Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BOFA MOVING TO SIDELINES ON APPLE: Bank of America analyst Wamsi Mohan downgraded Apple (AAPL) to Neutral from Buy with a price target of $470, up from $420. The analyst argued that the shares have experienced a rapid multiple expansion since June although 2021 estimates have largely been unchanged in that time. With the stock trading at the highest premium to the S&P 500 in 10 years, he is concerned about risks to product gross margin pressure for the 5G iPhones, unit volume risk in case of higher average selling prices, tough comparisons in 2021 and pressure on services margins from content amortization costs.
DISNEY UPPED ON STREAMING STRATEGY: Credit Suisse analyst Douglas Mitchelson upgraded Disney (DIS) to Outperform from Neutral with a price target of $146, up from $116, following the company's fiscal third quarter report. The analyst argued that while COVID-related dynamics are likely to severely impact many of Disney's businesses for some time, he is removing the 20% risk discount he applied to shares given increased visibility. Mitchelson values Disney's streaming business at $68B, saying this is "well supported" by Disney+'s performance, likely growth from the 100M new homes being launched the next few months, and the announcement of an international general entertainment streaming service launching in 2021. With new CEO Bob Chapek now indicating an "innovative and bold" further pivot to streaming, Disney shares should be "even more aggressively positioned as a streaming growth story," Mitchelson contended.
JPMORGAN SAYS BUY NOVAVAX, LADENBURG SAYS SELL: JPMorgan analyst Eric Joseph upgraded Novavax (NVAX) to Overweight from Neutral with a price target of $275, up from $105. The analyst is "pleasantly impressed" by Tuesday’s initial immunogenicity/safety profile for NVX-CoV2373 in the Phase 1 COVID-19 vaccine results. It is "not too far a stretch" to conclude the activity of NVX-CoV2373 "looks best-in-class," particularly when anchored to one of the more "stringent" human convalescent sera cohorts reported to date, Joseph told investors in a research note. On safety, the analyst views the tolerability profile of both doses "as comfortably within the bounds of licensure-eligible candidate." He believes "relative valuations" favor Novavax over the near-term ahead of the first of the competitor Phase 3 COVID-19 vaccine efficacy readouts.
Meanwhile, Ladenburg Thalmann analyst Michael Higgins downgraded Novavax to Sell from Neutral with a $105 price target after the company presented Phase 1 data for its COVID-19 vaccine NVX-CoV2373. The analyst acknowledged that the vaccine induced "robust" immune responses against the spike protein that exceeded convalescent sera levels from patients infected with or recovering from COVID-19 infection. However, the analyst noted that Novavax is one of the last companies in "Operation Warp Speed" to present its initial data and its current valuation overestimates the revenue and net profit opportunity.
MOVING TO THE SIDELINES ON TYSON: Credit Suisse analyst Robert Moskow downgraded Tyson Foods (TSN) to Neutral from Outperform with a price target of $68, down from $75. The analyst expects "another weak year ahead" for the two most important divisions of the company, Chicken and Prepared Foods, due to oversupplied conditions in the chicken industry and weak demand in the foodservice channel. This sets up poorly for contract negotiations with customers beginning in the fall, Moskow told investors in a research note.
The analyst also downgraded Sanderson Farms (SAFM) to Neutral from Outperform with a price target of $100, down from $135.
POSITIVE CHANNEL CHECKS FOR PALO ALTO: BTIG analyst Gray Powell upgraded Palo Alto Networks (PANW) to Buy from Neutral with a $313 price target. The analyst pointed out that his most recent channel checks continue to be positive. He heard that Palo Alto's sales execution on the core firewall side of the business has improved and that demand remained solid through July. The commentary indicates that sales of Prisma Access are gaining momentum, Powell told investors in a research note. Further, the analyst also heard of improved commentary in the U.S. Fed with four large deals closing in late July. He now has a greater degree of confidence in Palo Alto's ability to exceed Street estimates in fiscal fourth quarter and maintain growth in the high teens in the second half of 2020.
Apple
+0.98 (+0.22%)
Disney
+12.25 (+10.43%)
Novavax
+24.52 (+15.60%)
Tyson Foods
-1.2 (-1.84%)
SAFM
+
Palo Alto Networks
+3.875 (+1.52%)