Check out today's top analyst calls from around Wall Street, compiled by The Fly.
UBS CUTS KLA-TENCOR, APPLIED MATERIALS, LAM RESEARCH TO SELL: KLA-Tencor (KLAC), Applied Materials (AMAT), and Lam Research (LRCX) were all downgraded to Sell at UBS.
UBS analyst Timothy Arcuri double downgraded KLA-Tencor to Sell from Buy with a price target of $140, down from $192. KLA has been among the top five semis stocks over the past six months, outperforming the S&P semis industry group by ~45%, Arcuri said. The analyst, however, sees risk to estimates moving through the first half of 2020 with wafer fab equipment spending peaking. The "run-rate math is most worrisome" for KLA-Tencor's core foundry/logic segment, contended the analyst.
Arcuri downgraded Applied Materials to Sell from Neutral with a price target of $48, down from $49. The analyst sees headwinds for the company into the first half of 2020 as wafer fab equipment spending peaks in the near term and contracts for a few quarters. Applied Materials has estimate risk moving though 2020 "given a very extended run-rate in foundry/logic," Arcuri said.
Arcuri downgraded Lam Research to Sell from Neutral with an unchanged price target of $240. The analyst sees risk of wafer fab equipment spending peaking in the near-term, led almost wholly by the foundry/logic segment. However, with Lam's revenue more exposed to memory than peers, it should have less downside as memory WFE is already at cyclical lows, Arcuri said. Nonetheless, he believes the company could face near-term headwinds.
NORTHLAND DOWNGRADES AMD TO MARKET PERFORM: Northland analyst Gus Richard downgraded AMD (AMD) to Market Perform from Outperform with an unchanged price target of $36. AMD shares are now ahead of the company's fundamentals, Richard told investors in a research note titled "Bull and Bears Make Money, Pigs Get Slaughtered." The analyst said that while the shares "are likely to melt up between now and the end of the year," he would not be chasing them. He expects profit taking in the new year and thinks 2020 will represent a "peak growth year" for AMD. Further, as AMD market share increases, incremental share gains "get much more difficult" due to Intel's (INTC) incumbency, contended Richard.
MORGAN STANLEY GOES TO UNDERWEIGHT ON MACROGENICS: Morgan Stanley analyst David Lebowitz downgraded MacroGenics (MGNX) to Underweight from Equal Weight with a price target of $6, down from $17. Based on recent data, he believes that margetuximab might be approvable, but that the drug probably has a limited market opportunity. He based this view on the second interim survival analysis from the Phase 3 SOPHIA trial which he believes suggests that the drug is unlikely to achieve an overall survival benefit when the final analysis is complete in 2020. Though MacroGenics has an "expansive" R&D program with multiple candidates of interest, Lebowitz said he needs to see "clean data" before gaining more comfort in the pipeline opportunities.
GOLDMAN BOOSTS LOWE'S TO CONVICTION BUY: Goldman Sachs analyst Kate McShane added Lowe's (LOW) to her firm's Americas Conviction List while maintaining a Buy rating on the shares. The analyst also raised her price target for the shares to $135 from $123. The retailer's Q3 results represented a positive step in rebuilding investor confidence around its execution capabilities and transformation strategy, McShane said in a post-earnings research note. Lowe's reported another quarter of sequential gross margin improvement, raised full-year earnings guidance, and remains confident that strategic initiatives can help drive a comp acceleration in Q4, said the analyst. She believes the company remains in the early days of its transformation and sees See potential upside to comp and margin improvement in 2020.
CREDIT SUISSE INITIATES VIRGIN GALACTIC AT OUTPERFORM: Credit Suisse analyst Robert Spingarn initiated coverage of Virgin Galactic (SPCE) with an Outperform rating and $12.43 price target. The company has a "distinct" first-to-market advantage, by at least two years, Spingarn said. Further, Virgin Galactic's closest competitor, Blue Origin, has a ground-launch flight model that may not be as consumer-friendly as Virgin's air-launched system, contended the analyst. The analyst believes high elasticity of demand combined with high incremental margins will enable demand growth to outpace supply growth as Virgin Galactic expands and new entrants come into the market.
KLA Corp.
-10.53 (-6.07%)
Lam Research
-9.04 (-3.30%)
Applied Materials
-2.05 (-3.44%)
AMD
-1.08 (-2.64%)
MacroGenics
-0.62 (-7.19%)
Lowe's
-0.16 (-0.14%)
Virgin Galactic
+0.14 (+1.54%)