Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'SUBSTANTIAL' GROWTH POTENTIAL: Atlantic Equities analyst Kunaal Malde upgraded Square (SQ) to Overweight from Neutral with a $300 price target. The company's growth prospects "remain substantial" as it continues disrupting consumer and business banking through "strong execution against a digital-first strategy," Malde told investors in a research note. The analyst also argued that Square's Cash App is a leading brand with network effects, innovates quickly and has "multiple monetization levers ahead." Further, Malde believes that the Afterpay acquisition adds incremental growth opportunities for Square in buy now pay later and commerce, and recommends taking advantage of the recent pullback in the stock.
PERMANENT SHIFT TO ALTERNATIVE LODGING: Cowen analyst Kevin Kopelman upgraded Airbnb (ABNB) to Outperform from Market Perform with a price target of $220, up from $160. Airbnb pioneered the hotel-to-homes shift and at $47B in alternative gross booking value in 2021, he estimates it has greater than 50% share and growing among the global OTAs. The analyst also estimates alternative lodging increased from 24% of global lodging dollars pre-pandemic to 33% today and expects this step-up of alternative in the lodging mix to be permanent coming out of the pandemic. Consensus has Airbnb slowing to 17% growth next year, but Kopelman believes this reflects over-conservatism on the COVID recovery. The analyst is more than 20% above consensus in his own GBV estimate and greater than 50% above consensus on EBITDA.
SELL DRAFTKINGS, BUY PENN NATIONAL: Roth Capital analyst Edward Engel initiated coverage of DraftKings (DKNG) with a Sell rating and $41 price target. While bullish on U.S. online gaming, he doesn't believe 70% market share for the three leaders - Fanduel, BetMGM, and DraftKings - is sustainable. Engel sees DraftKings conceding market share as mid-tier operators ramp up and better cross-sell legacy casino customers and also sees the early market share benefits of DraftKings' Daily Fantasy Sports products fading as markets mature.
Meanwhile, the analyst started coverage of Penn National (PENN) with a Buy rating and $107 price target. Engel believes Barstool and myChoice "offer the most efficient and complementary customer acquisition channels in online gaming" and while investors are concerned with Penn's ability to bring online sports betting technology in-house, he sees an opportunity to adapt a hybrid model. The analyst thinks Penn can leverage an "evolving ecosystem of highly specialized risk and trading functions from emerging third-party B2B service providers."
Additionally, Engel initiated coverage for Rush Street Interactive (RSI) with a Buy rating and $24 price target.
HEALTHY INDUSTRY BACKDROP: Goldman Sachs analyst Kate McShane initiated coverage of Nike (NKE) with a Buy rating and $172 price target. The analyst sees a "healthy industry backdrop" with a company-specific continued focus on innovation to drive growth. Nike has room to expand its direct-to-consumer initiative, which should drive higher gross margins over time, McShane told investors in a research note. In addition, its high cash balance should enable additional investment and capital return to shareholders, she contended, adding that sourcing concerns are transitory and likely priced in following the recent selloff.
END OF FAVORABLE CABLE ENVIRONMENT: Deutsche Bank analyst Bryan Kraft downgraded Altice USA (ATUS) to Hold from Buy with a price target of $22, down from $40. Cable stocks over the past few years have enjoyed a favorable environment, benefitting from strong broadband subscriber growth, a relaxation of the competitive environment, margin expansion from product mix shift and pricing power, and declining capital intensity as network investment needs remained relatively stable, Kraft told investors in a research note. However, the period of favorable conditions for the cable industry "is now transitioning to a more competitive environment," the analyst contended. Kraft also downgraded Charter (CHTR) to Hold from Buy.
Block
+3.98 (+1.71%)
Airbnb
+7.07 (+4.24%)
DraftKings
+0.43 (+0.88%)
Penn Entertainment
+1.27 (+1.76%)
Rush Street Interactive
+0.47 (+2.31%)
Nike
+1.085 (+0.72%)
Altice USA
-0.59 (-3.26%)
Charter
-9.71 (-1.40%)