Here are Tuesday's biggest analyst calls: Johnson & Johnson, Boeing, Micron & more

Published Tue, Dec 17 20199:18 AM EST

Key Points

J.P. Morgan lowered its price target on Boeing to $370 from $400.
Morgan Stanley upgraded Johnson & Johnson to overweight from equal weight.
Jefferies initiating Madison Square Garden as buy.
Wells Fargo raised its price target on Goldman Sachs to $280 from $240.
Cowen upgraded Guess to outperform from market perform.
Goldman Sachs downgraded Groupon to sell from neutral.
Cowen raised its price target on Apple to $325 from $290 .
RBC downgraded D.R. Horton to underperform from sector perform.
RBC downgraded Lennar to sector perform from outperform.
Wedbush upgraded Micron to outperform from neutral.
Bank of America added UPS to its "U.S. 1 list."
Argus downgraded Yum Brands to hold from buy.

Here are the biggest calls on Wall Street on Tuesday: J.P. Morgan lowered its price target on Boeing to $370 from $400 J.P. Morgan lowered its price target and said it that even though production of the 737 Max has been halted, the company is still burning over $1 billion a month. "Boeing's MAX announcement leaves many questions unanswered but that was probably inevitable, given the difficulty of forecasting how the aircraft will return. Some of these questions include 1) the duration of the halt, 2) the production pace post-halt, 3) the timing of re-certification, 4) the delivery pace after reaching that milestone, and 5) how Boeing will support the supply chain during the halt, with uncertainty on these topics leaving a broad range of outcomes for modeling." Read more about this call here . Morgan Stanley upgraded Johnson & Johnson to 'overweight' from 'equal weight' Morgan Stanley said it sees the company's defensiveness returning as well as outperformance in 2020. "The J & J investment thesis is looking more attractive in 2020 as (1) multiple regulatory actions aimed at controlling pharma pricing are more reflected, (2) Pharma growth likely accelerates in 2020 which historically has lifted the multiple and (3) the portfolio is now more balanced with Consumer stabilizing and MD & D coming off six consecutive quarters of momentum improvement." Jefferies initiating Madison Square Garden as 'buy' Jefferies initiated MSG and said it liked the company's "growth" potential. "In our view, the prospective spin highlights the previously obscure asset value, growth potential, and sports betting optionality of both entities. SportsCo's stability and future optionality become clearer, as do EntertainmentCo's real estate value and events growth, despite near-term volatility on competition and Sphere discourse. Our proprietary SOTP derives a PT of $370 in the context of our positive thesis on experiential leisure. " Wells Fargo raised its price target on Goldman Sachs to $280 from $240 Wells Fargo said the outlook for Goldman was improved after a year of transition, including investments and new management. " Goldman 's outlook is better after a transition year with new management and investments. Its first investor day (Jan. 29) should shed light on what's sometimes been a black box and showcase talent, tech and targets. Likely near-term 1MDB resolution should help, too. We increase ests. to about 1/10th above consensus for 4Q19 and 2020 and price target from $240 to $280." Cowen upgraded Guess to 'outperform' from 'market perform' Cowen upgraded the stock and said it liked the new emphasis by Guess on free cash flow and profit margins. "We are raising our price target to $26 and upgrading to Outperform based on conservative consensus estimates and management's focus on margins and free cash flow relative to a past focus on store growth and market share. Competitive risks are reflected in the free cash flow multiple of 10x FY21 and 7x management's FY25 target." Goldman Sachs downgraded Groupon to 'sell' from 'neutral' Goldman Sachs downgraded the stock and said it had concerns about customer declines in North America. "We downgrade Groupon to Sell from Neutral, as we see downside to 2020/2021 FactSet consensus estimates due to execution risks in the North America business model transition and a negative inﬂection in International customer trends. Despite GRPN's investments to improve the customer experience, North America realized 7 consecutive quarters of customer declines since 1Q18. North America continues to experience trafﬁc headwinds, which should result in ongoing North America revenue, billings, and gross proﬁt declines in 2020/21." Cowen raised its price target on Apple to $325 from $290 Cowen raised its price target on the stock and said it was bullish on the upcoming 5G cycle. " AAPL started the year with a surprise negative pre-announcement that was followed by C1H19 bearish sentiment on the stock due to slowing iPhone units, lack of a clear 5G strategy, and US-China trade tensions. That sentiment turned positive in C2H19 when investors started looking into the upcoming iPhone 5G cycle, and overall growth in Services. Besides management executing on the buyback program, the stock became a self-propelling story with the passives/ETF's buying it and leading active managers to move to equal weight in order to not underperform their benchmark. We believe this dynamic is still in play." RBC downgraded D.R. Horton to 'underperform' from 'sector perform' RBC downgraded the home builder on "rising entry-level" competition. "We expect growth to remain healthy in '20, but expect DHI will grow largely in-line with peers as it faces relatively more difficult comparisons (absorption already running at very strong levels and less of an incremental mix benefit) and rising entry-level competition. DHI has already guided to a strong 21% GM, which may be achievable but we see little room for upside from these margin levels." RBC downgraded Lennar to 'sector perform' from 'outperform' RBC downgraded the stock mainly on valuation. "We are downgrading LEN to Sector Perform from Outperform, and slightly lowering our PT to $62 from $63, as we now see LEN trading closer to fair value with only modest upside potential no longer warranting an Outperform rating." Wedbush upgraded Micron to 'outperform' from 'neutral' Wedbush said in its upgrade of the stock that it saw an improved pricing environment for memory chips. "We don't expect meaningful upside to FQ1 given continued downwards moves in DRAM and mixed fundamentals in NAND. Given Micron's history of providing cautious guidance, we expect MU 's FQ2 outlook to also be muted/in-line with Street. The basis for our OUTPERFORM rating is due to an improving memory dynamic: NAND pricing, SSDs in particular, should inflect upwards in FQ1; generally speaking, we believe periods of positive pricing change are the best periods to own memory stocks." Bank of America added UPS to the 'U.S. 1' list Bank of America said it sees solid upside if the company can meet its expectations for improvement. It has added UPS to its "U.S. 1 list" of conviction buys. "We increase our multiple slightly given accelerating ecommerce benefits and improved cost structure. UPS' shares are trading at 14.6x our 2020 EPS estimate, below the bottom of its 19-year one-standard deviation 15x-23x historical range, and 3.5 turns below the S & P500. Our target moves 1.5 points above its historical floor. UPS ' shares are down 11% from its Jan. 12, 2018 high, but up 22% YTD." Argus downgraded Yum Brands to 'hold' from 'buy' Argus downgraded the fast food corporation on intensifying competition among other things. "The YUM shares have posted a nearly 50% total return since our upgrade to BUY on May 16, 2017. Pizza Hut's revenue will likely be hurt by competition from such delivery services as GrubHub and UberEats and difficulties related to its greater emphasis on off-premise orders (carryout and deliveries). As such, we expect Pizza Hut's recent flat same-store sales to continue throughout 2020. Reflecting higher G & A costs as a percentage of revenue, we are lowering our 2019 EPS estimate to $3.75 from $3.80 and our 2020 estimate to $4.20 from $4.30. However, both estimates remain above consensus."

