- KBW upgraded Citi, Goldman Sachs, and Bank of America to outperform from market perform
- BMO downgraded Match Group to market perform from outperform
- Bank of America downgraded Dow to neutral from buy
- Argus upgraded Hasbro to buy from hold
- Credit Suisse downgraded Spirit Airlines to neutral from outperform
- Benchmark upgraded World Wresting Entertainment to buy from hold
Here are the biggest calls on Wall Street on Friday:
KBW said the three banks are best positioned to benefit from an "extended" economic cycle.
"We are upgrading shares of Citigroup, Goldman Sachs, and Bank of America, as we believe these three stocks are best positioned to benefit from an extended economic cycle that has the prospects to grow further—in addition we reiterate our outperform rating for JPM which should see similar benefits as well. We are raising our price target for all Universal Banks and the main driver is higher returns near term as we have pushed out our expectations for when the next downturn will happen and that was positive for near-term return expectations and our price targets. Based on our new price targets, we project total returns of 20.5%, 21.0%, and 23.3% for GS, BAC, and C, respectively, and we believe Outperform ratings are appropriate."
BMO said in its downgrade of Match that secular growth is "increasingly" priced in.
"There is no major change to our fundamental view and we think the 2Q results will be fine, but with the shares up 82% YTD and reaching 25.6x 2020E EV/EBITDA, we believe strong secular growth is increasingly priced in. We believe MTCH should remain a core SMID-cap holding as it remains a great secular growth story with strong FCF support. We also believe the company has ample opportunity in a large and growing TAM."
Bank of America said it saw "pressure" on the maker of plastics and packaging.
"With the macro still soft and supply adequate, we believe pressure on Dow's profitability is likely to remain well into 1H of 2020. Notably absent from the discussion is Dow's polyethylene (PE) business. While we have a more positive view on the outlook for PE, we believe investors can get better exposure through LYB at a lower valuation and with fewer distractions. Subsequently we are lowering our Dow estimates, PO, and rating, now at Neutral from Buy."
Argus upgraded the toymaker and said it demonstrated "strong" results over the last few quarters.
"We are raising our rating on Hasbro to BUY from HOLD and setting a target price of $145. As demonstrated by its strong results over the past two quarters, Hasbro remains a leader in the U.S. toy industry. The company has a range of strong global brands that include Transformers, Nerf, and My Little Pony, and also dominates in the big-screen business, generating revenue from its Disney Princess, Marvel and Star Wars licensed products. In addition, we expect the company to post strong international growth, particularly in the Asia Pacific region and other emerging markets."
Credit Suisse said it saw a tough second half for the airline.
"While there is upside to our revised $51 target price, we step to the sidelines with a view that the stock will be 'dead money' until we lap the tough H2 revenue comps and a better 2020 setup comes into view. We remain constructive on SAVE's longer-term prospects, particularly as it relates to incremental technology/ancillary revenue initiatives, but it will take some time for management to earn back investors' trust."
Benchmark upgraded the stock after the company's earnings and said it expects engagement metrics to "recover" with a new distribution agreement in place.
"We are now optimistic the Firm's engagement metrics should continue to recover, potentially benefiting from the new distribution agreement with Fox, WWE Network re-launch, return of talent/reset of storylines, and new executive leadership at both Raw and Smackdown. We believe the strong 2Q19 print, reiterated FY19 performance view, increased visibility over FY19 execution risk, upcoming new U.S. distribution agreements, activation of the share repurchase authorization ($1M re-purchased/$500M authorization) and a share price 26% off its 52-week high has created an opportunistic entry point, in our view."