- William Blair is initiating Five Below as outperform.
- Nomura Instinet is initiating Etsy as buy.
- Wedbush is initiating Domino's Pizza as outperform.
- J.P. Morgan is downgrading CSX to neutral from overweight.
- Morgan Stanley is upgrading Snap to equal weight from underweight.
- Citi is adding a positive catalyst watch to Applied Materials.
- Melius Research is initiating DuPont as overweight.
Here are the biggest calls on Wall Street on Friday:
William Blair initiated Five Below and said it thinks the discount retailer offers a "fun, differentiated" shopping experience for kids, teens, and their parents.
"The stores feature smallstore convenience, extreme value on both discretionary and basic items (most priced $5 or less, and considerably below the competition on identical items, as evidenced in our proprietary research), and a treasure-hunt appeal with a regularly changing and highly edited/curated assortment across eight distinct merchandise "worlds" all under one roof (unique within retail, in our estimation)."
Nomura said in its initiation note that it liked the online crafts marketplace operator's execution and pricing strategy.
"Etsy is the leading marketplace for unique craft and vintage goods, with consistent management execution since 2017 that has reaccelerated the business through enhanced pricing mechanisms while educating and arming sellers with the right tools to succeed. Etsy has proven that the large conglomerate platforms don't always win, especially when the category is anything but a commodity."
Wedbush said in its initiation note that the company had a "compelling" financial model and that market sentiment toward Domino's is overly "negative."
"We view DPZ's financial model as among the most compelling in the publicly traded restaurants universe. We believe sentiment is overly negative in the near-term and we view the current intensity of third party delivery's intrusion as unsustainable."
J.P. Morgan downgraded the rail transportation company and said it had concerns about tariffs and the "durability" of the U.S. consumer among other things
"We are downgrading CSX to Neutral after a tremendous run which put its Train & Engine productivity above long-haul Western rails, leaving fewer offsets to dampen the impact of losing high margin export coal volume and demurrage revenue. UNP continues to screen more favorably with easy volume and operating comps providing a more stable environment to generate consistent T&E productivity gains in the second year of the UP 2020 plan."
Morgan Stanley said in its upgrade that it saw faster ad revenue growth and improved discipline in managing operating expenses.
"At a high level, year-to-date we have underestimated SNAP's stronger top and bottom-line execution and ability to drive growth and upward revisions. We are raising our forward revenue and EBITDA and now find ourselves 7%/11% ahead of Street '20/'21 revenue and are meaningfully above on EBITDA as well."
Citi said it expected the stock to outperform and added a positive catalyst watch to the company which provides equipment, services and software for the manufacture of semiconductor chips for electronics.
"We are adding a positive catalyst watch on AMAT heading into the earnings season and expect stock to outperform the group on a relative basis. Recent US marketing meetings indicate investors are looking to hide into stocks through the year end where a) Sep/Dec-Q Street estimates look conservative, and b) stock has lagged the group in outperformance amidst macro US PMI contraction concerns."
Melius said in its initiation note that the stock is close to a bottom with various negative factors priced in.
"Shares have struggled in the company's first 4 months as a standalone entity amidst a sloppy short cycle macro environment and a steady drumbeat of negative headlines around environmental liabilities. All while consensus forecasts have continued to fall. But after a year of negative earnings revisions, and a stock that seems to discount a lot of bad stuff, we think we are close to the bottom. DuPont has the potential to be one of the big 2020 stories in industrials if (perhaps when) shorter cycle names come back into favor."