Boeing Chief Executive Dennis Muilenburg speaks during a press conference after the annual shareholders meeting at the Field Museum on April 29, 2019 in Chicago, Illinois. Boeing announced earnings fell 21 percent in the first quarter after multiple crashes of the company's bestselling plane the 737 Max. (Photo by Jim Young-Pool/Getty Images)

Jim Young | Getty Images News | Getty Images

Here are the biggest calls on Wall Street on Tuesday:

J.P. Morgan lowered its price target on Boeing to $370 from $400

J.P. Morgan lowered its price target and said it that even though production of the 737 Max has been halted, the company is still burning over $1 billion a month.

"Boeing's MAX announcement leaves many questions unanswered but that was probably inevitable, given the difficulty of forecasting how the aircraft will return. Some of these questions include 1) the duration of the halt, 2) the production pace post-halt, 3) the timing of re-certification, 4) the delivery pace after reaching that milestone, and 5) how Boeing will support the supply chain during the halt, with uncertainty on these topics leaving a broad range of outcomes for modeling."

Morgan Stanley upgraded Johnson & Johnson to 'overweight' from 'equal weight'

Morgan Stanley said it sees the company's defensiveness returning as well as outperformance in 2020.

"The J&J investment thesis is looking more attractive in 2020 as (1) multiple regulatory actions aimed at controlling pharma pricing are more reflected, (2) Pharma growth likely accelerates in 2020 which historically has lifted the multiple and (3) the portfolio is now more balanced with Consumer stabilizing and MD&D coming off six consecutive quarters of momentum improvement."