Check out today's top analyst calls from around Wall Street, compiled by The Fly.
TESLA TARGETS RAISED BY ANALYSTS WITHOUT BUY RATINGS: Morgan Stanley analyst Adam Jonas raised his price target on Tesla (TSLA) shares to $500 from $360. He also raised his "bull case" price to $1,200 from $650 to reflect a scenario where the company achieves 4 million units of auto volume by 2030 with a 12% operating margin. This compares to his base case scenario, wherein Tesla achieves 2.2 million units and a 10% operating margin by 2030, Jonas noted. The analyst, who believes investors should expect "a very challenging" first quarter, said his "bull case" is based on "aggressive unit volume outcomes that may push the limits of both demand and capacity to supply." Jonas reiterates his Underweight rating on Tesla shares.
Bernstein analyst Toni Sacconaghi said he has been grappling with how to think about valuation for Tesla as the stock has tripled over the last 4 months and doubled in the last 3 weeks, like many others. While Tesla's share price implies that the company will become equal to bigger in size and more profitable than VW (VWAGY) over time, Tesla "is the ultimate 'possibility' stock" and it can be argued that the stock is "not unprecedentedly expensive," said Sacconaghi. One such precedent for Tesla's meteoric appreciation "is Tesla itself in 2013, and notably its stock did not collapse falling its huge appreciation," added the analyst, who raised his price target on Tesla shares to $730 from $325 and keeps a Market Perform rating on the stock.
APPLE WARNING VIEWED AS BUYING OPPORTUNITY: Piper Sandler analyst Michael Olson lowered his estimates for Apple's (AAPL) March quarter, but left estimates for all other future periods unchanged, after the company announced that it does not expect to meet quarterly revenue guidance due to the ongoing impact of the coronavirus. Any material weakness in Apple shares as a result of the revenue shortfall will prove to be a buying opportunity, as, in all likelihood, this is a temporary situation that will leave future quarters largely unaffected, Olson tells investors. In fact, the iPhone supply constraints in the current quarter could result in pent-up demand for future quarters, the analyst adds. Looking at the remainder of Apple's fiscal 2020, Olson believes current iPhone demand outside of China appears to be strong and that its non-iPhone business remains solid while anticipation is growing for 5G iPhones. The analyst keeps an Overweight rating on Apple with a $343 price target.
JPMorgan analyst Samik Chatterjee moderated his near-term iPhone volume estimates after Apple preannounced that its March quarter revenue would miss expectations due to continuing challenges stemming from the coronavirus outbreak on both domestic demand and global supply. However, the analyst expects most long-term investors in Apple shares to look past these "temporary headwinds" as the company's long-term outlook is unchanged. Both Apple's products and services are continuing to demonstrate strong underlying consumer demand, Chatterjee tells investors in a research note. He reiterates an Overweight rating on the shares with a $350 price target.
Meanwhile, Morgan Stanley analyst Katy Huberty adjusted her near-term estimates to reflect a revenue shift from March into the Juneand September quarters, but noted that her full-year estimates remain largely unchanged. Given that June is typically Apple's weakest revenue quarter, she thinks Apple likely will be able to rebuild iPhone channel inventory to normal levels and fully recapture the $7.5B revenue reduction to her March quarter estimates largely in the June quarter, with the balance recognized in the September quarter. Prior Apple guidance, and her estimates, already accounted for a meaningful demand shortfall in China during the March quarter, added Huberty, who keeps an Overweight rating and unchanged $368 price target on Apple shares.
CITI SAYS BUY AMARIN AFTER PULLBACK: Citi analyst Joel Beatty upgraded Amarin (AMRN) to Buy from Neutral with a price target of $24, down from $27. The shares closed Friday down 7c to $17.62. With the stock trading 27% lower since November, now is an attractive time to buy, Beatty tells investors in a research note. The analyst still believes Vascepa sales will "accelerate strongly" over the next couple years. Further, Amarin will likely emerge from the ongoing intellectual property litigation with Vascepa exclusivity largely intact, contends Beatty.
CENTURYLINK CUT TO SELL: MoffettNathanson analyst Nick Del Deo downgraded CenturyLink (CTL) to Sell from Neutral with an unchanged price target of $10. The company faces declining consolidated revenue driven by legacy products churning off and competition, "paired with meaningful fixed costs and substantial financial leverage," Del Deo tells investors in a research note. Further, "outsized" expense reductions are getting harder for CenturyLink to sustain now that synergies from the Level 3 transaction have largely been realized, adds the analyst. He believes CenturyLink's market-implied multiple "embeds expectations that appear much more optimistic than warranted." Del Deo believes a Sell rating better aligns with the company's fundamentals.
COWEN DOWNGRADES AMERICAN EAGLE: Cowen analyst Oliver Chen downgraded American Eagle (AEO) to Market Perform from Outperform with a price target of $14, down from $15. The analyst sees downside risk to the company's sales, traffic, and promotions. American Eagle's apparel assortment is now a work in progress given execution issues in tops, Chen tells investors in a research note. Further, the analyst believes traffic pressure at lower productivity stores may be a risk given Macy's (M) closures and American Eagle's "relatively saturated" 945 store base. Chen says that while tariff risk has waned, he's concerned around American Eagle's ability to drive sustainable traffic without sacrificing merchandise margin, especially in the face of tops' underperformance and general mall traffic headwinds.
Tesla
+52.93 (+6.62%)
Apple
-7.45 (-2.29%)
Amarin
+0.39 (+2.21%)
CenturyLink
-0.65 (-4.68%)
American Eagle
-0.17 (-1.15%)
Macy's
-0.04 (-0.24%)