Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'SIGNIFICANT' OPPORTUNITIES: Mizuho analyst James Lee upgraded JD.com (JD) to Buy from Neutral with a price target of $58, up from $37. The analyst sees "significant opportunities" for the company in online pharmacy and the pull-forward effects in essentials from COVID-19. The total addressable market for both segments is substantial but with a low online penetration, Lee contended. He sees JD.com as well positioned due to its "reliable" first-party e-commerce and end-to-end logistics capability.
'ELONGATED' INDUSTRY RECOVERY: Wells Fargo analyst Timothy Conder downgraded Norwegian Cruise Line (NCLH) to Equal Weight from Overweight with a price target of $14, down from $70. Following last week's capital raise, Norwegian is well positioned through 2021 to endure what will likely be a "volatile elongated industry recovery" that will keep cruise equities in broad trading ranges, Conder told investors in a research note. While he acknowledged that share downside is limited with its valuation at a 25% discount to the low end of historical averages, he believes there is heightened risk of a second COVID-19 wave in the fall or winter which could impact demand as the industry tries to restart.
The uncertain trajectory of when cruising will restart, degree of secondary COVID-19 waves over the next 12-18 months, consumer demand recovery, and competitive actions within the industry will produce share price volatility within a broad trading range, Condor contended. With that said and despite the downgrade, the analyst believes Norwegian Cruise Line is positioned favorably relative to some competitors.
ALLEGIANT UPGRADED, SPIRIT DOWNGRADED: Raymond James analyst Savanthi Syth upgraded Allegiant Travel (ALGT) to Outperform from Market Perform with a $115 price target. Allegiant is refocusing on its airline roots, completely halting non-airline projects, in order to conserve cash and help reduce the need to tap debt/equity markets, Syth noted. The analyst thinks Allegiant's founding roots of opportunistically buying mid-life, out-of-favor aircraft/parts makes it well-suited to seize on likely dislocations in aircraft assets to grow in a capital-"lighter" fashion.
Meanwhile, Syth downgraded Spirit Airlines (SAVE) to Market Perform from Outperform without a price target. While the analyst continues to believe Spirit is well positioned given its domestic and leisure traffic focus and low-cost structure, he sees more compelling risk-reward elsewhere, particularly at Allegiant.
SELL CHEESECAKE: Stephens analyst James Rutherford downgraded Cheesecake Factory (CAKE) to Underweight from Equal Weight with a price target of $14 after assuming coverage of the stock. His review of the company's 206 U.S. locations finds that 65% of units are in traditional regional or super-regional malls where there is significant overlap with major department stores and movie theaters "facing an existential crisis." Rutherford, who argues that the recovery from COVID-19 will not be uniform across casual dining chains, believes that "the long-term fate of Cheesecake is inseparable from the regional mall."
COVID TAILWINDS THROW 'A LIFELINE': Wells Fargo analyst Edward Kelly upgraded United Natural Foods (UNFI) to Equal Weight from Underweight with a price target of $16, up from $5. The company preannounced meaningfully better than expected fiscal third quarter results "as COVID-related tailwinds look to have thrown the previously struggling company a lifeline," Kelly told investors in a research note. COVID-19 demand drove an "impressive step change" in results, and food at home sales will remain elevated well into 2021, turning around the intermediate-term narrative on United Natural shares, the analyst said.
JD.com
+1.425 (+3.03%)
Norwegian Cruise Line
-0.44 (-3.97%)
Allegiant Travel
+4.01 (+5.47%)
Spirit Airlines
-0.43 (-4.55%)
Cheesecake Factory
-0.68 (-3.52%)
United Natural Foods
+5.16 (+33.20%)