Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'NO OPEN 2020': Wells Fargo analyst Timothy Conder believes each of his covered theme park operators are now well positioned for a "No Open 2020" season scenario post recent capital raises, but admits the recovery trajectory to 2019 level metrics will be gradual through 2022, some 2023.
In a research note to investors, the analyst upgraded Six Flags (SIX) to Equal Weight from Underweight with a price target of $16, down from $30, as he believes downside concerns are appropriately discounted. His outlook and Six Flags' need for higher operating expense reinvestment lead him to believe shares are generally balanced at current levels.
Additionally, Conder downgraded Cedar Fair (FUN) to Equal Weight from Overweight with a price target of $30, down from $60. The analyst feels Cedar Fair remains "best in class" among his covered theme park names, but his $30 price target appears to fairly discount investors view of it as a premier operator and recovery prospects at 9.0-times to his 2022 adjusted EBITDA of $493M or $8.56/unit, discounted at 10%.
SELL SQUARE: Compass Point analyst Michael Del Grosso downgraded Square (SQ) to Sell from Neutral with an unchanged price target of $50. Given the current environment, the analyst expects "continued material headwinds" to Square's total payment volume and revenue given its "significant exposure" to small businesses, in particular the "hard-hit" food services and retail industries. Current Street estimates do not adequately take into account the "precipitous decline that should be expected in the current environment," Del Grosso contended. The analyst also anticipates a 46% consolidated decline in TPV in the second quarter, whereas current Street estimates forecast a 17% year-over-year decline. Moreover, Del Grosso sees a "significant disconnect with reality" since most major cities have yet to reopen their economies and do not plan on doing so for at least the next several weeks.
STAY-AT-HOME ENTHUSIASM PRICED IN: Guggenheim analyst Michael Morris downgraded Roku (ROKU) to Neutral from Buy with an unchanged price target of $120. With investor sentiment on Roku having strengthened in recent weeks, he sees enthusiasm about the "stay-at-home" environment being priced into the stock. As lockdown orders begin expiring, Morris expects incremental investor interest in ideas that have underperformed to date, and he sees risk to Roku advertising revenue relative to investors' elevated expectations.
MOVING TO THE SIDELINES: Piper Sandler analyst Adam Maeder downgraded Intuitive Surgical (ISRG) to Neutral from Overweight with a price target of $510, down from $570. While the analyst expected a "transitory material headwind" from COVID-19, following a deeper analysis, he believes a recovery of the capital equipment spending environment will likely take longer than previously expected. Additionally, Intuitive Surgical shares have held in well since the COVID-19 outbreak, Maeder told investors in a research note. Given the stock's current valuation relative to its peers and the near-to-medium-term pressure likely on the capital front, he expects Intuitive shares to be range-bound over the next 12 months.
BUY IMAX: Benchmark analyst Eric Wold upgraded Imax (IMAX) to Buy from Hold with a $14 price target. He is encouraged to see Imax's key exhibitor partners taking measures to enhance liquidity, showing a commitment toward new China theater builds and taking steps to gradually reopen U.S. theaters in U.S. Further, he suspects movie-goers will return to the cinema over the long-term, and believes Imax can reduce monthly cash burn enough that its liquidity will allow it to make it through fiscal year 2021.
Six Flags
+1.57 (+8.88%)
Cedar Fair
+1.83 (+6.16%)
Block
+1.16 (+1.82%)
Roku
-3.6 (-2.80%)
Intuitive Surgical
-1.58 (-0.31%)
Imax
+0.87 (+7.87%)