Check out today's top analyst calls from around Wall Street, compiled by The Fly.
LONG-TERM SALES OUTLOOK: Goldman Sachs analyst Mark Delaney upgraded Tesla (TSLA) to Buy from Neutral with a price target of $780, up from $455, in a research note titled "Tesla to Buy on better long-term sales outlook and margin expansion." The analyst sees the shift toward battery electric vehicle adoption accelerating, noting that falling battery prices are improving the economics of EV ownership, and now believes it will occur faster than his previous view. Delaney sees Tesla's integrated model helping it "sustain a leadership position in the EV market." The analyst also sees margins expanding for Tesla, "driven by mix shift toward the Model Y." Additionally, Delaney noted that the "increased mix of software sales should also be a tailwind to margins over time."
SELL STITCH FIX: Wells Fargo analyst Ike Boruchow downgraded Stitch Fix (SFIX) to Underweight from Equal Weight with a price target of $27, up from $18. Shares are up roughly 60% year-to-date, and Boruchow believes the stock has run too far, resulting in an asymmetric risk/reward that is skewed to the downside. The analyst also sees some fundamental issues with Stitch Fix's model, and while he expects revenues to accelerate in the coming quarters as it recovers from the impacts of the pandemic, thinks this is more than reflected in the share price.
'DISAPPOINTING' QUARTER: Several Wall Street analysts downgraded Splunk (SPLK) to Neutral-equivalent ratings on Thursday.
BTIG analyst Gray Powell downgraded Splunk to Neutral from Buy, saying the company's third quarter results were "disappointing" and its guidance for the fourth quarter was below expectations as the management cited delays in large deal closures at the end of the quarter. Powell added that Splunk's pulled long-term ARR targets calling for 40% average growth through 2024 was also a "big disappointment" following its October analyst day, where the management made those "bullish" medium term projections.
DA Davidson analyst Andrew Nowinski also downgraded Splunk to Neutral from Buy with a price target of $177, down from $250, after its worse than expected third quarter results. The analyst noted that the company missed revenue guidance for the third consecutive quarter, and while his checks suggest that demand has improved, the management attributed the miss to seven large deals that slipped out of the third quarter. Nowinski further stated that the lack of visibility implied by Splunk's pulled medium term guidance warrants a move to the sidelines on Splunk shares.
Voicing a similar opinion, Mizuho analyst Gregg Moskowitz downgraded Splunk to Neutral from Buy with a price target of $180, down from $235. The company posted a "very disappointing" with lower than expected bookings and annual recurring revenue as several very large deals slipped, Moskowitz told investors in a research note. The company also withdrew fiscal 2023 guidance, "which had been a major support beam for the stock," the analyst added. Moskowitz is concerned that the results could point to deeper execution issues that could take some time to resolve.
Meanwhile, Stifel analyst Brad Reback cut Splunk's rating to Hold from Buy with a price target of $160, down from $227, following the company's "very disappointing" third quarter report. The magnitude of the company's miss, and its long-term implications, is "especially surprising on the heels of a confident analyst day management held 11 days before quarter end," Reback contended. While he continues to believe there is a large opportunity in front of the company, it is clear that near-term visibility is quite low.
MOVING TO SIDELINES: UBS analyst Paul Gong downgraded Xpeng (XPEV) to Neutral from Buy with a price target of $59, up from $25. While he believes the company continues to lead in China's autonomous driving development race, after an over 200% rally in the stock he believes "investors more or less already recognize this," Gong said. Even though peers such as NIO (NIO), Geely and Great Wall are working toward autonomous driving, he believes Xpeng maintains its lead in this race.
BUY TYSON FOODS: Piper Sandler analyst Michael Lavery upgraded Tyson Foods (TSN) to Overweight from Neutral with a price target of $77, up from $70. A COVID-19 vaccine and economic "reopening" will benefit Tyson in ways that are not yet priced into the company's valuation, Lavery told investors in a research note. The analyst expects foodservice demand to improve while food at home consumption "remains somewhat elevated." Further, alleviation of costs and a recovery in chicken can help lift margins in fiscal 2022, Lavery added.
Tesla
+23.84 (+4.19%)
Stitch Fix
-0.82 (-2.08%)
Bought by CSCO
-52.79 (-25.63%)
XPeng
+0.02 (+0.04%)
Nio
-0.97 (-2.02%)
Tyson Foods
+1.45 (+2.19%)