Check out today's top analyst calls from around Wall Street, compiled by The Fly.
DISNEY RATING CHANGES: Atlantic Equities analyst Hamilton Faber upgraded Disney (DIS) to Overweight from Neutral with a price target of $119, down from $153. While he has "materially cut" his estimates as he assumes the parks shutdown persists for the rest of the fiscal year, underlying advertising declines 10% going forward and cord cutting increases from the June quarter onward due to a lack of fresh content, Faber also contended that the stock's slide has been overdone with Disney shares down around 35% since the start of the coronavirus crisis.
Meanwhile, Guggenheim analyst Michael Morris downgraded Disney to Neutral from Buy with a price target of $100, down from $160. The analyst argued that Disney has been "particularly hard hit by the pandemic" across virtually every segment of the company, and lowered his revenue and operating profit estimates across all segments. Morris also anticipates advertising pressure at media networks and lost profits due to the suspension of both feature film production and theatrical releases, adding that the impact of sports postponements is "unclear," given both the postpone versus cancel decisions and contractual terms.
BUY FOX: Guggenheim analyst Michael Morris also upgraded Fox Corp. (FOXA) to Buy from Neutral with a price target of $29, down from $40, on the view that Fox is best positioned among peers in "a weaker, but ultimately stable consumer environment." He highlighted the company's exposure to live news and late-season sports content, like the NFL and post-season baseball, as "relatively attractive," although Morris also estimates that about 43% of the company's fiscal year 2020 revenue is from advertising, calling that out as an immediate risk.
MOVING TO THE SIDELINES ON LYFT: Daiwa analyst Jairam Nathan downgraded Lyft (LYFT) to Neutral from Outperform with a price target of $28, down from $55, citing risks from an extended shutdown and a more intense competitive environment when a resumption occurs. Nathan also lowered his 2020 EBITDA loss estimate to $1B from $500M, while assuming a slower rebound in 2021 and a push out of break-even to second half 2022 from second half 2021 prior.
BANK OF AMERICA UPGRADE, GOLDMAN DOWNGRADE: DA Davidson analyst David Konrad upgraded Bank of America (BAC) to Buy from Neutral with a lower price target of $24, down from $36. The analyst noted that the stock now trades below forward tangible book value, even though the company has been a leader in de-risking its balance sheet since 2008, particularly in its mortgages and credit card debt holdings. While he anticipates a 10% decline in Bank of America's net interest income in 2020, Konrad believes that upside may exist given that LIBOR and mortgage rates have been much less severe than Fed Funds and treasury rates.
Additionally, the analyst downgraded Goldman Sachs (GS) to Neutral from Buy with a price target of $165, down from $310. The analyst pointed out that the environment of widening credit spreads, lower valuations and de-leveraging from hedge funds is not one in which the company typically thrives. Konrad added that while shares appear cheap at 77% of tangible book value, Goldman Sachs' 2020 ROE may fall to mid-single digits due to "potential valuation marks and lower IB revenues."
'STRATEGIC GROWTH PILLAR': MKM Partners analyst Eric Handler upgraded Activision Blizzard (ATVI) to Buy from Neutral with a price target of $72, up from $64. The analyst is positive on the management's efforts to improve its near-term and long-term growth profile, stating that its "strategic growth pillar" strategy around delivering a consistent cadence of major new content releases, improving live operations capabilities, extending console and PC franchises to mobile, and adding new engagement models to franchises has been well executed. With better than expected launches of major content releases, Handler also raised his fiscal year 2020 and fiscal year 2021 earnings per share forecasts for Activision Blizzard to $2.55 from $2.44 and to $2.80 from $2.60, respectively.
Disney
+0.5 (+0.53%)
Fox Corp.
+0.89 (+3.98%)
Lyft
-0.33 (-1.40%)
Bank of America
+0.105 (+0.53%)
Goldman Sachs
-0.79 (-0.54%)
acquired by MSFT
+1.22 (+2.12%)