Check out today's top analyst calls from around Wall Street, compiled by The Fly.
EARNINGS MOMENTUM: New Street analyst Pierre Ferragu upgraded Tesla (TSLA) to Buy from Neutral with a $900 price target. He sees "more and more tangible indications" that Tesla has ample room to grow deliveries in the next two years and his forecast implies Tesla could deliver $12 of earnings per share in 2023, which Ferragu noted is more than 50% over current consensus expectations. With its Berlin and Texas factories ramping, Tesla should reach 2M unit capacity by the end of 2022 and quadruple deliveries in three years, the analyst estimates. In addition, he sees the acceleration of EV deliveries in Europe as centered on the low end and thinks in the premium segment, "Tesla remains unapproached."
BUY HOME DEPOT, SELL BEST BUY: Citi analyst Steven Zaccone initiated coverage of Home Depot (HD) and Lowe's (LOW) with Buy ratings and price targets of $288 and $195, respectively. The analyst believes the strong housing market and consumer backdrop outweigh the threat of rising interest rates, and highlights Home Depot's "increasingly steady" operating expense leverage. Regarding Lowe's, Zaccone thinks the company is a "near-term winner" from stimulus, with long-term share gains and margin expansion that are "very compelling."
More bearish on Best Buy (BBY), the analyst started coverage of the stock with a Sell rating and $86 price target. Zaccone pointed out that Best Buy has benefited from stimulus-fueled purchases and work/educate from home demand during the pandemic. Once the next round of stimulus passes, the analyst sees "too many red flags for the model over the near-to-medium term." Best Buy lacks pricing power in an already competitive industry, and lapping one-time stimulus fueled demand makes for a challenging comparison in a "re-opened" environment, he added.
The analyst also launched coverage of other U.S. hardlines retail with Buys on Floor & Decor (FND), AutoZone (AZO), Advance Auto Parts (AAP), and RH (RH), Neutrals on O'Reilly Automotive (ORLY), Tractor Supply (TSCO), Chewy (CHWY) and Williams-Sonoma (WSM).
MOVING TO THE SIDELINES: Deutsche Bank analyst Kunal Madhukar downgraded Stitch Fix (SFIX) to Hold from Buy with an unchanged price target of $54 following Monday's sales miss and guide down. The analyst sees potential near-term headwinds associated with macro trends and slower growth in revenue per client resulting from supply chain and cycle time challenges. Further, the delay in rolling out Direct Buy to non-subscribers negatively impacts the company's ability to outpace expectations, Madhukar told investors in a research note.
BUY TWILIO: Jefferies analyst Samad Samana initiated coverage of Twilio (TWLO) with a Buy rating and $415 price target. The analyst noted that the company has been "disrupting" business and individual communication for several years, with the adoption of CPaaS still "remaining nascent" and expected to drive revenue growth of over 30% through 2023. Samana added that Twilio's newer high-margin revenue streams and scale will allow the company to increase its profitability.
SELL LEMONADE: Bank of America analyst Joshua Shanker initiated coverage of Lemonade (LMND) with an Underperform rating and $29 price target. Lemonade, which sells renters' insurance and is starting to expand its footprint into homeowners', pet and term life policies, has given guidance of $372M-378M in premium in-force that "seems aggressive," Shanker noted. He expects the 2021 revenue guidance will be missed given the full-year view requires a rapid acceleration from the first quarter, he added. If Lemonade were to hit its target by ramping marketing spend, the analyst believes such growth would be acquired at a cost "far higher than the lifetime value of the policies/customers."
Tesla
+44.71 (+7.96%)
Home Depot
+4.1 (+1.58%)
Lowe's
+3.29 (+2.02%)
Best Buy
+0.36 (+0.34%)
Floor & Decor
+2.16 (+2.39%)
AutoZone
+0.88 (+0.07%)
Advance Auto Parts
+0.69 (+0.39%)
RH
+22.42 (+5.07%)
O'Reilly Automotive
+2.23 (+0.47%)
Tractor Supply
+1.48 (+0.92%)
Chewy
+2.51 (+3.29%)
Williams-Sonoma
+1.87 (+1.42%)
Stitch Fix
-17.03 (-25.03%)
Twilio
+35.775 (+11.17%)
Lemonade
+1.41 (+1.63%)