflix more cautious exercising its pricing power, Cherblanc contends. Further, he believes the company's 2019 price increases have had a slightly higher than expected impact on U.S. churn. The analyst keeps a Sell rating on Netflix with a $200 price target. The streaming service closed Friday up $5.41 to $295.03. Despite the recent pullback, the shares still have "significant downside" risk, Cherblanc contends. Nonetheless, the analyst thinks Netflix will retain a dominant position in a "rapidly expanding" over-the-top market and deliver steady margin expansion.
JPMORGAN UPGRADES VIASAT TO OVERWEIGHT: JPMorgan analyst Philip Cusick upgraded ViaSat (VSAT) to Overweight from Neutral with a price target of $90, up from $84. The analyst says that while many investors focus on the potential for the ViaSat-3 constellation, "which is significant," he's more focused today on the company's "long runway" of Government Systems growth, driven by its radio portfolio, mobile broadband, and future margin expansion as the ViaSat-3 fleet is deployed. Government Systems has driven a series of strong revenue and EBITDA beats lately for ViaSat, Cusick tells investors in a research note. He believes that defense buying plans will maintain and grow that strength. At the same time, the analyst looks for continued "robust" Satellite Services growth led by consumer broadband, in-flight connectivity, and non-residential broadband.
FIVE BELOW MAKES LIST: JPMorgan analyst Matthew Boss added Five Below (FIVE) to his firm's U.S. Analyst Focus List and keeps an Overweight rating on the shares with a $143 price target. The analyst sees see upside versus consensus same-store-sales on Five Below and Overweight-rated Dollar General (DG). He views the recent pullback in shares of Five Below as a buying opportunity. With the shares off 20% since April 30, the risk/reward is favorable, Boss tells investors in a research note.
Amarin
-0.15 (-0.63%)
Netflix
+6.36 (+2.16%)
Bought by CSCO
+2.58 (+2.17%)
Workday
-2.1 (-1.27%)
ViaSat
+2.94 (+4.09%)
Disney
+1.51 (+1.04%)
Five Below
+2.41 (+2.02%)
Dollar General
-0.29 (-0.18%)