- Goldman Sachs initiated Fiat Chrysler as sell
- Evercore ISI downgraded MetLife to in line from outperform
- Evercore ISI downgraded Aflac to underperform from in line
- KeyBanc initiated Slack Technologies as overweight
- UBS raised its price target on Micron to $47 from $37
Here are the biggest calls on Wall Street on Tuesday:
Goldman said FCA has a limited opportunity for North American earnings growth and that other segments of the company's business face challenges.
"We initiate with a Sell and price target of €11.5 (ADR US$13.5), giving 7% downside. We see limited scope for further earnings growth from North America, while other segments of the business face challenges. We do not believe consensus fully reflects this: our 2019E EBIT/EPS are 8%/5% below."
Evercore downgraded the insurer and said it sees "potential pressure" from free cash flow in 2020 amongst other things.
"While MET produced a strong underwriting quarter in 1Q19 and the stock has responded favorably, and now trades at a premium to most peers on a price to free cash flow basis, we see the accumulation of a broad list of moderate risk factors as reasons for why the stock is unlikely to materially outperform peers over the next 12 to 18 months, including: 1) Potential 3Q balance sheet review charges, 2) LTC risk, 3) Potential pressure on FCF in 2020, 4) Potential weakness in Japan FX sales, 5) Potential goodwill impairment, and 6) Above average NII vs fee income."
Evercore said that Aflac will see "modest downward pressure" from challenges in Japan amongst other things.
"We think there will be modest downward pressure on current consensus EPS estimates driven by challenges in Japan including both subdued sales and revenues, as well as negative interest rate impacts as interest rates are likely to remain lower for longer there and are currently negative/declining and the potential impact on its US floating rate portfolio relative to its planned assumptions from the dovish shift on monetary policy from the Fed."
KeyBanc said Slack's service has redefined digital workplace communications and that its revenue could grow beyond $3 billion in 5 years and $10 billion within 10 years.
"By pioneering a new product category to challenge e-mail as the primary method for digital communications, Slack channels have redefined digital work, quickly expanding to 95K paid customers and a revenue run-rate of $539M in a short span of five years. We are initiating coverage of WORK at Overweight based on the potential to become an automation platform for the middle-office where revenue could eclipse $3B within five years and $10B within ten years."
UBS raised its price target but said 2020 remains a "transition" year for Micron.
"We get the near-term stock reaction to geopolitical (Japan/Korea) and competitor production issues, but given the historically strong correlation between the stock and gross margins, it is just hard to believe the stock is off to the races unless margins are snapping higher."