Check out today's top analyst calls from around Wall Street, compiled by The Fly.
RISING 5G RISKS: Morgan Stanley analyst Simon Flannery downgraded AT&T (T) to Equal Weight from Overweight with a price target of $34, down from $36. The analyst expects a "robust" 5G smartphone upgrade cycle in 2021 to create risks for AT&T given that as consumers look to buy new 5G iPhones from Apple (AAPL) he would expect the switcher pool to increase. While AT&T does have nationwide coverage with low band 5G, it will not be able to match the speeds of T-Mobile's (TMUS) mid-band network for "a number of years," Flannery said. He is also increasingly concerned that the C-Band spectrum auction will be more expensive than expected, which creates strategic and financial risk for AT&T.
BUY YUM!, RESTAURANT BRANDS: Wells Fargo analyst Jon Tower upgraded Yum! Brands (YUM) and Restaurant Brands (QSR) to Overweight from Equal Weight with price targets of $125 and $74, up from $109 and $60, respectively. Coming out of a year unlike any other in modern history for the restaurant industry, chains should benefit from pent-up demand and a consumer "who is flush with cash to spend," Tower told investors in a research note. The analyst thinks this dynamic sets up well for the casual dining space. He adjusted his Restaurant recommendations to reflect this optimism.
The analyst also
KEYBANC PREFERS CARVANA TO VROOM: KeyBanc analyst Edward Yruma initiated coverage of Carvana (CVNA) with an Overweight rating and $300 price target, and Vroom (VRM) with a Sector Weight rating. The analyst believes digital used auto retail has some of the "strongest long-term secular tailwinds" in his coverage. Low gross margin and inventory complexity have been a hindrance to faster adoption, but new operating models have obviated many of the issues, Yruma told investors in a research note. The analyst is constructive on the digital used auto retail industry, but prefers Carvana to Vroom given its largely in-sourced business process and scale advantages.
MOVING TO THE SIDELINES: Morgan Stanley analyst Ricky Goldwasser downgraded Quest Diagnostics (DGX) to Equal Weight from Overweight with a price target of $130, down from $146. She noted Quest raised its fourth quarter guidance on December 15, but Goldwasser still thinks street estimates for 2021 are too low as the market is underestimating the near-term benefit from PCR testing. Nonetheless, she expects earnings to decelerate in 2022 and thinks Quest shares are likely to underperform given that fact.
ABILITY TO RAMP PRODUCTION: Barclays analyst Brian Johnson raised the firm's price target on Tesla (TSLA) to $230 from $125, while keeping an Underweight rating on the shares. With over $12B of capital raised this year, Tesla has the ability to ramp production and use price to sell cars, Johnson told investors in a research note. Accordingly, the analyst increased production and sales estimates. However, he does not forecast the inflection in earnings "that at least some bulls hope for." Nonetheless, the additional capital "takes away much of the downside risk" to Tesla shares, Johnson added.
AT&T
-0.52 (-1.72%)
T-Mobile
+0.42 (+0.32%)
Apple
+0.92 (+0.72%)
Yum! Brands
+0.91 (+0.85%)
Restaurant Brands
+0.12 (+0.19%)
Darden
-0.16 (-0.14%)
BJ's Restaurants
+1.57 (+4.56%)
Red Robin
-0.66 (-3.36%)
Dave & Buster's
-0.04 (-0.15%)
Cracker Barrel
-1.53 (-1.12%)
Carvana
+2.67 (+1.02%)
Vroom
-0.37 (-0.93%)
Quest Diagnostics
-1.19 (-0.98%)
Tesla
+7.62 (+1.22%)