There were a ton of analyst calls from Wall Street analysts on Wednesday, following a lull stemming from the new year and the tumultuous markets.
Reflecting the mood of those markets, the calls were a mix of buys and sells. But if any theme emerged it was a concern about an economic slowdown. Here were the biggest calls:
The firm also slashed its price target on the home-improvement retailer to $105 from $120.
“It is unproven that the company can accelerate comps into a decelerating macro/industry across the board in 2019, particularly when many turnaround initiatives are based on either better labor execution or major investments (supply chain, IT, ETC); neither of which we have (ever) seen drastically change near-term results for retailers in our 15 years covering the industry,” Barclays said.
Oracle was downgraded by Barclays and its price target was cut to $55 from $60.
“We believe the company will need more time to see positive results on a company level from its evolution to cloud,” the note said. The analyst said Salesforce is the top pick and also likes Microsoft, VMware and MongoDB.
“We think the current share price offers an attractive entry point for a leading franchise with proven risk and expense discipline and above peer profitability,” stated the note. “Even with slowing revenue growth, BAC should continue improving efficiency metrics and, importantly, appears comparatively well positioned to withstand a turn in credit.”
“We are upgrading MS to buy as we believe recent sell off presents an attractive opportunity to buy a superior franchise, despite our recognition that 4Q will be a very challenging quarter for the capital markets businesses,” stated the note.
The firm also raised its price target from $92 to $95, representing a 25 percent rally from here, on optimism about the sneaker maker’s online sales expansion.
“Q2 an impressive beat but we are more impressed by what’s coming ahead in terms of digital and how it affects Nike’s model…After years of investments and a decade of stable margins, Nike could be at brink of multi-year margin expansion story,” the note stated.
“With management thinking that its target for digital to reach 30% by 2023 is likely low and mentioning that eventually online sales could exceed 50% of its business, we see this as a margin game-changer. Indeed, heavy investments have been made in platforms and data analytics, and we believe that returns are now bound to start being more visible,” added the analyst.
(Separately Nike was downgraded by Baird on concerns about valuation.)
“After considerable analysis of the sources of CL‘s problems that caused organic sales to decline, we believe the worst is behind the company and expect organic sales to sequentially accelerate over the next four quarters,” states the note.
“We are turning incrementally more cautious on the travel space given the highly discretionary nature of travel spend and market expectations for a macro slowdown,” stated the note. The analyst cut the firm’s price target on BKNG to $1,940 from $2,400.
“We see the maturing online travel industry (online hotel penetration is approaching 50% in the US/Europe) entering a period of slower room night growth and increased investment in new offerings (alternative accommodations, in-travel experiences, restaurants, loyalty/discounts, etc.) as online travel agencies invest to drive more direct, repeat users and larger shares of wallet…aiming for eventual faster long-term growth,” stated the note.
The firm has a $2,050 price target (down from $2,100) on Booking and $125 price target (down from $150) on Expedia.
“After the sharp correction of memory stocks, and even with significantly lowered numbers, we now see more attractive risk/reward for 2019 and thus upgrade Micron to uutperform,” stated the note. “For Micron, although we still see up to 20% potential further downside in the worst scenario (back to 0.85x book as seen in the 2015/16 downturn), the risk/reward is now too attractive to ignore.”
Other interesting calls on Wednesday included Oppenheimer raising Wendy’s to outperform, Goldman downgrading Estee Lauder to sell, and Piper Jaffray initiating coverage of Canopy Growth and Tilray with overweight ratings.
— With reporting by
CNBC’s Michael Bloom
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