Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BOFA/MERRILL DOUBLE UPGRADES SKYWORKS, QORVO: BofA/Merrill analyst Vivek Arya double-upgraded Skyworks (SWKS) and Qorvo (QRVO) to Buy from Underperform, also raising his price targets on the chipmakers' stocks to $122 from $92 and $130 from $80, respectively. The analyst cited the unfolding opportunity of 5G technology, calling its adoption "one of the more compelling and investable themes in semis" that will drive an "exponential" growth in components required in the upgrade. Arya further sees the companies' radio frequency chips as a "critical enabling technology" to monetize spectrum and boost the handset battery life, adding that these stocks have also lagged the PHLX Semiconductor Sector Index (SOX) since 2015.
SUNTRUST UPGRADES KRATON, DOW INC: SunTrust analyst James Sheehan upgraded Kraton (KRA) to Buy from Hold with a price target of $31, up from $24, and also upgraded Dow Inc (DOW) to Buy from Hold with a price target of $59, up from $52, as part of his broader research note previewing the Chemicals sector in 2020. For Kraton, the analyst noted that the proceeds of its sale of Cariflex will go toward its debt reduction, removing a key overhang on the stock. Sheehan also cited improvement in the company's macro environment after 2019 headwinds around adverse U.S. weather, inventory destocking, and global demand weakness. For Dow Inc, the analyst cited its low margin level in the company's chemicals value chains limiting the downside, with added potential earnings contributions coming from its $250M of new capacity investments.
CITI CUTS 3M TO NEUTRAL: Citi analyst Andrew Kaplowitz downgraded 3M (MMM) to Neutral from Buy with an unchanged price target of $180. With industrial production having peaked in December 2018, the "industrial cycle" is in the midst of a mild downturn that could stabilize, Kaplowitz told investors in a research note. In the interim, however, the analyst expects "choppiness" amongst end markets as the cycle bottoms. De-stocking in shorter cycle markets is well underway and could end over the next few quarters, while certain longer-cycle markets remain healthy having largely bypassed the downturn, contended the analyst. He believes stock selectivity is key and prefers companies with a "combination of self-help runway and exposure to resilient long-cycle and/or 'secular' growth end markets." As such, Kaplowitz also upgraded Fortive (FTV) to Buy and downgraded 3M to Neutral.
CITI DOWNGRADES CHEVRON TO NEUTRAL: Citi analyst Alastair Syme downgraded Chevron (CVX) to Neutral from Buy with a price target of $120, down from $135. Chevron has emerged as a "relative safe haven" for energy investors given its balance sheet strength and clear capital allocation, Syme told investors in a research note. However, the "safe-haven status might now be overplayed," contended the analyst. He noted that 2019 has seen Chevron's returns have fallen as much as most of its Integrated Oils peers.
GOLDMAN SACHS SAYS SELL MACY'S: Goldman Sachs analyst Alexandra Walvis downgraded Macy's (M) to Sell from Neutral with a price target of $12, down from $17. The analyst, while acknowledging the stock's year-to-date underperformance and "already weak sentiment" following the recent deterioration in fundamentals, sees "significant additional downside" to Macy's retail operations. This will offset upside from the company's store segmentation and cost savings initiatives, Walvis told investors in a research note. The analyst thinks consensus estimates continue to underestimate negative operating leverage for the retailer.
PHLX Semiconductor Sector Index
+ (+0.00%)
Qorvo
+3.31 (+3.10%)
Skyworks
+2.55 (+2.51%)
Kraton
+0.89 (+3.86%)
Dow Inc.
+0.07 (+0.13%)
3M
-0.97 (-0.57%)
Fortive
+1.71 (+2.35%)
Macy's
+0.21 (+1.39%)
Chevron
-0.35 (-0.30%)