Here are the biggest analyst calls of the day: Qualcomm, Tesla, Chipotle, Tiffany & more

Key Points
  • Stifel upgraded Qualcomm to buy from hold
  • Evercore ISI  upgraded Qualcomm to outperform from in line
  • J.P. Morgan upgraded Qualcomm to overweight from neutral
  • Bernstein initiated Tiffany as outperform
  • Jefferies downgraded Bank of America to hold from buy
  • Baird lowered their price target on Tesla to $400 from $465
  • UBS downgraded PayPal Holdings to neutral from buy
  • Susquehanna initiated Lyft as neutral
  • Bank of America initiated Canopy Growth as buy
  • Bank of America initiated Aurora Cannabis as buy
  • Bank of America initiated Cronos as underperform
  • Longbow downgraded Shake Shack to neutral from buy
  • Morgan Stanley upgraded Domino's Pizza to overweight from equal weight
  • Morgan Stanley downgraded Chipotle to equal weight from overweight
  • Susquehanna downgraded D.R. Horton and Lennar to neutral from positive
Attendees walk by the Qualcomm booth during CES 2019 at the Las Vegas Convention Center on January 9, 2019 in Las Vegas, Nevada.
Justin Sullivan | Getty Images

Here are the biggest calls on Wall Street on Wednesday:

Stifel upgraded Qualcomm to 'buy' from 'hold'

Stifel upgraded the stock after the company announced it had settled its legal dispute with Apple.

"We are upgrading the QCOM shares based on a surprise announcement today that Qualcomm has reached an out of court settlement with Apple. Based on Qualcomm management's projection of $2.00/share earnings increase once iPhones ramp into production with Qualcomm modems inside, we believe there is no or only a slight discount to Qualcomm's licensing fee. In our view, Apple made the concession based on the need to have a 5G iPhone in the market in 2020. Also, in our view, this may signal that Intel's 5G modem may not be production-ready in 2020. Our 12-month target price is now $100 based on 16x FY20E non-GAAP EPS."

Evercore ISI upgraded Qualcomm to 'outperform' from 'in line'

Evercore ISI says Qualcomm shares are finally "investable" again after the company settled its legal dispute with Apple.

"Our prior price target of $60 reflected 13.5x normalized FY20 EPS. Assuming the same multiple on the higher anticipated earnings into FY21, we raise our price target to $90 and upgrade the stock to Outperform. Moreover, with litigation likely mostly behind us coupled with clear visibility to 5G ramp, QCOM shares are finally investable again."

J.P. Morgan upgraded Qualcomm to 'overweight' from 'neutral'

J.P. Morgan upgraded the stock saying it now had "strong 5G positioning."

"While waiting for further details on Qualcomm's May 1 earnings call, our preliminary math indicates that royalty payments on an ongoing basis on a per iPhone basis are unlikely to be materially different from Qualcomm's licensing rate for SEPs, and points to potentially only modest headwinds (if at all) from offering the same licensing rate to other OEMs. Additionally, the agreement opens up the opportunity to resume chipset supply to Apple, ranging from a sizeable market share on iPhone units in the (Sep) 2020 models to an upside opportunity from capturing a primary position on the device if competitors are unable to deliver a 5G chipset. We are upgrading QCOM shares on combination of upside driven by 5G leadership and dissipation of downside risks from litigations following this agreement."

Bernstein initiated Tiffany as 'outperform'

Bernstein said the company is making progress in transformation with a new CEO and management.

"Tiffany's brand equity seems stronger than that of its USA soft luxury peers, as it has: a) a more prominent position in its category; b) a tighter control on distribution with virtually 100% retail exposure; c) limited exposure to the off-price. These elements converge to make Tiffany a more structurally appealing brand long-term."

Jefferies downgraded Bank of America to 'hold' from 'buy'

Jefferies said negative EPS revisions could be a "weight" on the stock.

"We downgrade BAC to Hold, given negative EPS revisions (our '20 down 3%) and not enough upside to warrant a Buy rating. After a very strong 4Q18 result, the 1Q19 print showed incremental challenges in numerous revenue areas. This spans both net int. income (higher deposit costs, less asset-side repricing) and fees (card fees, services charges tougher, adding to the well-known capital markets-related dips). We prefer putting new money into Citi among universals."

Baird lowered its price target on Tesla to $400 from $465

Baird said that it expects shares to still outperform but lowered its price target on disappointing first quarter deliveries.

"Reiterate Outperform rating and lowering price target to $400. Q1 deliveries were not sufficient to improve negative sentiment and investors will likely focus on Q1 cash balance, which might disappoint following the convert repayment and working capital headwinds. While we are recalibrating our expectations, we continue to expect shares will outperform over time as TSLA introduces innovative products, increases profitability, and generates free cash flow."

UBS downgraded PayPal Holdings to 'neutral' from 'buy'

UBS downgraded the PayPal mostly on valuation.

