- MKM said World Wrestling Entertainment has the "best multi-year growth potential" in the firm's entertainment coverage.
- Cowen named AstraZeneca a top pick for 2020 and said the company's low relative exposure to the U.S. makes it less vulnerable during the upcoming election cycle.
- Craig-Hallum said PayPal is primed to help retailers' Walmart and Target better compete against Amazon.
- Bernstein called Mondelez a "solid standalone" investment and laid out its "Blue Sky" scenario for the company.
- Canaccord called Penumbra a "top, long-term" pick and said the stock has everything an investor should want.
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Here are some of the best analyst calls on Wall Street this week:
MKM reiterated its buy rating on World Wrestling Entertainment this week. The analyst said the company has the "best multi-year growth potential" within the firm's media and entertainment universe. The company is also armed with a brand new television contract and international deals, which the firm expects to lead to accelerated subscriber growth.
"A series of meetings we hosted last week with WWE management reinforced our view the company has the best multi-year growth potential within our Media & Entertainment universe. WWE is at a financial inflection point with its new, five-year domestic TV rights contract for Raw and Smackdown having commenced this quarter and its largest international deals beginning in 1Q20. Furthermore, the WWE Network is repositioned for a reacceleration in subscriber growth as a result of multiple new initiatives planned over the coming year. ... 2020-2024 has multiple catalysts with sizable potential."
Cowen named AstraZeneca a top pick for 2020 this week and said the multinational pharmaceutical company has all the "attributes" need to be a "top" performer next year. In addition, the analyst says the company has "low relative exposure" to the U.S. and is "less vulnerable" to election rhetoric. The firm also said the company has "opportunity for upside" and many "promising" new products in the pipeline.
"AZN product momentum and high relative growth are not unrecognized. However, drug stocks with these characteristics can outperform for extended periods as management executes, and there is opportunity for upside as forecasts are below AZN guidance/ambitions. Low relative exposure to U.S. makes AZN less vulnerable to election rhetoric. These attributes should drive AZN to top performance in 2020."
PayPal is aiding retailers that are making the necessary technology investment to help better compete against Amazon, according to Craig-Hallum. While the analyst says Amazon is still the dominant online retailer he also said that the e-commerce giant doesn't have the "lock" on online sales that is often believed. The analyst also points out that according to reports, Walmart and Target are growing faster in eCommerce this year than Amazon. Craig-Hallum said PayPal can take advantage of the fact that non-Amazon retailers' accept the company's payment while Amazon doesn't.
"We also expect PayPal to benefit from non-Amazon retailers' significant investment in online sales and digitally originated sales capabilities that more effectively compete against Amazon than in years past. This year we have seen WMT and TGT both growing their e-Commerce sales growing significantly faster than Amazon's 1st party sales. A number of sources have shown online social media mentions putting BBY, WMT and TGT right in the mix with AMZN and retail experts noting they are well positioned. We believe that not all investors fully appreciate that increased disclosures by Amazon this year caused online sales market share estimates to be revised to 38% from 47% by eMarketer. While still the dominant online retailer, Amazon does not have the lock on online sales that is often perceived."
Bernstein laid out it's "Blue-Sky" scenario for Mondelez in a note to clients this week. The firm called the multinational food and beverage holding company a "solid standalone" investment and said it sees a $78 stock in three years. Bernstein said the company has a large exposure to the "faster-growing" snacking category and also believes a merger with Pepsi's snack business would be a winning combination.
"Mondelez represents a solid standalone investment. With ~80% exposure to the faster-growing snacking category and close to 40% of sales in emerging markets, Mondelez has the potential to grow the top-line at ~4% based on its category and geographic exposures. Meanwhile, adding deal-making to the equation could represent additional upside for Mondelez. Should Mondelez's sales momentum taper off as it faces tougher comps in FY20, this could attract renewed interest from activist investors, who may push for a combination of Mondelez and Pepsi's snack business to unlock additional value for shareholders."
Canaccord Genuity said Penumbra is one stock that has it all. Simply put, the healthcare company focused on interventional therapies has checked all the boxes since its 2015 IPO, according to the analyst. The firm said it was impressed by the company's recent analyst day where it laid out a path for "long-term" growth including innovation and total addressable market among other things.
"When one goes about choosing which stock(s) warrant long-term investment, we doggedly argue for a specific algorithm: TAM, innovation, margins, management/people, valuation and catalysts. Since its IPO in late 2015, PEN has checked these boxes, emphatically. Coming out of its inaugural analyst/investor day, nothing has changed. Stocks go up and stocks go down (obviously) and we recommend investors add to PEN positions on any pullbacks, especially in light of the "pause" call being made by our outstanding strategist, Tony Dwyer. ... For us, PEN remains a top, long-term pick in med-tech."