- Guggenheim is downgrading Monster Beverage to neutral from buy.
- Credit Suisse is upgrading Spotify to neutral from underperform.
- Jefferies is initiating Live Nation as buy.
- Barclays is downgrading TD Ameritrade, E-Trade, & Charles Schwab to underweight from overweight.
- Bernstein is downgrading Activision Blizzard to market perform from outperform.
Here are the biggest calls on Wall Street on Wednesday:
Guggenheim said its downgrade that it thinks the stock will be "range bound" for the next 6-9 months.
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"We are downgrading Monster to NEUTRAL (from BUY) given our view that the stock will be range bound for at least the next 6 to 9 months until the market can better gauge the impact on Monster from the planned January launch of Coca-Cola Energy in the US. In Europe, the longer-term implications of the launch are still largely unknown, but we are seeing some early signs of softness for Monster (along with a broader category slowdown) in Great Britain and Germany."
Credit Suisse said the "narrative" for a third quarter subscriber "miss" is priced in.
"A negative narrative has gained momentum since the summer, driven by 1) third party data sources suggesting subscriber shortfalls; 2) Spotify's move in August to increase the free trial period from 1 month to 3, which has supported fears of negative subscriber trends; 3) the realization among investors that near-term podcasting investments will not be offset by potential '2-sided marketplace' revenue, which is longer-term in nature; and 4) time spent listening to podcasts is not getting carved out of premium plan content costs during label renewals, damaging a bull case for improving margins."
Jefferies said in its initiation note of the events promoter and venue operator, that it likes the company's strong growth and execution as well as support from new acquisitions.
"While growth is plentiful, the trajectory of LYV will likely be determined by two main aspects: 1) continued accretive acquisitions - expect plenty though not in our model yet; and 2) continued per-fan growth - expect to be multi-year opportunity and achievable. Ultimately, we believe consistent low-double-digit AOI growth, strong execution record, and upside from acquisitions support a premium valuation."
Barclays double downgraded TD Ameritrade, Charles Schwab, & E-Trade after TD Ameritrade and Charles Schwab announced a $0 commission on stocks, ETF's & options.
"We lower FY20 EPS by 12% (SCHW) to 30% (ETFC/AMTD) following AMTD's and SCHW's announcement of $0 commission on stocks, ETFs, & options and think ETFC will have to follow. There are downside uncertainties to EPS and while better than modeled OpEx offsets are absolutely possible, the bigger concern is around the "right" multiple to put on these businesses. They've become more rate sensitive in nature which is lower quality in this poor macro tape."
Bernstein said in its downgrade that it cannot reconcile the current stock price with company fundamentals after a 25 percent rally since late May.
"Ever since the bloom came off the video game publisher rose last year, the ATVI Bull case has been 'hope'. 'This is the trough, things can only get better, buy the stock.' Positive expectations around CoD Mobile and WoW Classic have catalyzed the hope, and cast a halo across the pipeline. ATVI has rallied +25% since May 25. We believe the market is paying too much for the hope."