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Lyft CEO Logan Green (C) and President John Zimmer (LEFT C) applaud during the Nasdaq opening bell ceremony celebrating the company’s initial public offering (IPO) on March 29, 2019 in Los Angeles, California.
Mario Tama | Getty Images News | Getty Images
Here are the biggest calls on Wall Street on Friday:
Wells Fargo raised its price target on Amazon to $2,300 from $2,200
Wells raised its price target on Amazon and said it was “positive” on the company’s “higher margin” businesses.
“Top large cap pick with several growth vectors and plenty of room to run, in our view. … We remain positive on AMZN as higher margins business segments like AWS, Advertising, and 3P $(50B, +23% yr/yr are growing faster than core Amazon, fueling reinvestment into the business (AWS, one-day shipping offering, category expansion).”
Wells Fargo downgraded eBay to ‘market perform’ from ‘outperform’
Wells Fargo downgraded the company mainly on valuation.
“EBAY is up roughly +40% YTD. While we still believe EBAY is well-positioned to capitalize on the expanding eCommerce industry, we believe the stock’s valuation is reflective of its current position in the competitive landscape. An additional driver of our ratings change is continued macroeconomic pressure in the U.K., which is negatively impacting European markets and expected to continue in the near-term.”
Wells Fargo downgraded Booking Holdings to ‘market perform’ from ‘outperform’
Wells Fargo downgraded the company mainly on valuation.
“BKNG is currently up 19% YTD, and while we still believe BKNG is well-positioned to capitalize on solid room night growth trends and the expansion of its alternative accommodations business segment, we believe the stock’s valuation at this range is reflective of this growth. We raise our price target to $2150.”
Wells Fargo initiated Lyft as ‘outperform’
Wells Fargo said it sees “upside” due to faster than expected growth among other things.
“Despite the stock’s performance since its IPO, we believe LYFT has opportunities that will bear fruit longer term to move the needle. We see upside potential in LYFT driven mostly by (1) faster-than-expected growth of revenue/active rider, as we think the current share price already reflects a rapid growth rate in number of active riders at current engagement levels, (2) upward revisions in EBITDA and Contribution Margins, driven by improved Ridesharing profitability, and (3) demonstrated profitability and growth of Lyft’s new businesses into which management has allocated significant capital.”
J.P. Morgan downgraded Box to ‘underweight’ from ‘neutral’
J.P. Morgan cited valuation and intensifying competition in its downgrade of the cloud software company.
“We are downgrading shares of BOX to Underweight from Neutral on the heels of a recent run-up despite mixed results from the company for the following reasons: 1) Competition is intensifying in Box’s target markets. While Box’s solutions have evolved from basic file-sync and share use cases to more sophisticated cloud content management, we believe Box is increasingly more vulnerable to Microsoft, not only because of an improving competitive product but also because of Microsoft’s resilient growth-at-scale for Office 365 offerings feeding OneDrive into enterprise environments at minimal cost to the customer. 2) Negative spending intentions for Box in our 2019 CIO survey reflect the heightened competition.”
Evercore ISI upgraded Match to ‘outperform’ from ‘in line’
Evercore upgraded the internet operator of dating sites and said it sees a “30% upside” in the stock.
“We are therefore upgrading MTCH to an Outperform rating, on the basis of (1) near-term upside for Tinder subs vs estimates given improved payer conversion, (2) underappreciated growth from Hinge in the medium-term, and (3) long-term upside levers from market expanding investments in APAC.”
UBS downgraded Carnival to ‘neutral’ from ‘buy’
UBS downgraded the cruise company after the company reported earnings with a growth outlook that was “muted.”
“We are downgrading CCL to Neutral from Buy, with a price target of $47, down from $60 previously, as we lower our 2020 estimates on a lower valuation multiple given a more muted earnings growth outlook due to further weakening in European sourcing and 2 years of flat EPS.”
Bank of America upgraded Texas Instruments to ‘buy’ from ‘neutral’
Bank of America said that despite some headwinds such as the U.S.-China trade dispute, the company has “superior” free cash flow to support shares of the stock.
“While trade headwinds and muted global demand is likely to weigh on all semiconductor and especially diversified analog/industrial vendors, we believe TXN‘s superior FCF return history is likely to support its stock. … We believe the difference in portfolio and solid track record of FCF returns positions TXN to outperform MXIM over the next twelve months.”
Bank of America upgraded Kimberly-Clark to ‘buy’ from ‘neutral’
Bank of America upgraded the multinational personal care company on “improving” organic sales growth.
“We are upgrading shares of KMB to Buy from Neutral driven by improving organic sales growth and margins, with the company positioned to disproportionately benefit from waning raw material costs, especially pulp, which by our estimates could provide a $200m tailwind over the next 12 months.”
Bank of America upgraded Church & Dwight to ‘buy’ from neutral’
Bank of America said in its upgrade of the manufacturer of household products that the recent slide in shares present an “attractive” entry point.
“With strong and consistent trends, which we expect to continue, yet underperformance in shares YTD, we upgrade CHD to Buy from Neutral and raise our PO to $83 on an unchanged 30x target P/E, now on modestly higher CY20 EPS ests. CHD has one of the best track records in Consumer Staples, solid momentum, and margin tailwinds to boot, but shares have retreated 9% since 8/28 amidst the value rotation vs S&P500 +3% and XLP flat.”
Bank of America downgraded Canopy Growth to ‘neutral’ from buy’
Bank of America downgraded the cannabis company and said it thinks industry growth could potentially “flatten” in the second half.
“To be clear, we still see Canopy as a long-term leader in an industry with a large and growing Total Addressable Market, increasingly accessible as jurisdictions legalize cannabis. The issue? Canada industry growth is set to pause in 2H, potentially flattening, a trend we think could also be the case with Canopy; and yet, the Street is modeling strong double-digit sales growth q/q. So, while constructive long-term, and our call is based on channel dynamics outside of the company’s control, we see too much risk to the stock until estimates are rebased.”
