Here are Wednesday's biggest analyst calls: FedEx, Eli Lilly, AMC & more

Published Wed, Dec 18 20199:08 AM EST

Key Points

Oppenheimer downgraded FedEx to perform from outperform.
Citi lowered its price target on Twitter to $36 from $45.
Deutsche Bank raised its price target on Facebook to $270 from $260.
B. Riley FBR initiated RealReal as buy.
Bank of America downgraded AMC Entertainment to underperform from neutral.
Deutsche Bank upgraded Delta Airlines to buy from hold.
Rosenblatt initiated Datadog as buy.
Deutsche Bank initiated Skechers as buy.
Morgan Stanley upgraded Eli Lilly to overweight from equal weight.
Longbow downgraded Domino's Pizza to neutral from buy.

Here are the biggest calls on Wall Street on Wednesday: Oppenheimer downgraded FedEx to 'perform' from 'outperform' Oppenheimer downgraded the stock after the company's negative earnings report on Tuesday. "F2Q20 adjusted operating profit of $684M was well short of our estimate/consensus of $900M/ $957M, respectively, driven by soft global trade/economic conditions, increased Ground segment service offering expenses (e.g. weekend delivery implementation), mix shift headwinds, competitive pricing, as well as the timing of cyberweek (F3Q20). We anticipate some of the aforementioned headwinds to abate and F2H20 to be a period of moderate improvement." Read more about this call here . Citi lowered its price target on Twitter to $36 from $45 Citi lowered its price target on Twitter on concerns about the company's "near-term" revenue outlook. "We remain largely concerned on the near-term revenue outlook for the stock due to the MAP impacts and therefore are lowering our 4Q and FY20 estimates. As a result, our long-term DCF valuation now results in a new TP of $36." Read more about this call here . Deutsche Bank raised its price target on Facebook to $270 from $260 Deutsche raised its price target on the stock and said the company had done "extensive product work" heading into 2020. "We are bullish on Facebook and see the renewed strength in the core Facebook app - which became clear in 3Q results - emerging as a critical leg of the story around FB shares in 2020. This was not a coincidence, but the result of extensive product work - reworking the core newsfeed algorithm promoting meaningful content, rolling out Stories, scaling Marketplace, building the Groups product, adding more video content and continuing to improve relevancy algorithms across content and ads." B. Riley FBR initiated RealReal as 'buy' B. Riley FBR said the online luxury consignment shop is poised to take advantage of the growing luxury goods retail market. "We are initiating coverage of The RealReal , Inc. with a Buy rating and a 12-month price target of $23 per share, which represents 26% potential upside from current levels. We believe the company is well positioned to take advantage of the growing resale market of luxury goods as consumers become more sustainably conscious and focus on value yet still desire luxury goods and differentiation. We view REAL as the leader in the modern-day luxury consignment market whose model is disrupting traditional consignment shops by providing an essentially seamless and hassle-free experience for consumers from consignment to purchase." Bank of America downgraded AMC Entertainment to 'underperform' from 'neutral' Bank of America downgraded the theater chain and said it was concerned about rising competition from Netflix among other things. "Despite the solid performance of DIS' Frozen II and a likely strong bow from DIS' Star Wars: The Rise of Skywalker on 12/20/19, we are downgrading AMC shares from Neutral to Underperform as the confluence of: (1) tough 2020 slate comps, (2) lapping of Stubs A-List price increases (beg. Jan. 2020), (3) a cont. rise in perceived competition from small screen competitors such as NFLX, (4) high leverage and (5) a potential dividend cut in Sept. 2020 could limit relative share price potential vs. other Media & Entertainment (M & E) equities over the near-to-med. term." Deutsche Bank upgraded Delta Airlines to 'buy' from 'hold' Deutsche Bank called the airline one of the most "consistent generators" of earnings. "As one of the industry's most consistent generators of earnings (e.g., 2019 will be fifth year of pretax profit at or above $5 billion), free cash flow, and value creation ( Delta 's invested capital has doubled from $17 billion in 2010 to $34 billion at present whereas its ROIC has increased 400 bps over that period to 15%), we are of the view that Delta should command a premium multiple vis-à-vis its peer group." Rosenblatt initiated Datadog as 'buy' Rosenblatt said the company is well positioned in a market that will "benefit from a secular trend" that requires new approaches to monitoring cloud-based applications. Datadog is a monitoring service for cloud applications. "DDOG is an early leader in providing performance monitoring solutions for cloud-based deployments, which is increasingly becoming more driven by distributed and dynamic technologies such as containers, microservices and serverless architectures. As more new deployments and related workloads shift to the cloud (both public and private), we believe Datadog is well positioned to benefit from this secular trend that requires a fundamentally new approach to monitor cloud-based applications leveraging these highly dynamic and distributed technologies that are transitory in nature." Deutsche Bank initiated Skechers as 'buy' Deutsche said the shoe company's dominance in the footwear market is underappreciated. "We believe SKX 's dominance in the global footwear market (behind only Nike and adidas) and top-line growth story (sales have more than doubled over the last eight years) have been underappreciated, and we expect the multiple gap between peers such as ADS, VFC, PUM, and NKE to narrow given the company's earnings algorithm that is leading to LDD to mid-teens EPS growth." Morgan Stanley upgraded Eli Lilly to 'overweight' from 'equal weight' Morgan Stanley said in its upgrade of the pharmaceutical company that it had a strong pipeline among other things. "Upgrading LLY from EW to OW and raising PT from $116 to$150. We expect LLY shares to outperform, driven by strong growth and pipeline optionality. Raising long-term projections, and we believe investor enthusiasm for Lilly's R & D can continue to increase." Read more about this call here . Longbow downgraded Domino's Pizza to 'neutral' from 'buy' Longbow downgraded the stock mainly on valuation. "We are downgrading DPZ to NEUTRAL this morning based predominantly on valuation as the shares have achieved our target price levels. The shares recovered by nearly 35% since bottoming in late August amidst heightened investor concerns post DPZ's 2Q19 results related to competitive pressure from third-party delivery providers."

Getty Images

Here are the biggest calls on Wall Street on Wednesday:

Oppenheimer downgraded FedEx to 'perform' from 'outperform'

Oppenheimer downgraded the stock after the company's negative earnings report on Tuesday.

"F2Q20 adjusted operating profit of $684M was well short of our estimate/consensus of $900M/ $957M, respectively, driven by soft global trade/economic conditions, increased Ground segment service offering expenses (e.g. weekend delivery implementation), mix shift headwinds, competitive pricing, as well as the timing of cyberweek (F3Q20). We anticipate some of the aforementioned headwinds to abate and F2H20 to be a period of moderate improvement."

Citi lowered its price target on Twitter to $36 from $45

Citi lowered its price target on Twitter on concerns about the company's "near-term" revenue outlook.

"We remain largely concerned on the near-term revenue outlook for the stock due to the MAP impacts and therefore are lowering our 4Q and FY20 estimates. As a result, our long-term DCF valuation now results in a new TP of $36."