"Downgrade reflects limited EPS from core operations or Venmo in 2019-20 Our downgrade to Neutral reflects three factors: 1) Our EPS sensitivity analysis on PayPal's core operations indicates limited beat-and-raise potential over a two-year horizon, and our bull scenario for Venmo monetization would only add 2% to our current 2020E EPS. 2) While the UBS Evidence Lab P2P Spend Tracker survey data indicates that Venmo maintains a leading competitive position in P2P payments, we estimate this competitive position will translate into limited revenue and net income contribution over the next two years, even in a bullish monetization scenario. And 3) Limited valuation upside: we're raising our price target to $120 which reflects $13 for Venmo and $107 for PayPal ex-Venmo, which maintains core PayPal's premium to peers and historical levels."

Susquehanna initiated Lyft as 'neutral'

Susquehanna said it has concerns about industry dynamics and Lyft's position as the No. 2 player.

"We like LYFT's service and large and growing TAM, but intermediate- to long-term competitive and industry dynamics worry us. LYFT clearly has built one of the leading ridesharing services in the US and operates in a very large and growing market. However, we're worried about the competitive dynamics of being the #2 player in a market where scale is extremely important, and switching costs for riders and drivers are relatively low and barriers to entry – while they exist – aren't insurmountable, especially for larger scaled US and international Internet companies."

Bank of America initiated Canopy Growth as 'buy'

Bank of America said the company is well positioned to be a "long-term leader" in the cannabis sector.

"We initiate coverage of Canopy Growth a leading producer of cannabis and related products, with a Buy rating. Our PO is US$52/C$70 on 24x CY20e EV/sales, backed by a detailed valuation framework. We think Canopy is one of the few companies in pole-position to be a long-term leader in the global cannabis sector."

Bank of America initiated Aurora Cannabis as 'buy'

Bank of America said it sees Aurora as one of the "few truly global companies" in the sector.

"We are initiating coverage of Aurora Cannabis with a Buy rating and US$11/C$15 price objectives, on 17x CY20e EV/sales, backed by our DCF. We believe Aurora is positioning itself as one of few truly global companies in the cannabis sector."

Bank of America initiated Cronos as underperform

Bank of America said it is not comfortable with the cannabis company's valuation.

"We initiate coverage of Cronos, a Canada based cannabis company, with an Underperform rating and C$17/US$13 price objectives, on 23x our CY20e EV/sales and backed by our detailed valuation framework. Cronos is a compelling fundamental story in our view, but we are unable to get comfortable with valuation."

Longbow downgraded Shake Shack to 'neutral' from 'buy'

Longbow downgraded the stock mostly on valuation.

"The shares of SHAK are up approximately 25% since November, due in part to the company's reported modest comparable sales beat for 4Q18 in late February. • Looking ahead, we remain positive on the company fundamentals. In the near term, we are confident SHAK's can generate at least modestly positive same-store sales growth over the next 12-18 months based largely on the simple fact that the company's base of comp stores will continue to expand outside of the NYC region. In the long term, new store productivity and unit expansion represent the heart of SHAK's long-term growth story and each quarter of better than expected new store AUV generate gives us greater confidence the concept can succeed outside of its home NYC market."

Morgan Stanley upgraded Domino's Pizza to 'overweight' from 'equal weight'

Morgan Stanley upgraded the stock saying it sees an "entry point for investors."

"We see DPZ trading at an attractive valuation relative to slower growing peers, creating an entry point for investors. While we acknowledge near term controversies around top line, we think the market is already pricing in a further deceleration in comps, and long term growth remains peer leading."

Morgan Stanley downgraded Chipotle to 'equal weight' from 'overweight'

Morgan Stanley downgraded the company saying that shares are approaching the firm's "bull case valuation."

"A significant run up in the share price (+65% YTD and more than doubling in the past year) leaves CMG close to our bull case, which could still take 2-3 years to fully play out. We remain constructive on fundamentals, but see less upside for the stock. Modestly raising EPS estimates and PT."

Susquehanna downgraded D.R. Horton and Lennar to 'neutral' from 'positive'

Susquehanna said 2019 for  D.R. Horton and Lennar has morphed into a "classic spring season for both demand and the stocks."

"Despite volatility around all things housing in 4Q18, after visiting 200+ communities to date, we think 2019 has evolved into a classic spring season for both demand and the stocks. Demand began improving around mid-February and by our checks indicate that momentum has generally continued to improve into April. Even markets that were called out as particularly soft in 4Q18, like Inland Empire and Dallas, have rebounded to a varying degree since last year. Most markets saw heavy incentives in December and January, but it appears that most markets and builders have been pulling back on this front as spring has progressed / demand has re-emerged. The stock market has responded accordingly – the ITB is up ~25% YTD at press time, and is also up ~25% since November 15th of last year. We make this point as historically, we see the November 15th to April 15th window as the bulk of the spring trade, and historically the spring trade is worth ~20% to the group on average. Simply put – despite the noise, this spring looks a lot like other springs historically, both in traffic patterns and in stock performance to date."