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James Gorman, chief executive officer of Morgan Stanley.
Michael Nagle | Bloomberg | Getty Images
Here are the biggest calls on Wall Street on Friday:
Citi upgraded Morgan Stanley to ‘buy’ from ‘neutral’
Citi said that Morgan Stanley‘s upcoming earnings may be “difficult,” but it likes the firm’s “limited rate exposure.”
“While 2Q19 is expected to be a difficult quarter, we think this is largely priced in with an implied cost of equity of 12.4%, and see it as an opportunity to increase exposure to a high quality franchise with limited rates exposure. We are raising our target price $4 to $52 after lowering cost of equity 40bps to 11.7%, reflecting a lower market cost of equity, with normal ROTE unchanged at 14%.”
Read more about this call here.
Stephens initiated Zoom & Slack as ‘overweight’
Stephens said that Slack and Zoom are “market leaders” and leading a “sea change” in communications. Slack is a cloud based messaging service for business while Zoom provides remote conferencing services with cloud computing.
“These two market leaders are embodiments of what we call the Third Wave of Unified Communication Transformation. This sea change in communications is defined by a single platform for persistent multi-modal collaboration—built on modern microservices architecture and programmable APIs—which embeds previously siloed applications like persistent team chat, audio, video, customer engagement, and workflow integrations.”
Goldman Sachs upgraded Altria to ‘buy’ from ‘hold’
Goldman upgraded the tobacco maker and said it’s “time to buy tobacco stocks.”
” We upgrade shares of Altria to Buy with an unchanged 12-month price target of $59, implying a 27% total return potential. Tobacco valuations are at a 10-year trough, despite a more accommodating market backdrop for Staples names (late-cycle, lower yield). We expect the current discount being placed on Tobacco stocks to narrow as cigarette fundamentals hold up better than feared, contribution from Next Generation Tobacco Products builds and regulatory concerns subside over time. “
Stifel raised its target price on Lululemon to $238 from $209
Stifel said it is bullish on “Lululemon Practice,” which is the retailer’s loyalty program that gives customers perks.
“We are raising estimates and the 12 month target price for LULU in appreciation of opportunities associated with the planned 2020 market expansion of lululemon practice. practice is a fee based membership program that provides benefits to enrolled members including exclusive access to products and events. In addition to providing revenue associated with annual membership fees, we expect practice enables lululemon to better serve the most valuable and engaged guests to drive incremental purchases. “
Goldman Sachs upgraded Snap and StitchFix to ‘buy’ from ‘neutral’
Goldman Sachs said that it likes the “positive trends” in user growth at Snap as well as the product innovation at personal styling company, StitchFix.
“For Snap, we believe product improvements and feature additions are driving positive trends in user growth and engagement (Exhibits 37-38) that, along with monetization improvement from ad tech initiatives, should drive upside to consensus estimates. At StitchFix, we believe product innovation, operational efficiencies, and geographic expansion, combined with the increase in retail store closures (particularly in apparel) represent significant opportunities for further outperformance. “
Wells Fargo raised its target price on Microsoft to $160 from $145
UBS upgraded Deutsche Bank to ‘neutral’ from ‘sell’
UBS said it sees the German bank with a “more balanced” risk/reward.
“Following the announcement of DB‘s new strategy we upgrade to Neutral as we see a more balanced risk/reward. We expect more aggressive cost cuts and also regulatory support potentially resulting in lower capital requirements. “
Citi lowered its price target on Boeing to $430 from $450
Citi said the stock doesn’t “work” until the Max issue is “resolved.”
“Our BA model now assumes grounding through 3Q, although to be honest, very few people actually have a decent idea of when this thing flies again. So we’re making an assumption for the sake of the model. While we maintain that a couple of months delay doesn’t make a fundamental difference, we acknowledge that returning to service in 4Q19 is important so that airlines don’t start making different plans for Summer 2020. “
Pivotal raised its price target on Charter to $500 from $425
Pivotal said it raised its price target to a street high on the telecommunications company & forecasted “solid” results for the rest of the year.
“We are raising our target price from $425 to $500, driven primarily by a move to YE’20 target from YE’19 and to a lesser extent an increase in our medium/long term data ARPU growth forecasts. We forecast solid results for the balance of the year as the company begins to fully realize the benefit of the substantial investments made in their plant/packages and promotions and the strong outlook for data growth. At our new Street high target CHTR would trade at 16X ’20 market cap /’20 free cash flow vs. 13X currently. “
Guggenheim raised its price target on Boston Beer to $421 from $372
Guggenheim said it expects the company to report “strong” results on the backbone of “new innovations.”
“Ahead of what we expect will be strong 2Q results, we reiterate our BUY on Boston Beer shares given the growth runway ahead driven by Twisted Tea, Truly, and other new innovations. In addition, we see a lower degree of risk associated with the expected future growth given the reduced reliance on new innovations to drive the algorithm and the addition of Dogfish Head. “
