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Here's the biggest calls of the day that we're watching:
' "The stream of global macro data points have been less encouraging of late suggesting to us that the industry risks are now more biased to the downside... That said, we are finding it more difficult to advocate "new money" positions in names with the most exposure to global markets... As such, we are downgrading our ratings on AAL and DAL to Hold to reflect this concern although we remain confident that management will respond quickly to address any possible fall-off in demand... "
"We are downgrading L Brands to Market-perform and reducing our TP to $30. We also reduce our 2019 EPS by 25% to $2.32... Our Outperform rating was predicated on a view that investors were paying for Bath & Body Works with a free option on Victoria's Secret... While that fundamentally hasn't changed, and our DCF still suggests significant upside to the stock if management is able to stabilize Victoria's Secret, we now believe stabilization for Victoria's Secret is unlikely in 2019 and struggle to see any catalysts that will unlock a higher valuation... "
"We see an increasingly positive risk/reward for LB given FY19 guidance that should establish an EPS floor, an emerging strategy for Victoria's Secret that could build visibility to an eventual brand recovery, and an undemanding valuation... We maintain our $31 PT, which represents +19% upside vs. the current stock price... "
"Benign used car environment at least through 1H19 takes some pressure off HTZ and allows room for transformation: While we have been a fan of HTZ CEO Marinello's transformation program, we remained cautious on the shares due to HTZ's debt overhang... However, we believe the continued strength in used car prices as well as rental car pricing sets a favorable backdrop for HTZ to refinance its corporate debt – which improves our multiples, while progress on execution slightly raises our 2020 EBITDA estimates... At the same time, we see risk to used car pricing in 2H that keeps us from going to Overweight on either HTZ or CAR. We do upgrade HTZ to EW (PT$18 from $14), while we reiterate our EW on CAR (PT $41 from $40)... "
"Our downgrade is based on the following: (1) The helium supply shortage is now expected to persist throughout 2019, which is a step change from management's earlier commentary that the situation was likely to improve with the opening of new refining facilities... PRTY is currently at 60-70% helium allocation vs. ~80-85% normally and expects the shortfall to continue at these levels in 2019. (2) We see risk to PRTY's backhalf-weighted ~1% comp guidance for 2019 that will likely weigh on the stock until disproved... Peeling back the onion, PRTY laps ~70 bps of net headwinds in 2018 (helium shortage and supply chain disruptions in China, offset by the tailwinds from the lapping of hurricanes and search-engine related glitch in 2017), while management expects 50-100 bps drag from continued helium shortage in 2019. This suggests the underlying core comp is expected to be ~1% in FY19... Although we believe the IP pipeline in 2019 is strong, we remain skeptical about the magnitude of expected acceleration as PRTY only posted a flattish underlying comp despite a flush consumer environment in 2018... We are modeling FY19 comp at 0.6%. (3) PRTY ended the year with 25% inventory growth YoY against a sales growth of 2.4%, about half of which was the result of sales underperformance in 2018, which we believe poses meaningful markdown risks as management expects inventory to be a source of cash to paydown debt in 2019... Lastly, the CFO is leaving and it's unclear what will drive growth for the retail concept given prior efforts and considering we just passed through one of the most buoyant consumer environments in 2018... "
"Near term risks create more downside potential. Despite how "cheap" the stock appears, we see downside catalysts ahead including: 1Q and FY comp and earnings guidance (we are below the Street), the potential for more promotions to drive sales (downside GM), higher capital and operating expenses to turn the business, and a new CEO "reset." Indeed, despite numerous efforts to improve sales, MIK was only able to comp ~1% in a very robust consumer environment... We doubt the company just sticks to the existing plan, especially if a new CEO is coming, and perhaps a new plan comes on 4Q.. "
"We believe the market is undervaluing CPRI's portfolio of brands, global growth potential, superior margins, and strong cash flows... Standalone value of KORS brand is also dislocated. Company P/E <10x while earnings revisions are likely higher with multiple tailwinds and catalysts ahead. Our EPS numbers are above Street with EPS upside potential to $6... "