Calls of the day: Disney, Autodesk, Murphy Oil & more

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Here are the biggest calls on Wall Street on Friday

J.P. Morgan said that after the company’s investor day the firm has, “strong conviction,” that Disney shares will outperform.

Disney surprised on the upside at its investor meeting yesterday, providing more financial disclosure and revealing a more content rich streaming service than previously expected. In addition, management provided a target for Disney+ of 60m-90m subscribers by F2024, on the higher end of our expectations, which we believe were already above consensus. While profitability in the product is not expected until F2024 (which may prove conservative), overall we walked away from the meeting very encouraged about the outlook and its likely success. With a low price point of $6.99 per month and robust content with four quadrant appeal, we would expect a steep initial ramp in subscribers. Combining this rapid ramp with ongoing growth in the core underlying business and synergies from the Fox deal, we have strong conviction that shares of DIS are well positioned to outperform ahead. Following a period of restriction, we are moving to an Overweight rating and a December 2019 price target of $137 (Overweight rating and December 2018 price target of $125 prior to restriction) from a Not Rated designation.”

New Street Research said the street is too optimistic about Apple‘s iPhone replacement rates among other factors.

“We downgrade the stock to Sell, with a $170 target price, reflecting normalized multiples, and we see a tactical short opportunity into the 2FQ 2019 report. Positive sentiment on services and potentially good numbers on that front could save the day, but don’t create a material upside risk on today’s valuation.”

Mizuho said the software maker has “strong upsell opportunities.”

“We initiate on ADSK with a Buy rating and a $200 price target. ADSK is successfully extending its value proposition beyond its traditional design base into building lifecycle management, construction, and generative design, increasing penetration with existing customers and expanding its overall TAM. With strong upsell opportunities to Industry Collections, an improving direct sales mix, and more targeted digital marketing, we see multiple catalysts for long-term growth.”

Goldman said recent portfolio changes has made them more bullish on the global oil exploration and production company.

“We upgrade Murphy Oil shares to Neutral from Sell as we view recent portfolio changes in Malaysia and the GOM as favorable to FCF visibility in the near-term and see shares trading at multiples more in-line with the company’s positioning relative to peers. We see 13% upside to our $31.50 DCF-based 12-month price target ($29.00 prior) vs 10% upside on average for our E&P coverage universe. MUR has recently highlighted its commitment to balance sheet improvements, delivering returns to shareholders (through dividend, debt buyback and new share repurchase program) and maintaining/accelerating FCF generation (through greater focus on GOM and US onshore assets).”

Goldman Sachs said they see “less favorable competitive positioning” for the hydrocarbon exploration company.

“We downgrade Chesapeake Energy Corp. shares to Sell from Neutral as we see less favorable competitive positioning on supply cost, corporate returns vs. peers and believe balance sheet improvement is still warranted following the acquisition of WildHorse Resource Development Corporation (WRD). Since completing its acquisition of WRD on 2/1, CHK shares are +19% on an absolute basis and +15% vs. the XOP. We see 26% downside to our $2.50 DCF-based price target ($2.75 prior) vs. 10% upside on average for our E&P coverage universe.”

Wedbush is bullish on the real estate brokerage’s ability to “capture market share.”

“We initiate coverage of RDFN shares with an outperform rating and a $30 price target. We view Redfin as a residential real estate brokerage with a fundamentally different relationship with technology that will enable it to better capture market share in a rapidly evolving landscape. The adoption of technology from the traditional brokerage ecosystem has been notoriously slow. And as newer, techenabled brokerage business models, as well as portals, and iBuyers, have been better adept at embracing technology, the incumbents are increasingly on their heels. Residential real estate is often thought of as the last consumer industry that has not been impacted by the technological revolution. That is quickly changing and we view Redfin as well positioned in the center of it.”

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