Here are the biggest analyst calls of the day: Five Below, Fortune Brands, Disney & more

“We are downgrading FIVE, one of our best-in-class names within our coverage universe, from Overweight to Equal Weight. FIVE has surpassed our prior price target, and while we are raising our price target to $140 to reflect continued business momentum, current valuation already reflects much of the fundamental strength we discussed in our December 7th 2018 report Upgrading to Overweight. Our new price target of $140 values FIVE at ~21x FY20 EV/EBITDA, which contemplates FIVE’s continued emergence as one of the most attractive growth stories in retail, but at $140, we believe FIVE is fully valued therefore cannot warrant an Overweight rating. Said differently, in order to justify an OW rating – we would need to value FIVE at $165 (implying ~13% upside from Friday’s level) – and this would reflect an EV/EBITDA multiple of ~29x – lofty in our view. Our new $140 price target values FIVE (at 21x) below peak valuation of ~25x EV/EBITDA, but still well above the 2yr average of ~17x and in line with other high growth consumer retailers/brands (such as NKE, LULU, UAA) – all trade in the 19x-22x range. Figure 2 depicts our methodology on looking at high quality, high growth names on EV/EBITDAR relative to ROIC + Sales growth – and on this metric – FIVE falls slightly above the curve on valuation at current levels. “

“In addition, we upgrade FBHS shares from Neutral to Buy and raise our PO from $55 to $64. We believe FBHS’s stock is most likely to benefit tangentially from MAS’s transformation, given similarities between the businesses. We also upgrade OC shares from Underperform to Neutral and raise our PO from $47 to $58, as our prior valuation multiple did not reflect an improving overall building products operating environment nor the potential for the stock to trade more consistently with a sum of the parts methodology over time. “

“We initiate coverage on FOXA with a Sell rating and $33 price target implying -12% downside. Despite strong revenue trends FOXA is not immune from the headwinds facing cable and broadcast network peers including accelerating subscriber declines and rising sports costs. We prefer media companies which we believe can successfully make the transformative transition from the pay-TV bundle to DTC, like Buy rated Disney. After the asset sale to Disney, FOXA is largely devoid of content ownership which we see as necessary to create a compelling DTC product. Our rating contemplates the structural headwinds facing the pay-TV industry which we do not think is reflected in consensus estimates and valuation, our rating is not a call on the May 9th investor day disappointing. Our DCF driven price target implies a 10x CY’20E FCF multiple, a premium to peers which we believe may still be aggressive as the vast majority of the company’s value is levered to the shredding bundle. “

“After several quarters of increasingly challenged pay TV results for DISH, we find that risk / reward and potential catalysts across wireless and Pay TV are now in balance and a Neutral rating is appropriate. In particular, we believe video subscriber losses are at a nadir and likely to improve dramatically in 2H19 as programming dispute impacts expire, while the remaining subscriber base is longer-tenured, more rural, and thus lower churn. While pay TV financial results will likely be pressured all year, this pressure was already evident in 1Q19 results and improving subscriber losses will be considered a leading indicator. “

“We now expect FY24 subscribers of 65M for Disney+ (guide 60-90M; prior 50M), 52M for Hulu (guide 40-60M; prior 56M) and 8M for ESPN+ (guide 8-12M; prior 6.7M). This combines for 125M global subscribers in FY24, compared to Netflix current global subscribers of 155M and 300M+ by 2024. Mgmt guidance for DTC suggests larger near term losses than we had anticipated, but with the path to profitability sooner than expected. We now expect the DTCI segment to reach breakeven in FY24 vs prior expectation of a $2B loss in FY24 and breakeven in FY26. The swifter subscriber ramp combined with greater operating leverage than we had previously modeled raises our outer year EBITDA estimates 20-30% (excluding consolidation of Fox) and our DCF based price target ~29% from $128 to $165. “

“Attractive social commerce niche with sizable and growing user base… PINS has created a solid user base of 291m MAUs, with ~30% in the US and ~70% international, by being the place to discover and share ideas about subjects and categories of interest. PINS’ user base is skewed toward women and especially mothers, and this should be attractive to advertisers as women tend to control household purchasing. Competition is always a concern but PINS does appear to be differentiated from its social peers and other vertical focused sites.”

“We’re still constructive on the long term online hotels and alternative accommodations penetration story. However, we’re moving to the sidelines as we don’t see a catalyst to move shares higher and don’t believe upward estimate revisions are likely in the near-term. Moreover, EXPE is facing some challenges in one of its key growth drivers—Vrbo (formerly HomeAway), as the brand transition and SEO headwinds appear to be weighing on bookings growth; we believe it could take several quarters to resolve these issues. We agree the valuation appears cheap at ~8x EV/2019 EBITDA, but see shares as remaining range-bound in the near-term. “

“We are adding Overweight-rated FSLR to the J.P. Morgan Analyst Focus List (again) as a near-term idea. F1Q19 results substantiated our view that the company is heading toward a strong earnings inflection on the back of the Series 6 ramp that is not fully-priced into the stock, and which could deliver EPS upside in 2020, relative to current expectations. Our 2019 year-end price target goes to $72.00. “