Investing

Here are the biggest analyst calls of the day: Beyond Meat, Twilio, US Steel & more

Key Points
  • Barclays is initiating Beyond Meat as overweight.
  • Bernstein is downgrading Costco to underperform from market perform.
  • Macquarie is downgrading U.S. Steel to underperform from outperform.
  • Morgan Stanley is upgrading Twilio to overweight from equal weight.
  • Oppenheimer is initiating Denny's as outperform.
  • Evercore ISI is downgrading Brown-Forman to underperform from in-line.
Denny's waitress delivers free Grand Slam breakfasts to customers
Justin Sullivan | Getty Images

Here are the biggest calls on Wall Street on Thursday:

Barclays initiated Beyond Meat as 'overweight'

Barclays said Beyond Meat is "not your typical meat company" and said the company was "well-positioned" into the future.

"We see Beyond Meat as a well-positioned company with the potential to capture a significant share of the alternative meat market; we estimate that BYND could reach a 4.5% market share of the global alternative meat industry, which itself could represent 10% of the global meat industry within a decade, according to our analysis."

Read more about this call here.

Bernstein downgraded Costco to 'underperform' from 'market perform'

Bernstein said in its downgrade of the stock that the company's valuation is still too "high."

"We also see fundamental risks to the pace of COST's US and international growth due to membership exhaustion, US saturation and international delays. In the US we see (1) new competitive pressure as they near peak club counts, members per club, and revenue per member, (2) a possible downturn catalyst big enough to cause members to reevaluate spend and membership fees, and (3) potentially more aggressive competitor offerings in Convenience or Service that draw away members in new ways."

Read more about this call here.

Macquarie downgraded U.S. Steel to 'underperform' from 'outperform'

The steelmaker cut its current quarter guidance and Macquarie said in its double downgrade that it expects steel prices to stay "weak."

"We lower our target price from $18/sh to $9/sh and downgrade X from Outperform to Underperform, as we expect steel prices to stay weak and the company's cash flow to be under pressure in a weak pricing environment."

Morgan Stanley upgraded Twilio to 'overweight' from 'equal weight'

Morgan Stanley said the cloud communications company has a "strong platform and vision."

"Twilio is building out a next-gen communication platform, with multiple expansion markets still in their infancy. .. .We think Twilio has a significant opportunity in front of it, with an experienced management team, a strong platform and vision. We think the recent pullback misses that new applications growth can help extend the growth period for the name and help long term margin profile."

Oppenheimer initiated Denny's as 'outperform'

Oppenheimer called Denny's a "compelling" investment story.

"Its transformative refranchising initiative unlocks significant capital returns, elevates its FCF profile and improves the unit growth outlook. At the same time, fundamentals appear healthy with attractive SSS catalysts in place to sustain outperformance against the industry. Despite being up 59% since October 2018 and trading at an elevated valuation, we are positive on the upside potential from the model transformation and strengthening earnings growth."

Evercore ISI downgraded Brown-Forman to 'underperform' from 'in-line'

Evercore downgraded Brown-Forman and said while the spirits producer is a well-run company with iconic brands, it is a "valuation outlier."

"While we can't point to a catalyst for the stock to move lower, and acknowledge that comps get easier over the next few quarters and the firm is launching Jack Daniel's Apple next month, we recommend that investors consider lightening positions. Establishing 12-month price target of $60, based upon 3% levered FCF yield on 2020."