- Goldman Sachs is lowering its price target on Apple to $165 from $187.
- Wedbush is upgrading Etsy to outperform from neutral.
- Macquarie is upgrading Southwest Airlines to outperform from neutral.
- Citi is downgrading O'Reilly Automotive to neutral from buy.
- Loop Capital is downgrading Broadcom to hold from buy.
Here are the biggest calls on Wall Street on Friday:
Goldman lowered its price target and said it sees a 26% downside to shares due to the company's Apple TV+ trial.
"We believe that Apple plans to account for its 1-year trial for TV+ as a ~$60 discount to a combined hardware and services bundle. This method of accounting will likely result in lower up front ASPs and margins and then higher services revenue growth. Effectively, Apple's method of accounting moves revenue from hardware to Services even though customers do not perceive themselves to be paying for TV+."
Read more about this call here.
Wedbush said in its upgrade that it sees several "new" initiatives at the e-commerce company that will drive growth going forward.
"We upgrade ETSY to OUTPERFORM as we now see a critical mass of new initiatives, highlighted by Etsy Ads and free shipping, that can drive stronger GMS growth and margin expansion over time. We particularly like the timing with both Etsy Ads and free shipping launching into the holiday season supported by Etsy's brand marketing push, where it is seeing early signs of strong ROI on TV and Social."
Macquarie said Southwest will be able to more fully utilize its new revenue management system and more efficiently schedule aircraft once the grounding of its Boeing 737 MAX fleet ends.
"We think that the airline will now be able to fully utilize its new revenue management system and more efficiently schedule its aircraft as the MAX's are ungrounded and reintroduced into their system. We also like Southwest's move to join Travelport and Amadeus Travel Platforms global distribution systems as we think that it gives the airline a new growth platform with small to medium businesses. We've pushed our valuation multiple towards the upper end of their 3 year historical average as we are factoring in the current uncertain economic environment and Southwest's long track record of stable earnings and its strong balance sheet which positions it for a rotation into quality."
Citi downgraded the stock mainly on valuation.
"Although we view O'Reilly as a best-in-class operator with superior supply chain / in-stock rates, strong management expertise and an admirable Pro business, we remain on the sideline because of valuation."
Following the company's earnings report, Loop said it thinks shares will remain range bound until the macro begins to "improve." Broadcom designs, develops, and manufactures semiconductor and infrastructure software products.
"Although Broadcom delivered revenue results that met expectations, with a slight upside to EPS, and the company left its F2019 guidance unchanged, management noted multiple times that unless the current macroeconomic uncertainty improves, Broadcom is expecting to see a very low-growth environment for the foreseeable future. End demand was said to have bottomed, but is expected to remain at these reduced levels for some time."