Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'DARK CLOUD': Wedbush analyst Daniel Ives downgraded Nikola (NKLA) to Underperform from Neutral with a price target of $15, down from $45. The analyst still believes the company's electric vehicle and hydrogen fuel cell ambitions are attainable in the semi-truck market, but he has "serious concerns that the execution and timing of these ambitious goals stay on track over the coming years."
The Nikola story changes with Trevor Milton gone from the company, Ives told investors in a research note, adding that execution risks for Nikola are now "significantly heightened." Ives thinks the recent questions surrounding the Nikola story "raised by the bears will be a dark cloud over the stock until answered." In addition, the "eye popping battery innovations" coming out of Tesla (TSLA) "potentially changes the game" with further price parity and "throws a wrench" in Nikola's return on investment story around hydrogen fuel cell vehicles over the long term, Ives contended.
TURNAROUND POTENTIAL: Baird analyst Peter Benedict upgraded Bed Bath & Beyond (BBBY) to Outperform from Neutral with a price target of $20, up from $13. The analyst is "intrigued" by the company's turnaround potential. Bed Bath & Beyond' sales appear to be stabilizing, and channel checks suggest "real change is setting in across the organization," Benedict contended. The analyst believes that going forward, corporate restructuring, planned store optimization and customer-facing initiatives set the stage for a "potentially material" EBITDA recovery over the next few years. With investor skepticism high given the stock's 58% short interest, Benedict feels "it's worth taking a shot" in Bed Bath & Beyond.
STRUCTURAL WINNER DURING RECOVERY: Oppenheimer analyst Jed Kelly upgraded Square (SQ) to Outperform from Perform and set an $185 price target on the stock after re-assuming coverage of the name. Amid the massive shift in digital commerce due to the pandemic, Kelly sees Square's two-sided networks of sellers and consumers positioning it as a structural winner during the recovery. The analyst is bullish on increased Cash App engagement and monetization, Square's "integral part" in digitizing sellers' operations and share gain opportunities at small-to-mid sized businesses during the recovery.
ABOVE-AVERAGE DISCOUNT: Stifel analyst David Ross upgraded FedEx (FDX) to Buy from Hold with a price target of $281, up from $175. The rally in the shares off the lows earlier this year has been warranted as FedEx has shown it is a winner from this pandemic period, Ross told investors in a research note. The analyst also noted that international airfreight capacity remains tight, UPS (UPS) will be more focused on pricing, and the outlook is healthy for parcel demand. Overall, Ross believes FedEx shares are trading at an "above-average discount" to UPS.
MOVING TO THE SIDELINES: Macquarie analyst Chad Beynon downgraded Penn National Gaming (PENN) to Neutral from Outperform with a price target of $66, up from $56, citing valuation, leverage concerns and competition. The company's lease adjusted leverage will still be 5-times at the end of 2022, which could be viewed as problematic in the event of a pandemic second wave or slowed demand, Beynon told investors in a research note. In addition, the upcoming "arms race" between DraftKings (DKNG), FanDuel, FoxBet, Pointsbet, BetMGM and Caesars (CZR) could lead to additional Penn National marketing expenses, not assumed in analysts' models, he added.
The analyst also initiated coverage of DraftKings with an Outperform rating and $65 price target. Given DraftKings' balance sheet and data science expertise, the analyst thinks they are well positioned to acquire and retain important gaming cohorts.
Nikola
-4.01 (-19.00%)
Tesla
-18.79 (-4.94%)
Bed Bath & Beyond
+0.44 (+3.30%)
Block
+1.02 (+0.68%)
FedEx
-0.75 (-0.31%)
UPS
-2.62 (-1.62%)
Penn Entertainment
-5.7 (-8.25%)
DraftKings
-2.35 (-4.69%)
Caesars
-2.17 (-3.96%)