Here are the biggest analyst calls of the day: Snap, ViacomCBS, Etsy & more

Published Fri, Dec 13 20198:58 AM EST

Key Points

JMP Securities upgraded Snap to outperform from perform.
Credit Suisse initiated Sanderson Farms as outperform.
Credit Suisse upgraded Regeneron to outperform from neutral and named it a top pick.
J.P. Morgan reinstated coverage of ViacomCBS as overweight.
SunTrust initiated Etsy as buy.
Bank of America downgraded Hanesbrands to underperform from neutral.
Argus upgraded Bristol-Myers Squibb to buy from hold.

Here are the biggest calls on Wall Street on Friday: JMP Securities upgraded Snap to 'outperform' from 'perform' JMP Securities upgraded the stock and said it was optimistic about Snap's ability to grow its user base. "We are incrementally confident in Snap 's ability to grow its user base, increase engagement given newer products and services, and improve overall monetization as the service attracts more advertisers and share of ad budgets. Importantly, we believe that the organization is now more stable than it was when entering 2019, and as we look into 2020, we believe Snap is well positioned to continue to add DAUs and close the monetization gap with other major social networks as its sales force reorg is now behind it and the company launches new and innovative advertising products." Credit Suisse initiated Sanderson Farms as 'outperform' Credit Suisse said the poultry producer was "well-positioned regardless of industry cycles." "We believe the chicken industry is in the early stages of a rebound in supply-demand dynamics that we expect will boost Sanderson 's EBIT margin from a cyclical low to a prolonged cyclical high ( > 13% by 2021). Chicken companies have come to the end of a three-year period of expansion that USDA forecasts will decelerate the pace of supply growth to 1.8% in 2020. In contrast, domestic per capita demand continues to grow at a consistent pace and export growth is poised to accelerate in response to African swine fever's impact on pork supplies in China." Credit Suisse upgraded Regeneron to 'outperform' from 'neutral' and named it a 'top pick' Credit Suisse upgraded the biotech company and named it a top pick in 2020 and said it was "increasingly constructive" on Regeneron' s "emerging" oncology portfolio. "Heading into 2020, we think the reports of Eylea's demise are somewhat exaggerated. Beovu's PI was not as competitive as we had anticipated and IPI/Medicare Part B changes (while a talking point) are less likely in our view. We think that Eylea execution, layered with progress in the novel oncology platform will drive outsized outperformance vs. peers in 2020." J.P. Morgan reinstated coverage of ViacomCBS as 'overweight' J.P. Morgan reinstated coverage of the stock and said that the new combo of Viacom and CBS had "significantly" greater scale and "cheaper" valuation. "Following a period of restriction, we are moving to an Overweight rating and a December 2020 price target of $50 (Overweight rating and December 2019 price target of $66 prior to restriction) from a Not Rated designation. ViacomCBS emerges from the CBS Viacom merger with significantly greater scale and a cheaper valuation, in our view. On a pro-forma basis, we estimate 2020 EPS of $6.00 and 2021 EPS of $6.50, implying a NTM P/E of around 6x, which we view as providing more than a sufficient margin of safety to find shares attractive here. Near-term catalysts could include an increase to management's initial cost synergy target of $500m, a figure that we believe is very conservative." SunTrust initiated Etsy as 'buy' SunTrust said the online marketplace has "multiple growth and margin drivers." " Etsy connects a large and growing base of users to a vast selection of unique goods from millions of sellers, addressing an opportunity with an estimated TAM of ~$100B. ETSY is 2 yrs into what we think will be 5 yrs of ~20% revenue growth and 500+bps margin expansion, powered by multiple drivers. It's unique 2-sided market place is at the core of the revenue engine and the monetization opportunity at Reverb only adds to the potential for upside, in our view." Bank of America downgraded Hanesbrands to 'underperform' from 'neutral' Bank of America said in its downgrade of the stock that it sees "faster" deceleration for the company's Champion brand. "We are also lowering our PO to $13 from $16. Our revised PO is based on a 7x 2020E EV/EBITDA multiple. We think Champion's strong sales growth has supported HBI 's multiple. We see risk of multiple contraction as Champion sales decelerate from peak levels and the C9 exit from Target constrains 2020 sales and EPS growth. We're lowering our 2019/20 EPS by 2/8c to $1.76/1.74 on a lower sales and margin outlook, including faster deceleration at the Champion brand. We're now modeling a 2% 2020 sales decline and a 10bp op margin decrease with pricing and favorable mix shift, partly offset by brand investments and deleverage on lower sales." Argus upgraded Bristol-Myers Squibb to 'buy' from 'hold' Argus said the biopharmaceutical company is making "solid progress" in advancing key products. "Given recent progress in advancing the combined BMY-CELG pipeline, we now have a more positive view of BMY's post-merger growth drivers. * In particular, BMY is making solid progress in advancing five key products to commercialization. * We are now incorporating Celgene's operations (excluding the divested Otezla) into our financial model for BMY. As such, we are raising our adjusted EPS estimates to $4.35 from $4.27 for 2019 and to $5.70 from $4.47 for 2020. "

Executives of Etsy applaud as they open the Nasdaq MarketSite ahead of Etsy's initial public offering in New York, April 16, 2015.

Michael Nagle | Bloomberg | Getty Images

Here are the biggest calls on Wall Street on Friday:

JMP Securities upgraded Snap to 'outperform' from 'perform'

JMP Securities upgraded the stock and said it was optimistic about Snap's ability to grow its user base.

"We are incrementally confident in Snap's ability to grow its user base, increase engagement given newer products and services, and improve overall monetization as the service attracts more advertisers and share of ad budgets. Importantly, we believe that the organization is now more stable than it was when entering 2019, and as we look into 2020, we believe Snap is well positioned to continue to add DAUs and close the monetization gap with other major social networks as its sales force reorg is now behind it and the company launches new and innovative advertising products."

Credit Suisse initiated Sanderson Farms as 'outperform'

Credit Suisse said the poultry producer was "well-positioned regardless of industry cycles."

"We believe the chicken industry is in the early stages of a rebound in supply-demand dynamics that we expect will boost Sanderson's EBIT margin from a cyclical low to a prolonged cyclical high (>13% by 2021). Chicken companies have come to the end of a three-year period of expansion that USDA forecasts will decelerate the pace of supply growth to 1.8% in 2020. In contrast, domestic per capita demand continues to grow at a consistent pace and export growth is poised to accelerate in response to African swine fever's impact on pork supplies in China."