Here are the biggest analyst calls of the day: Roku, Wells Fargo, Biogen & more

Published Mon, Dec 2 20199:15 AM ESTUpdated Mon, Dec 2 20199:26 AM EST

Key Points

Morgan Stanley downgraded Roku to underweight from equal weight.
Raymond James downgraded Wells Fargo to underperform from market perform.
Morgan Stanley downgraded Dow to equal weight from overweight.
Baird downgraded Biogen to underperform from neutral.
Leerink initiated GlaxoSmithKline as outperform.
Bank of America downgraded Deere to underperform from neutral.
Stifel resumed coverage of Western Digital as hold.
Citi upgraded Altria to buy from neutral.

Here are the biggest calls on Wall Street on Monday: Morgan Stanley downgraded Roku to 'underweight' from 'equal weight' Morgan Stanley said in its downgraded that revenue and gross profit growth will slow meaningfully in 2020. " Roku continues to execute a sound strategy to capitalize on the shift to streaming. However, we believe there are risks to growth expectations not reflected in current valuation levels. Specifically, we think revenue and gross profit growth slow meaningfully in '20 and the multiple compresses." Read more about this call here . Raymond James downgraded Wells Fargo to 'underperform' from 'market perform' Raymond James downgraded the stock and said the company has a "stigma" surrounding the phony accounts scandal which occurred over 3 years ago. "We are reducing our rating on shares of Wells Fargo to Underperform from Market Perform. Recall that we had an Underperform rating on the stock from October 4, 2016 through March 29, 2019. With another reduction to our EPS estimates, placing us 4.2% below consensus for 2020 and 6.7% below consensus for 2021, we believe negative EPS revisions will provide a headwind for Wells Fargo's shares. ... Stigma around Wells Fargo's reputation will likely continue in the near future and remain a headwind for the bank's operational performance." Read more about this call here . Morgan Stanley downgraded Dow to 'equal weight' from 'overweight' Morgan Stanley downgraded the commodity chemical company and said it didn't see "meaningful improvement" in 2020. "Our Dow thesis that dividend yield would ultimately predominate over EV/EBITDA has now played out. While we do not expect pet chem green shoots in 2020, we believe investors should own one commodity name. We choose LYB for PE exposure (where the market is too bearish) and div yield/buybacks." Baird downgraded Biogen to 'underperform' from 'neutral' Baird downgraded the biotech company and said it sees a "negative" catalyst in the company's Clinical Trials on Alzheimer's Disease. "While investors battle the FOMO into a regulatory decision that is likely a year away, we think it is underappreciated that CTAD could serve as meaningful negative catalyst for BIIB shares, as we think the hype around AD will descend into broader critique of the full data set and Biogen's decision to file on it. We expect this will only exacerbate concerns around the 2020 launch of risdiplam and its impact on Spinraza as well as the ongoing Tecfidera IP battles." Leerink initiated GlaxoSmithKline as 'outperform' Leerink initiated the stock as outperform and said it expects the biopharma company's profitability to improve in 2021 and "beyond." "We are initiating coverage of GlaxoSmithKline with an Outperform rating, and a price target of £21 on the company's stock and $53 for the company's ADR. Our price target is 20% above the recent stock price, which has rallied along with many of its biopharma peers. Our revenue forecast is 6% above consensus for 2020E and then 6-7% above consensus for 2021E and 2022E. By 2024 we expect GSK to generate revenue of £43bn (+26% vs 2019 including consumer), and EPS of £1.66/share." Bank of America downgraded Deere to 'underperform' from 'neutral' Bank of America downgraded the company after its "disappointing" earnings outlook "We downgrade Deere post a disappointing earnings outlook that we view as more realistic than conservative. WeThe set-up on agriculture into next year is very challenging, and there is no guarantee that FY20 is necessarily the bottom if US farmers respond with higher corn and soybean plantings. Deere also seems late in cutting production on construction equipment." Stifel resumed coverage of Western Digital as 'hold' Stifel said it sees "some tailwinds" for the stock emerging and that the data storage company has a "high" debt load. "We are resuming coverage of Western Digital with a Hold rating on the shares and a $53 target price, which reflects 1.3x EV/sales of our FY21 estimate and is the average multiple of the past five years. Although we believe there are some tailwinds for the company emerging, we admit we have some more fundamental questions as it relates to Western Digital versus Seagate. We believe the technology roadmaps in both HDD and NAND flash need to be monitored, particularly as the competitive landscape drives their own technology roadmaps as well." Citi upgraded Altria to 'buy' from 'neutral' Citi upgraded the tobacco company to buy and said it sees Altria on a more "sustainable" path. "We now recommend that investors switch from PM into MO . We feel MO's multiple can increase because investors will feel more comfortable that it is on a sustainable path. By contrast we expect PM's higher multiple to be maintained rather than expand because its virtues are well known. We also have greater conviction on Imperial and BAT."

Anthony Wood

Source: CNBC

Here are the biggest calls on Wall Street on Monday:

Morgan Stanley downgraded Roku to 'underweight' from 'equal weight'

Morgan Stanley said in its downgraded that revenue and gross profit growth will slow meaningfully in 2020.

"Roku continues to execute a sound strategy to capitalize on the shift to streaming. However, we believe there are risks to growth expectations not reflected in current valuation levels. Specifically, we think revenue and gross profit growth slow meaningfully in '20 and the multiple compresses."

Raymond James downgraded Wells Fargo to 'underperform' from 'market perform'

Raymond James downgraded the stock and said the company has a "stigma" surrounding the phony accounts scandal which occurred over 3 years ago.

"We are reducing our rating on shares of Wells Fargo to Underperform from Market Perform. Recall that we had an Underperform rating on the stock from October 4, 2016 through March 29, 2019. With another reduction to our EPS estimates, placing us 4.2% below consensus for 2020 and 6.7% below consensus for 2021, we believe negative EPS revisions will provide a headwind for Wells Fargo's shares. ... Stigma around Wells Fargo's reputation will likely continue in the near future and remain a headwind for the bank's operational performance."