Check out today's top analyst calls from around Wall Street, compiled by The Fly.
CITI DOWNGRADES NETFLIX TO NEUTRAL: Citi analyst Jason Bazinet downgraded Netflix (NFLX) to Neutral from Buy with a price target of $325, down from $410, after taking over coverage of the name. The analyst said that consensus estimates are too high. Over the last seven years, there is a strong historical relationship between the company's cash outlays on content and its net subscriber additions, Bazinet told investors in a research note. However, Street forecasts "materially deviate from this long-term pattern," contended the analyst. He believes this suggests Netflix's cash content costs need to rise, or net add forecasts need to fall. Bazinet's numbers suggest that if content costs rise, Netflix shares could fall 15%. If net add forecasts come down, the stock could fall 5%, added the analyst.
NEEDHAM BOOSTS ROKU PRICE TARGET TO $200: Needham analyst Laura Martin raised her price target on Roku (ROKU) to $200 from $150 and kept her Buy rating, saying the company's promising aggregation platform economics in 2019 will be followed with accelerated subscription SVOD revenues in 2020. The analyst sees Roku as a "key beneficiary" with an installed base of 32M connected-TV homes in the U.S. as Disney+, Apple+, Peacock, and HBOMax streaming services accelerate customer acquisition spending. Martin added that the company should be valued as an "internet aggregator" comparable to YouTube in the video space.
PIPER RAISES TESLA PRICE TARGET TO $423: Piper Jaffray analyst Alexander Potter raised his price target for Tesla (TSLA) to $423 from $372 and kept an Overweight rating on the shares. It is "hard to find a more impactful disrupter than Tesla," Potter told investors in a research note partially titled "Say What You Will... Nobody Else Comes Close." Tesla has demonstrated some new skills lately, including high-volume manufacturing, "impressive" opex control, and "frugal" capital spending, contended the analyst. In an effort to more directly capture how these traits could ultimately impact Tesla's long-term revenue and margin profile, the analyst switched to a discounted cash flow-based valuation methodology. For "all its controversy and volatility," Tesla is a "must-own stock" in the transportation sector, said Potter.
OPCO INITIATES BEYOND MEAT AT PERFORM: Oppenheimer analyst Rupesh Parikh initiated coverage of Beyond Meat (BYND) with a Perform rating and no price target. The analyst looks "quite favorably" upon the Beyond Meat brand, product assortment, track record of innovation, longer-term prospects, and its positioning to the "very on-trend" alternative meat category. However, a "pricey" valuation, increasing competition, and the potential for new selling pressures following the expiration of the lock-up suggest "more muted upside potential," Parikh said. The analyst, despite his neutral rating, said Beyond Meat shares are "very much" on his radar.
UBS UPGRADES BOSTON BEER TO BUY: UBS analyst Sean King upgraded Boston Beer Company (SAM) to Buy from Neutral with a price target of $440, up from $415. The analyst expects continued double-digit sales and earnings growth from Boston Beer in fiscal 2020 and 2021, and sees upside to 2020 shipment and depletion guidance. Truly's "stellar" growth in fiscal 2019 failed to translate into meaningful earnings growth as the company's heavy reliance on co-packers weighed on margins, King told investors in a research note partially titled "Truly Compounding Growth." However, this headwind will ease into fiscal 2020 with greater internal capacity coming, added the analyst.
PIPER INITIATES FACEBOOK, ALPHABET AT OVERWEIGHT: Piper Jaffray analyst Michael Olson initiated coverage of Facebook (FB) with an Overweight rating and $230 price target. Following a "turbulent" few years, Facebook has emerged well positioned, Olson said. Further, with its increased spend now easing, along with evidence that neither users nor advertisers have abandoned Facebook properties, investors have taken a more optimistic view of the shares, added the analyst. Olson believes there will continue to be periodic negative news flow, but he thinks the Street expects this to be the case.
Olson also initiated coverage of Alphabet (GOOG) with an Overweight rating and $1,500 price target. The company will continue to benefit from tailwinds of the shift in ad dollars from offline-to-online, Olson said. Alphabet is also positioned to benefit from various long-term "options for growth" that are currently less material to revenue, like Waymo, Google Cloud Platform and Verily, added the analyst.
Netflix
-3.6 (-1.16%)
Roku
+7.68 (+5.65%)
Tesla
+0.71 (+0.21%)
Beyond Meat
-3.08 (-3.89%)
Boston Beer
+6.725 (+1.81%)
Ticker changed to META
-3.73 (-1.87%)
Alphabet
-7.98 (-0.62%)