Analyst Calls of the day

From CNBC Pro

Here are the biggest calls on Wall Street on Friday:

Deutsche Bank reiterates Peloton as buy

Deutsche kept its buy rating on shares of Peloton heading into earnings next week and said the company is at a “critical juncture.”

“We see this earnings call as being a clear and meaningful opportunity—but one of short duration—for management to convince the Street that it is pivoting its strategy in several key ways.”

Loop upgrades Penn National Gaming to hold from from sell

Loop upgraded the stock after its earnings report on Thursday and said the company’s balance sheet is “strengthening.”

PENN’s newly authorized $750mn buyback is, in our view, testament to the company’s strong and strengthening balance sheet and underscores management’s conviction that the shares may be undervalued.”

Roth downgrades Penn National Gaming to neutral from buy

Roth downgraded the stock after its earnings report on Thursday and said the outlook is “less attractive.”

“While we remain bullish on PENN’s digital opportunity longer-term, we see several negative catalysts in 2022 that could erode confidence in its market share trajectory.”

Morgan Stanley upgrades General Dynamics to equal weight from underweight

Morgan Stanley said in its upgrade of the aerospace company that General Dynamics’ stock is at an inflection point.

“We increase our PT to $215 as we factor in 2023 earnings potential and upgrade to Equal-weight on Gulfstream’s planned delivery ramp.”

Deutsche Bank downgrades Cigna to hold from buy

Deutsche said in its downgrade of the health-care company that it sees a lack of near-term catalysts for the stock.

“At this time, Cigna appears to lack a catalyst for multiple expansion and lacks exposure to end markets that can produce meaningful earnings upside, with the company hoping to take another swing at the MA market in 2023.”

Deutsche Bank upgrades BJ’s Wholesale Club to buy from hold

Deutsche said in its upgrade of BJ Wholesale Club that it sees a compelling risk/reward.

“Following the stock’s ~10% pullback YTD, we now see favorable risk/reward, especially as we anticipate U.S. consumers to become increasingly value-oriented in light of inflationary pressures eating into wage growth.”

Citi upgrades Estee Lauder to buy from neutral

Citi said in its upgrade of the cosmetics stock that investors should buy the dip.

EL’s stock has pulled back 20%+ YTD, primarily reflecting concerns about a slowdown in China and higher investment spending to come in the near term. While we appreciate these near-term investor concerns, we think EL remains one of the structurally fastest-growing and strategically best-placed names in our space.”

RBC downgrades Snap to sector perform from outperform

RBC downgraded the social media stock after its earnings report on Thursday and said it lacks confidence in the company’s content strategy.

“Alongside the dramatic +55% AH (after hours) move, we opt to downgrade SNAP to Sector Perform given: 1) we lack confidence of iOS targeting improvements management is messaging; 2) we lack confidence in the content strategy necessary to drive faster user growth amidst rising competition.”

Piper Sandler reiterates Lyft as overweight

Piper Sandler kept its overweight rating on shares of Lyft. The firm said cell phone tracking data shows that the ride-sharing company’s fundamentals might be better than investors expect.

LYFT has struggled alongside many tech stocks lately, but based on cell phone ping data from the Department of Transportation, we think 2022 may be off to a stronger start than many expect. In short, Americans have continued making short trips despite the Omicron surge, with total trips exceeding levels from the comparable periods in Jan ’19 and Jan ’20.”

Oppenheimer reiterates Uber as outperform

Oppenheimer kept its outperform rating on shares of Uber and said its Feb. 10 investor day could serve as a positive catalyst.

“We believe investors are on the sidelines waiting for Mobility recovery, while concerned about Delivery fall-off and increased competition. With UBER hosting its first Investor Day since the IPO, we expect it to provide an updated five-year outlook and address many of the overhanging concerns around competition/regulation.”

Atlantic Equities downgrades Clorox to underweight from equal weight

Atlantic Equities said in its downgrade of the cleaning products stock that it’s concerned about gross margin contraction.

Clorox continues to see sales recover on strong demand, pricing actions and recovering market shares, but gross margin contraction continues to widen.”

BMO downgrades Biogen to market perform from outperform

BMO said in its downgrade of Biogen that it’s concerned about the narrative surrounding the company’s Alzheimer’s drug, Aduhelm.

“Downgrading BIIB shares to Market Perform from Outperform and decreasing out target to $238. We see an increasingly challenging narrative around the outlook for Aduhelm and overall management of the business.”

Read more about this call here.

JPMorgan reiterates PepsiCo as overweight

JPMorgan kept its overweight rating on the beverage giant heading into earnings next week. The firm said it expects continuing sales momentum for PepsiCo.

“We expect that underlying consumer demand remained strong at the end of the year and that the additional pricing actions in the fall began to flow though in the 4Q21 (although more so in 1Q22) and help to mitigate some of the inflationary pressures.”

Bank of America reiterates Amazon as buy

Bank of America kept Amazon as a top pick following the e-commerce giant’s earnings report and said it continues to gain share.

Amazon’s profit outlook is improving as the COVID impact on labor and supply chain subsides, and AWS is a clear beneficiary of the corporate capex cycle.”

Read more about this call here.

Bank of America upgrades Snap to buy from neutral

Bank of America upgraded Snap after its earnings report on Thursday and said the stock’s valuation is attractive.

“We see multiple product catalysts that could drive ARPU expansion (Spotlight/Maps monetization, measurement tools) and accelerate growth to 50%+ exiting 2022.”

Read more about this call here.

JPMorgan reiterates Coca-Cola as overweight

JPMorgan kept its overweight rating on shares of the beverage company and said it’s bullish heading into earnings next week.

“We think KO is set up for a strong quarter as our/consensus estimates contemplate only a modest acceleration from 3Q in the two-year CAGR on unit case volume and price/mix despite all indications that the operating environment was likely supportive sequentially.”

Argus downgrades Facebook to hold from buy

Argus downgraded the social-media stock after its disappointing earnings report earlier this week.

“The 4Q results were modestly disappointing, though it was the company’s outlook that both upset the
market and led to our downgrade. Although controversy has often swirled around Meta, the company faces a long list of problems in 2022, with increased competition and pressure from Apple’s new advertising tracking policy being the most salient.”

Morgan Stanley reiterates Textron as overweight

Morgan Stanley kept its overweight rating on shares of the aircraft company and said the stock’s valuation is attractive.

“Robust Demand Continues at TXT Aviation; Strong Margin Outlook for 2022 Management continues to see robust demand for bizjets from both individual buyers and fractionals as book to bill came in at 1.44x.”


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