- Raymond James is upgrading KB Home, Lennar, & Toll Brothers to outperform from market perform.
- Jefferies is raising its price target on Chipotle to $820 from $700.
- Goldman Sachs is raising its price target on Nvidia to $192 from $179.
- Evercore ISI is raising its price target on Nike to $150 from $120.
- Benchmark Company is initiating Comcast as buy.
Here are the biggest calls on Wall Street on Wednesday:
Raymond James said in its upgrade of the home builders that it was anticipating that upcoming earnings reports will show improved housing market fundamentals.
"We are making a preemptive move to upgrade three homebuilders (KBH, LEN, TOL) ahead of upcoming earnings announcements that we believe will reveal decidedly improved housing fundamentals and potential upside to current consensus FY20 estimates. .. .In our view, the August data demonstrated a decided (and perhaps under-appreciated) inflection in supply and pricing conditions, revealing a far more bullish backdrop for homebuilders into year-end."
Chipotle raised its price target on Chipotle as it said the company has a "not-yet-fully unlocked" Rewards opportunity, as well as "strong brand equity."
"We continue to appreciate CMG's brand reinvigoration, and believe the rebuilt mgmt team & various strategic initiatives provide a long runway for growth ahead. However, this is already reflected in the stock, +83% YTD vs. S&P +20%. We raise our PT to $820, or 25x our '20 EBITDA, in line with historical peak valuation."
Goldman Sachs said it was bullish on Nvidia's gaming and datacenter business.
"While the competitive landscape in the gaming GPU business may prove marginally more challenging this 2H versus recent years, we expect the company to deliver strong sequential growth in FY3Q in the Gaming segment supported by the normalization in channel inventory and the launch of its new products. In the medium- to long-term, the emergence of cloud gaming and any impact it may have on PC gaming growth will likely remain top of mind for many investors; however, comments from Gigabyte/MSI appear to support our view that latency alone will be a bottleneck for broad-based adoption among Nvidia's target customer base."
Evercore said it was impressed with Nike's earnings report and called it "stellar."
"NKE's stellar 1Q performance represented the sixth straight quarter of at least +8% sales growth and +50 bps GM expansion, fundamentals much more characteristic of a brand doing 1/10th or 1/100th of Nike's $40bn in revenues. While shares are indicating a strong +MSD% open tomorrow on these solid headline metrics, we were actually most impressed by two other key metrics which underpin our view that the world's single largest apparel and footwear brand can actually also still be one of the best growth stories in all of Consumer."
Benchmark said that Comcast's various business units including networks and parks, were "uniquely" positioned.
"We believe that the triad of Comcast's U.S. cable business, NBCUniversal studios, networks and parks and its nearly one-year owned Sky European business is uniquely positioned to benefit from 1) fixed and wireless/mobile broadband growth, 2) direct-to-consumer alternatives to complement familiar linear channel bouquets, and 3) advanced advertising that delivers quantifiable efficiencies to corporate clients. We believe this equates to a roughly 7% or more Adj. EBITDA growth CAGR through 2023, driving low teens annual Adj. EPS growth assuming resumed buyback activity in 2020."
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.