Check out today's top analyst calls from around Wall Street, compiled by The Fly.
STORES OFFER LIMITED GROWTH: MKM Partners analyst Bill Kirk initiated coverage of Walmart (WMT) with a Neutral rating and $147 price target. The company's physical stores offer limited growth as food inflation is not as reliable as it has been historically, the analyst contended, adding that he also expects a large remodeling/price investment announcement from Walmart in the next 12 months. Kirk further stated that he would need signs that both the physical stores and digital offerings could sustainably grow simultaneously to get more comfortable with the valuation on Walmart shares.
SELL TARGET: MKM Partners analyst Bill Kirk initiated coverage of Target (TGT) with a Sell rating and $105 price target. While the analyst acknowledges that the company has an opportunity to monetize a growing digital audience, he is concerned with its deteriorating customer satisfaction as seen in Yelp! scores, the heavy overlap with Walmart, an aging store-fleet, and foot traffic under-performance related to COVID-19 disruption.
Additionally, Kirk started coverage of
RISK/REWARD SKEWED TO THE DOWNSIDE: Citi analyst Paul Lejuez downgraded L Brands (LB) to Sell from Neutral with a price target of $17, up from $15. The analyst noted that after the company reported better than expected second quarter sales, the shares traded up 35% to $25.88. However, he believes near-term strength at Bath & Body Works is driven by pent up demand and is being "incorrectly extrapolated by the market into future periods." COVID-19 does not improve Bath & Body's long-term earnings power, and a shift toward e-commerce is not good for margins, Lejuez contended. As such, the analyst believes L Brands' risk/reward is skewed to the downside.
Lejuez also upgraded American Eagle Outfitters (AEO) to Buy from Neutral with a price target of $14, up from $12. The success and opportunity at Aerie are "too significant to overlook," he contended, adding that Aerie has been and will continue to be a share winner in the intimates/loungewear category. Furthermore, the analyst believes that with Victoria's Secret closing 250 stores, Aerie is poised to accelerate its market share gains.
5G STRUCTURAL GROWTH: Oppenheimer analyst Rick Schafer upgraded Qorvo (QRVO) to Outperform from Perform with a $150 price target. The analyst believes the company is "ideally positioned" to capitalize on "5G structural growth." He also pointed out that Qorvo posted "significant beat/raise" results, topping Street sales expectations.
BUSINESS 'TURNING THE CORNER': Evercore ISI analyst Robert Ottenstein upgraded AB InBev (BUD) to Outperform from In Line with a $75 price target following the company's second quarter report, which he sees as evidence that "the business is decisively turning the corner." ABI showed "meaningful" beer volume growth in Brazil, grew the top and bottom line in the U.S., and had its highest ever monthly sales in China June, Ottenstein noted. Further recovery "won't be a straight line," but he expects the stock to be "meaningfully higher 12 months out."
Walmart
-1.39 (-1.06%)
Target
-0.735 (-0.59%)
Grocery Outlet
-0.015 (-0.03%)
Sprouts Farmers Market
+0.12 (+0.44%)
United Natural Foods
+0.75 (+3.71%)
BJ's Wholesale
-1.3 (-3.12%)
Albertsons
-0.03 (-0.20%)
Costco
-1.12 (-0.34%)
Kroger
-0.31 (-0.88%)
L Brands
-1.53 (-5.91%)
American Eagle
-0.28 (-2.63%)
Qorvo
+9.97 (+8.63%)
AB InBev
+0.49 (+0.86%)