Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BUY MODERNA: Argus analyst John Eade initiated coverage of Moderna (MRNA) with a Buy rating and $80 price target. The analyst noted that the company is among the five companies selected to develop a COVID-19 vaccine under U.S. government's 'Operation Warp Speed' program, though its lack of profitability and "no guarantee" that its candidate will reach the market also makes the stock appropriate only for risk-tolerant investors. Eade is still positive on Moderna's "innovative approach to vaccine development" based on the use of messenger RNA.
EXPANDING PAYMENTS ECOSYSTEM: JMP Securities analyst David Scharf started coverage of PayPal (PYPL) with an Outperform rating and $195 price target, and Square (SQ) with a Market Perform as part of a broader research note on Consumer Finance and Technology. The analyst cited benefits from an "expanding payments ecosystem,” which is seeing merchant processing evolving to include personal lending, small business lending, money transfer, B2B payments, loyalty services, and credit analytics.
Paypal's two-sided network, merchant ecosystem, and international opportunities offer "the strongest platform for investors" to leverage the growth in digital and mobile commerce, Scharf contended. While he acknowledged that Square offers a disruptive business model, the expansion of its consumer payments offerings, and "industry-leading" growth, Scharf said he prefers a neutral stance on the stock given its "fair" valuation of 90-times and 60-times expected fiscal year 2021 and fiscal year 2022 EBITDA respectively.
MORE MODEST STREAMING MUSIC GROWTH: Citi analyst Jason Bazinet initiated coverage of Spotify (SPOT) with a Neutral rating and $270 price target as all metrics suggest streaming music growth will continue, but at a more modest pace. If streaming subscription growth slows, labels will likely extract more from distributors, the analyst added. Overall, Bazinet believes shares of Spotify do not offer a compelling risk/reward profile at current levels.
The analyst also started Warner Music Group (WMG) with a Neutral rating and $33 price target and Tencent Music (TME) with a Buy rating and $18 price target. The analyst is positive on Tencent’s shares given the company's "widespread user penetration" integrating with the social graph of Tencent, "nascent" growth in the paying ratio and rising spending power of young millenniums, and "user stickiness" from engagement between artists and fans.
MOVING TO THE SIDELINES: BMO Capital analyst Matthew Luchini downgraded Intercept (ICPT) to Market Perform from Outperform with a price target of $52, down from $107, after the Food and Drug Administration’s Complete Response Letter in the company Ocaliva filing for NASH. The analyst called the CRL "surprising," noting that its focus on efficacy delays Ocaliva's regulatory timeline and also increases the risk for approvability despite the drug's success in Phase 3 trial. Luchini maintained that he still expects an approval, but his updated target reflects a lower probability-of-success as well as a delay in launch.
Baird analyst Brian Skorney also downgraded Intercept to Neutral from Outperform with a price target of $52, down from $227. The analyst told investors that the FDA decision was a surprise in light of the agency's draft decision, which said there were approvable endpoints in NASH that were likely to predict clinical benefit to support accelerated approval.
Meanwhile, Credit Suisse analyst Tiago Fauth downgraded Intercept to Neutral from Outperform with a price target of $59, down from $137, after the FDA issued a CRL for obeticholic acid in NASH. The analyst thinks the stock will reflect the expectation for extended timelines and reduced M&A prospects in the near-term. His peer at UBS also cut his rating for Intercept to Neutral from Buy with a price target of $57, down from $135. Analyst Navin Jacob added that he is unsure as to what data Intercept can show that would change the FDA's decision. If no clear path exists prior to outcomes readout, the company is likely to terminate the study to preserve cash, Jacob contended.
BUY CLOROX: DA Davidson analyst Linda Bolton Weiser initiated coverage of Clorox (CLX) with a Buy rating and a $256 price target. The stock's outperformance can continue with indications of a heightened awareness of the role of disinfecting in public health lasting for longer period than in prior global health crises, the analyst told investors in a research note of her own. Bolton Weiser further stated that two-thirds of the Clorox cleaning business - about 34% of sales - is comprised of disinfecting products, including cleaners and wipes, bleach and laundry products, and B-to-B professional products. The company's Glad brand's charcoal and food products are also benefiting from increased at-home cooking, the analyst added.
Moderna
+0.99 (+1.59%)
PayPal
+1.89 (+1.12%)
Block
+0.34 (+0.33%)
Spotify
-1.59 (-0.60%)
Warner Music
+0.035 (+0.11%)
Tencent Music
+0.575 (+4.34%)
Intercept
-0.97 (-2.08%)
Clorox
+3.01 (+1.38%)