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Here are the biggest calls on Wall Street on Friday:
Deutsche Bank upgraded Pinterest to ‘buy’ from ‘hold’
Deutsche upgraded Pinterest after the company’s earnings report and said it had more “confidence” in its ad business.
“We upgrade shares of Pinterest to a Buy rating and $40 target price reflecting a meaningful increase to estimates and more confidence the company can scale its ad business – in the US and internationally – faster than expected. “
UBS upgraded SurveyMonkey to ‘buy’ from ‘neutral’
UBS upgraded the survey company after a positive earnings report and bullish management commentary.
“After another positive earnings report & robust forward mgmt commentary, we upgrade SVMK from Neutral to Buy and raise our PT from $18 to $24. Since its IPO, SVMK mgmt has executed on a mix of enterprise sales & self-serve sales tools, allocated capital to M&A in a way to deepen the product offerings & successfully partnered with companies like CRM & MSFT to widen the market opportunity. Against that backdrop, SVMK’s business model continues to demonstrate pricing power, increased customer spend & higher customer retention – in our view, investors should find that dynamic very compelling. “
Evercore ISI downgraded Square to ‘underperform’ from ‘outperform’
Evercore said the mobile payment technology company was “overvalued” amongst other things after the company’s earnings report.
“Square‘s core, merchant acquiring growth is decelerating faster than expected….Square’s transformation into a two-sided merchant and consumer network with Square Cash makes its pre-IPO adjusted EBITDA margin target of 35-40% unattainable, in our view, given the large amount of investment spending required…SQ is overvalued at 77 times our revised 2021E EPS, we believe, given our 5 year, average adjusted EPS growth forecast of 39%, down from 55% previously. “
MKM initiated Amazon, Alphabet, & Facebook as ‘buy’
MKM initiated Amazon, Facebook, and Alphabet and said each company has a “powerful competitive advantage.”
“With scale and reach, each of these platforms now has gravitational pull unlike any other trifecta of companies in a single sector. While there might be temporary pockets of weakness in the stock prices of these companies, we expect that over the long term each will fare well. In this report, we provide our checklist-based framework to analyze these mega-caps on an ongoing basis, key investment themes affecting all-things-Internet, and a one-page investment thesis write-up for each of the stocks. Please refer to our individual company reports for more details.”
J.P. Morgan initiated iHeartMedia as ‘overweight’
J.P. Morgan said that the broadcast radio platform company has the “scale” and strategy to “outperform” its peers.
“iHeart is the leading broadcast radio platform in the US with a strong and growing digital presence. We believe this scale and multiplatform strategy has allowed iHeart to outperform its broadcast radio peers while also driving higher margins that should allow the company to rapidly delever. “
Bank of America downgraded MGM Resorts to ‘neutral’ from ‘buy’
Bank of America upgraded MGM and said it sees a more “balanced” risk/reward.
“We believe MGM has started to receive credit for three key catalysts 1) its MGM 2020 Plan, 2) its real estate optionality and 3) the ramp up of MGM Cotai in Macau. We are encouraged by MGM’s reduced focus on M&A and capital expenditure as well as its rising focus on deleverage and free cash flow late in the economic cycle. While there could be some short-term catalysts that support the stock, such as near term survey trends, 2020 Plan upside and real estate, we see this balanced by rising cyclical risks, convention competition, high operating leverage and a complicated financial structure. “
Pivotal upgraded Kroger to ‘buy’ from ‘hold’
Pivotal said it thinks the grocery store retailer’s stock is “mispriced.”
“For some time, we have been looking for a better entry point for Kroger. That time has finally arrived. Despite the lack of a near-term catalyst, we think the stock is simply mispriced at this time. We see a lot of parallels to when Kroger was similarly oversold two years ago based on the massive disruption caused by the Amazon/Whole Foods developments. That sell-off proved to be a useful near-term buying opportunity. We see the same type of valuation anomaly with Kroger today following the extreme disappointment with the recent 1Q19 results. “