- Atlantic Equities downgraded Caterpillar to underweight from neutral
- Bank of America initiated Stanley Black & Decker as underperform
- Goldman Sachs upgraded SeaWorld to buy from neutral
- Deutsche Bank upgraded LabCorp to buy from hold
- Baird upgraded Crocs to outperform from neutral
- Baird upgraded KeyCorp to outperform from neutral
- Jefferies lowered its target price on Tesla to $300 from $400
- Baird raised its price target on Tesla to $355 from $340
- J.P. Morgan lowered its price target on Micron to $50 from $64
Here are the biggest calls on Wall Street on Friday:
Atlantic Equities downgraded the stock citing expectations of weaker macroeconomic growth.
"Given the relatively larger reductions to our EPS estimates for CAT and GWW, combined with our view that PE multiples will not expand as sell-side estimates are lowered, we expect the shares for these companies to come under the most pressure and lag the average return we see for our overall coverage."
Bank of America said the company is "bull case challenged" and cited trade worries in its initiation of the stock.
"We launch coverage of global power tool market leader Stanley Black & Decker with an Underperform (according to Bloomberg the only one out of 21 analysts including 15 Buys) rating and $140 PO. Stanley is a high quality company that has made big strides over the last decade, but we see slowing power tool trends as home prices moderate. Industrial looks challenged due to Auto, Security faces structural headwinds, and Stanley has a LOT of China supply chain exposure as the trade war drags on. Our EPS estimates are 5% below consensus in 2020-21. "
Goldman said SeaWorld is positioned well to compete with Disney's Star Wars attractions providing a long-term share "opportunity."
"We believe that ongoing revenue optimization efforts are still being underappreciated by the market, announced cost cuts will support the bottom-line near-term while efficiency opportunities exist longer-term, and a budding capital allocation story will further enhance shareholder value – yet shares trade at a discount to amusement park peers on EV/EBITDA and screen attractive on FCF yield. Attendance is still well below prior peaks in key markets, providing a long-term share opportunity, and near-term we believe the company is better positioned to compete effectively with Disney's Star Wars attractions than in the past."
Deutsche Bank upgraded LabCorp on increasing optimism about positive contributions from the medical lab operator's Covance contract research unit.
"Our Buy rating reflects an increasingly constructive view on the Covance contract research business, coupled with a belief that risks in Diagnostics now skew to the upside."
Baird said it thinks the show manufacturer will "carry well" into 2020.
"Compelling opportunity following sharp pullback. CROX has been among the hardest hit consumer/retail stocks since the start of May, unjustly so in our view, given signs of continued brand momentum (six quarters growing +double-digits and counting) plus a much better run company overall. We see potential for upside to Q2 estimates and for brand heat to carry well into 2020 given a robust clog/sandal pipeline, planned additional collaborations, and emerging international opportunities. Accordingly, we see relatively limited further downside (valuation <group median) and attractive upside (>50%)."
Baird upgraded the stock and said it was "attractive" at current prices.
"We like KEY shares and find the risk/reward of the stock to be attractive at current prices. While we are cognizant of the yield curve challenges banks are facing, we are of the view that many of the stocks are now discounting a tougher NII outlook, and the short case is tougher to make here. We think KEY stacks up reasonably well given its ~4.4% proforma dividend yield, ~8.5x forward P/E multiple, and relative rate positioning."
Jefferies said it sees "value" in Tesla's technology but that financial performance will remain "volatile" in the near term.
"Fresh from a visit of Fremont, we feel confident demand concern is excessive and industrial efficiency improving. Financial performance should remain volatile in coming quarters as manufacturing and model range expand. We cut estimates and 12-month PT to reflect that. We continue to see value in Tesla's technology lead (powertrain and AV development) and focus on increasingly affordable price points in an industry vs other OEMs in a zero/negative EV sum game."
Baird said it sees several catalysts which could drive Tesla shares "higher."
"Reiterate Outperform rating and raising price target to $355. We like the set-up for the balance of the year, as we think expectations have overshot to the negative and we believe there are several catalysts upcoming which could drive shares higher (beginning with the upcoming delivery release). Additionally, we have noticed bear arguments have preemptively shifted from demand to profitability. A solid Q2 delivery announcement could set up a positive cash flow quarter and set the stage for share appreciation in 2H:19."
J.P. Morgan lowered its price target on the chipmaker due to Huawei component bans amongst other things.
"In advance of the call, we lower our revenue / EPS estimates for MU for F3Q and out quarters, primarily as a result of the component bans to Huawei (13% customer during Micron's F1H19), worse than anticipated DRAM pricing and with expectations of a slower recovery as we look to the back half of this year and into next year on macro uncertainty/trade tensions."