Check out today's top analyst calls from around Wall Street, compiled by The Fly.
LULULEMON "PRICING IN PERFECTION": Citi analyst Paul Lejuez downgraded Lululemon Athletica (LULU) to Neutral from Buy with a price target of $400, up from $340. "We have to ask ourselves if we can realistically recommend buying LULU at $400 with a call it can go to at least $460 over the next 12 months," Lejuez tells investors in a research note. The analyst concludes that he "just can't do it" at current valuation levels. Lululemon trades at nine times estimated fiscal 2021 sales and has an enterprise value of $50B, making it the most highly valued specialty retail brand ever, says Lejuez. The analyst, who admits to loving the brand and the company's growth prospects in the near- and long-term, says the stock seems to be "pricing in perfection."
BOFA SEES WAYFAIR MOMENTUM SLOWING: BofA analyst Justin Post downgraded Wayfair (W) to Neutral from Buy with an unchanged price target of $330. He has been impressed by Wayfair's delivery execution and margin expansion during COVID-19, but he now thinks expectations and valuation are high, Post told investors. Meanwhile, the firm's credit and debit card data shows Online Home Furnishings spending decelerated in August while also showing that Brick & Mortar Home Furnishings sales are recovering, Post said.
DOCUSIGN DOWNGRADED AFTER EARNINGS ON VALUATION: Deutsche Bank analyst Taylor McGinnis downgraded DocuSign (DOCU) to Hold from Buy with an unchanged price target of $225. The better than expected Q2 results and DocuSign's optimistic tone reinforce the belief that the company's recent momentum is sustainable, McGinnis told investors in a research note. However, the shares are up 180% "since the initial market crack" and now trade at a 2021 revenue multiple of 26 times, said the analyst. While no growth slowdown in is sight, this is reflected in the current valuation, added McGinnis.
Among other Wall Street analysts reacting to DocuSign's earnings report, Evercore ISI analyst Kirk Materne raised the firm's price target to $250 from $210, stating that while he was expecting a strong quarter, "DocuSign blew by even the most bullish expectations." However, the analyst keeps an In Line rating on the shares as he thinks that a broader market pullback in the coming weeks could create a more interesting entry point. Piper Sandler analyst Rob Owens raised the firm's price target on DocuSign to $235 from $140 and keeps a Neutral rating on the shares, saying there is "nothing to dislike, except for the valuation."
ANALYSTS POSITIVE ON MICHAELS AFTER EARNINGS: Credit Suisse analyst Seth Sigman upgraded Michaels (MIK) to Outperform from Neutral with a price target of $15, up from $13. Michaels is an "attractive self-help story" which should continue to benefit from strong demand trends in its category in the near-term while delivering "significant" productivity improvements over the medium- to longer-term, Sigman said. The analyst believes this potentially supports upside to estimates over the next 12-18 months. Thursday's share selloff provides a buying opportunity, added Sigman.
Meanwhile, JPMorgan analyst Christopher Horvers raised the firm's price target on Michaels to $16 from $14 and reiterates an Overweight rating on the shares. Yesterday's post-earnings selloff was "highly irrational" as Michaels reported results well beyond expectations with same-store-sales up a "truly impressive" 12% despite not having all stores open throughout the quarter, Horvers tells investors.
PELOTON TARGET HIKED TO $109 AHEAD OF EARNINGS: JMP Securities analyst Ronald Josey raised the firm's price target on Peloton (PTON) to $109 from $59 and keeps an Outperform rating on the shares. The analyst is citing the company's strength in instructor engagement, "persistent elevated delivery times" signifying continued demand, and its growing social presence. Josey adds that Peloton's 3 C's - high-quality Content, growing Community, and Convenience - are "redefining" the fitness sector.
Josey's target hike follows JPMorgan analyst Doug Anmuth having raised his own price target on Peloton to $105 from $58 earlier this week. Like his peer, Anmuth keeps an Overweight rating on the shares ahead of the company's fiscal Q4 results on September 10.
Lululemon
-20.58 (-5.16%)
Wayfair
-24.79 (-8.25%)
DocuSign
-22.93 (-8.65%)
Michaels
-1.545 (-13.76%)
Peloton
-8.62 (-9.47%)