Here are the biggest analyst calls of the day: Amazon, Constellation Brands, Alibaba & more

“We believe AMZN shares will reach $3,000 by sometime between mid-’21 and mid-’22 or within 24-36 months. Our confidence in this 65% move is based on what we believe to be relatively conservative growth and valuation assumptions that are incorporated into our sum-of-the-parts (SOTP) analysis. Specifically, we assume a multi-year deceleration in growth for every major category of Amazon’s business, along with very minimal adjustment to comp group multiples, despite Amazon growing significantly faster than comps in both the cloud (AWS) and advertising segments. Additionally, we assign a discounted multiple vs. ecommerce comps for the retail segment. We have a high degree of confidence that AMZN shares can reach this level with no major acquisitions or other significant changes to the business. An potential AWS spin-off, however, would, no doubt, help to highlight the relatively low valuation of the other segments. Maintain OW and 12-month PT of $2,225. “

“The downgrade is mainly predicated on price after a 36% jump in the stock from its January 9 low, and to a lesser extent an increasing risk profile with a potential beer demand slowdown this summer as STZ cycles successful innovation from last year. Net, we believe the market is now more appropriately discounting STZ’s long-term corporate revenue growth prospects, as the DCF market-implied +5.5% LT growth forecast for STZ is close to our +6% forecast. Near term, we also see limited potential for beer margin upside in FY20 (we are essentially in-line with STZ’s flat beer margin forecast at +4 bps), and with subpar weather and just OK results (based on scanner data and industry feedback) so far in fiscal Q1, we see some modest risk to our 8% Q1 beer depletion forecast. We have long recommended this name, and the stock is up 1,721% over the last decade, by far the best performer in our coverage. Thus, a move to Equal-weight is a big change for us, but we no longer see potential for beer upside (as detailed above) and/or compelling valuation, which have been the key drivers of our historical thesis. “

“We upgrade Vale to Buy from Neutral and raise our PO to US$15.50 (R$60) from $14.50 on a view much of the worst news is behind, with several catalysts ahead. We arrived at a likely max US$6.5B in estimated fines, dam remediation, lawsuits, and environmental clean up, after discussions with mgmt at our Global Metals and Mining conference last week. While civil lawsuits can drag on, mgmt has been replaced and recent headlines have been more bark than bite (more on pg3) with no production impact but reputational hit from rail disruptions and Gongo Soco dam risks. All upstream tailings dams have been idled. We think Brazil politicians ultimately are keen to restore lost tax revenue. “

“Dow reached our price objective of $49, and we are raising our rating from Underweight to Neutral. Our price target remains $49. We believe that risk and reward for Dow now splits more evenly. Optimism or pessimism over the economy could push the shares a little in either direction, though we do think that further incremental cuts to Consensus EBITDA estimates are likely. Dow’s dividend yield is now 5.8%, which should act as a brake to equity price deterioration – except under the conditions of a prospective recession or a materially lower oil price – either event would lead to large EBITDA reductions in our opinion. Our estimated free cash flow generation for Dow in 2020 of 10% as a base case is high within our universe, and is likely to be supportive to the share price. “

“We are downgrading shares of BIG to Neutral and lowering our PT to $31 (8x 2020 EPS). Our downgrade is based on risk to 1H estimates, and ongoing tariff concerns. We had previously been recommending BIG based on our view of strong 1H upside (tax refunds, easy weather compare) with a low valuation. However, we now believe Q1 was in-line at best, and Q2 appears to have stepped up markdown activity. We also note a number of traffic-challenged retailers have seen negative Q1 earnings prints. On tariffs, BIG imports 21% of sales from China with a majority now getting tariffed at 25%. We do not see potential for notable offsets, and price increases could hurt demand w/ BIG’s moderate income customers. For valuation, we move to 8x EPS – inline w/ other traffic-challenged retailers. “

“Shares have declined ~12% (versus the S&P 500 down ~1%) since the company reported F4Q:19 earnings due to trade war concerns, an Altaba selling event, and concern over nearterm investment in growth initiatives. The stock now trades at 13x F2021 EBITDA, and is even cheaper on earnings from the company’s core marketplace-based businesses (primarily Tmall and Taobao; 55% of F2019 revenue). This compares to other large / megacap U.S. or global eCommerce and digital advertising peers trading at an average of 12x on forward- two year EBITDA, while Alibaba expects to maintain an organic growth rate in the mid-30% range in F2020, significantly above the peer-group. While it is impossible to predict the timing of resolution of certain macro events, we believe the recent pullback has created an opportunity to own shares with a long-term investment horizon. “