Here are the biggest analyst calls of the day: Uber, Dick's, Tesla & more

Published Fri, Oct 25 20197:59 AM EDT

Key Points

Guggenheim is initiating Uber as buy.
Deutsche Bank is downgrading Avis Budget to hold from buy.
Goldman Sachs is upgrading Dick's Sporting Goods to buy from neutral.
Raymond James is downgrading Booking Holdings to market perform from outperform.
Barclays is raising its price target on Tesla to $200 from $150.
Deutsche Bank is naming Goldman Sachs as a catalyst call buy.
Bank of America is initiating Tyson Foods as buy.
Bank of America is initiating Hormel Foods as underperform.
Goldman Sachs is downgrading Target to buy from conviction buy.

Here are the biggest calls on Wall Street on Friday: Guggenheim initiated Uber as 'buy' Guggenheim said Ube r has an underappreciated pricing leverage, among other factors. "1) We look for a more benign competitive scenario to evolve globally with significant cross ownership yielding the potential for consolidation and competitive discipline; 2) We model to 2023 EBITDA with no price increases, but even modest increases could pull that to as early as 2021 and that might get easier to envision if competitive discipline extends beyond the U.S.; 3) Rising prices in the U.S. should fuel a strong 2H for UBER, potentially highlighting the leverage in the model and bringing more aggressive EBITDA scenarios into focus. Challenges remain for sure, but we see UBER at a potential turning point." Deutsche Bank downgraded Avis Budget to 'hold' from 'buy' Deutsche cited softer pricing as well as the pending retirement of the current CEO in its downgrade of Avis . "There are three key pillars of the call: 1) We believe U.S. pricing softened a bit during 3Q, and trends in Europe remained challenged broadly, leading us to below-consensus top- and bottom-line forecasts for 3Q and 4Q; 2) U.S. fleet costs were once again a large tailwind for CAR in 2019, but we anticipate a more-neutral impact as we look out to 2020; and 3) given CEO Larry De Shon's pending retirement at year-end, CAR will be undergoing a natural leadership transition throughout the next 12-18 months." Goldman Sachs upgraded Dick's Sporting Goods to 'buy' from 'neutral' Goldman said it saw a healthy athletic market as well as better service and a more differentiated experience at Dick's stores. "The overall athletic environment appears healthy (rational promotions, innovation from brands) and management's efforts to drive better traffic/conversion (more differentiated experiences and better service) seem to be taking hold. Following the past ~2-3 years of choppy sales trends, DKS returned to positive comp growth in 2Q and we expect momentum to continue in 2H19 (healthy consumer, improved apparel/footwear in-stocks, access to better/exclusive product, and a return to growth in the Hardlines category)." Raymond James downgraded Booking Holdings to 'market perform' from 'outperform' Goldman said the Street appears overly optimistic on revenue growth and profit margins for the operator of Priceline, Kayak, and other travel booking sites. "We are downgrading BKNG from Outperform to Market Perform for three reasons: 1) payoffs from Connected Trip and alternative accommodations are gradual and may weigh on margins near term; 2) Street appears overly optimistic on 2020/2021 revenue growth and margins; and 3) the lack of positive revision potential limits margin expansion. At ~18x 2020E EPS, shares appear fairly valued." Barclays raised its price target on Tesla to $200 from $150 Barclays raised its price target on Tesla and said it saw a "lower" probability of a forced sale. "Given that some of the earnings improvements (e.g., productivity improvements) are likely sustainable, we have increased our probabilistic valuation to $200, from $150 prior. We have lowered the probability of a forced sale, while increasing the earnings potential in our 'stalled' and 'baseline' scenarios." Deutsche Bank named Goldman Sachs as a 'catalyst call buy' Deutsche said it sees new disclosures and financial targets coming from the company in early 2020 among other things. "We believe GS shares should be viewed favorably on two near-term catalysts--1) a potential resolution (for less than originally feared) of a regulatory issue that has been a negative overhang on the stock, and 2) new disclosures and financial targets coming in a strategic update in Jan 2020." Bank of America initiated Tyson Foods as 'buy' Bank of America said Tyson's protein offering is the most "complete" of the U.S. protein players. " TSN is the largest US protein processor with #1 market share in both broiler (chicken) and beef production and #3 in pork. TSN is also a large packaged food player through its 2014 Hillshire acquisition. In our view, TSN's protein offering is the most complete of the US-based protein players, providing ample levers to drive earnings growth over our forecast period." Bank of America initiated Hormel Foods as 'underperform' Bank of America said in its initiation note that it had concerns about risks related to African Swine Fever among other things. " HRL is a leading producer of value-add pork products, turkey, simple meals, nut butters and Mexican foods with a focus on branded/value-add products versus commodity meats. In our view, input cost risk related to African Swine Fever (ASF) and HRL's exposure to pork as an input cost (largest within our coverage) keeps us cautious in the near/medium term." Goldman Sachs downgraded Target to 'buy' from 'conviction buy' Goldman removed Target from its conviction buy list mainly on valuation. "We remove TGT from the Americas Conviction List, but maintain our Buy rating. With the stock up 4% over the past month (+67% YTD) vs. the S & P500 flat, we believe investor expectations already seem to be pricing in more of TGT's progress (and risk could be skewed slightly to the downside if investors are looking for a 3Q earnings beat on par with 2Q)."

Dara Khosrowshahi, CEO of Uber Technologies, speaks during an Economic Club of Washington event in Washington, DC, June 11, 2019.

Saul Loeb | AFP | Getty Images

Here are the biggest calls on Wall Street on Friday:

Guggenheim initiated Uber as 'buy'

Guggenheim said Uber has an underappreciated pricing leverage, among other factors.

"1) We look for a more benign competitive scenario to evolve globally with significant cross ownership yielding the potential for consolidation and competitive discipline; 2) We model to 2023 EBITDA with no price increases, but even modest increases could pull that to as early as 2021 and that might get easier to envision if competitive discipline extends beyond the U.S.; 3) Rising prices in the U.S. should fuel a strong 2H for UBER, potentially highlighting the leverage in the model and bringing more aggressive EBITDA scenarios into focus. Challenges remain for sure, but we see UBER at a potential turning point."

Deutsche Bank downgraded Avis Budget to 'hold' from 'buy'

Deutsche cited softer pricing as well as the pending retirement of the current CEO in its downgrade of Avis.

"There are three key pillars of the call: 1) We believe U.S. pricing softened a bit during 3Q, and trends in Europe remained challenged broadly, leading us to below-consensus top- and bottom-line forecasts for 3Q and 4Q; 2) U.S. fleet costs were once again a large tailwind for CAR in 2019, but we anticipate a more-neutral impact as we look out to 2020; and 3) given CEO Larry De Shon's pending retirement at year-end, CAR will be undergoing a natural leadership transition throughout the next 12-18 months."