Here are Monday's biggest analyst calls of the day: Facebook, Morgan Stanley, Costco & more

Published Tue, Jan 21 20208:46 AM EST

Key Points

Oppenheimer upgraded Costco to outperform from market perform.
Morgan Stanley raised its price target on Facebook to $270 from $250.
Atlantic Equities downgraded Bank of America to neutral from overweight.
Citi downgraded Morgan Stanley to neutral from buy.
Jefferies upgraded Intel to hold from underperform.
Macquarie initiated Visa and Mastercard as buy.
KeyBanc upgraded L Brands to overweight from sector weight.
Raymond James upgraded J.B. Hunt to outperform from market perform.
KeyBanc downgraded Dollar Tree and Big Lots to sector weight from overweight.
New Street Research raised its price target on Tesla to $800 from $530.

Here are the biggest calls on Wall Street on Monday: Oppenheimer upgraded Costco to 'outperform' from 'market perform' Oppenheimer said in its upgrade of the stock that it saw an attractive valuation and upbeat top line trends among other things. Since late August COST shares have lagged up 3% vs. a gain of 14% in the S & P 500. With a now more accommodative valuation on a relative basis, the potential for well above peer top-line trends set to continue, and prospects for a special dividend, we again see the case for outperformance. As we look to the balance of 2020, we overall see a muted upside outlook for our food retailing universe, but believe COST and DG can deliver outsized gains vs. peers in this backdrop. Morgan Stanley raised its price target on Facebook to $270 from $250 Morgan Stanley raised its price target on the stock and said it sees remains bullish on the company in to its earnings report and sees "upside" to advertising revenue.. "We remain bullish FB as 1) The runway for online ad growth is long/expanding 2) Instagram Stories/Core FB can drive 23%+ '20 ad rev growth and we see ~$5bn of emerging ad products for '21 and beyond and 3) We see positive revisions ahead with FB trading at 11X EBITDA for ~20% growth." Atlantic Equities downgraded Bank of America to 'neutral' from 'overweight' Atlantic Equities downgraded the stock mainly on valuation among other things. "The US banks' Q4 results were generally better than expected with a continuation of the positive themes seen in Q3 - steady loan growth, good credit quality, modest NIM declines - combined with a big rebound in FICC from a weak 4Q18. Outlook commentary was mixed with some positive targets presented by Citi and MS but caution from BAC and WFC. We are downgrading BAC to Neutral following its strong run over the last three months but retain our Overweight calls on Citi and MS." Citi downgraded Morgan Stanley to 'neutral' from 'buy' Citi said in its downgrade of Morgan Stanley that the investment bank looks "fairly valued." "The stock reacted very positively to the return targets outlined in the strategic update with the stock outperforming the BKX by over 600bps on earnings day. However, consensus appears to have responded, raising their numbers, and our 2020 EPS estimate now falls out roughly in-line with the Street. We still favor the brokers over the traditional banks given their relatively low exposure to net interest revenue pressures and credit risk. However, with the recent outperformance and limited upside to earnings, we do not see enough upside to justify a Buy rating on the stock. We are downgrading to Neutral with a $60 price target based on a 15% ROTE and ~11.5% cost of equity." Read more about this call here . Jefferies upgraded Intel to 'hold' from 'underperform' Jefferies said in its upgrade of Intel that it believes the company is "positioning" to change due to a change in management and the board level among other things. "Share loss, a transistor transition disaster, changing of the mgmt guard, and a CEO bonus that inflects with the stock in the low $60s tell us the table is set for change at INTC . We increase our price target to $64 assuming that the company divests memory (Focus) and cuts OpEx (Frugality). Fixing its manufacturing or moving to a Fabless model potentially addresses our share concerns, but we assess a low probability of either... for now." Macquarie initiated Visa and Mastercard as 'buy' Macquarie initiated Visa and Mastercard and said it sees "long-term" margin "upside" for the payment companies. "Initiate coverage of V and MA . Are millennials a threat or a benefit to Visa & Mastercard's multi-decade moat? We find that millennials are reinforcing V & MA's relevance, increasingly using debit in everyday spend and to fund popular P2P apps. Real-time push payments, a $10tn opportunity for debit, favors V most. Higher int'l & consulting mix, and long-term margin upside make MA attractive." KeyBanc upgraded L Brands to 'overweight' from 'sector weight' KeyBanc said it sees a "significant upside" opportunity for the stock and a "value creating transaction" likely for its Victoria's Secret brand. "We believe that the stark differential in performance between Victoria's Secret and Bath & Body Works, and lack of any discernable turnaround at VS, makes a value creating transaction more likely. We downgraded LB to Underweight in March 2017 and stuck with the rating until November 2018, believing that a fresh perspective in the VS business could drive a turn. However, we think is unlikely now and think that efforts to unlock value at BBW are more likely." Raymond James upgraded J.B. Hunt to 'outperform' from 'market perform' Raymond James upgraded the stock and said it thinks the transportation and logistics company has seen "peak pain" across a variety of metrics including earnings per share declines among other things. "While we appreciate the malaise in the intermodal market driven (in part) by a loose truck environment, we are upgrading JBHT shares to Outperform (from Market Perform) on our holistic view that JBHT has seen 'peak pain' across a number of metrics including EPS declines, integrated capacity solutions losses, intermodal volume optics, etc." KeyBanc downgraded Dollar Tree and Big Lots to 'sector weight' from 'overweight' KeyBanc downgraded the discount retailers and said it sees "competitive pressures and earnings per share risks." "For DLTR , we are $0.10 below the TR consensus for 2020, and we believe margin trends may remain challenged, making even our estimate difficult to achieve. With the stock at 18x our 2020 estimate (only slightly below the 5-year average of 19x – which was a period where FDO synergies and potential shareholder activism were reasons for positivity), we see valuation downside if EPS challenges continue. For BIG , we are positive on the changes Bruce Thorn has made since joining in 2018 as CEO. Investments in the store of the future are clearly driving better comps." New Street Research raised its price target on Tesla to $800 from $530 New Street raised its price target on the stock and said the company is executing on all cylinders and that its "dominance" in technology is "real." We stick to our views and expect Tesla to sell 2-3m cars per year after 2025, at industry leading margins, justifying a market capitalisation of $230-350bn, or ~$1,100-1,700 per share. Discounted back to early 2021, we would see that fully priced with a stock in the $640-960 range. On that basis, we increase our target price to $800.

James Gorman, chief executive officer of Morgan Stanley

Qilai Shen | Bloomberg | Getty Images

Here are the biggest calls on Wall Street on Monday:

Oppenheimer upgraded Costco to 'outperform' from 'market perform'

Oppenheimer said in its upgrade of the stock that it saw an attractive valuation and upbeat top line trends among other things.

Since late August COST shares have lagged up 3% vs. a gain of 14% in the S&P 500. With a now more accommodative valuation on a relative basis, the potential for well above peer top-line trends set to continue, and prospects for a special dividend, we again see the case for outperformance. As we look to the balance of 2020, we overall see a muted upside outlook for our food retailing universe, but believe COST and DG can deliver outsized gains vs. peers in this backdrop.

Morgan Stanley raised its price target on Facebook to $270 from $250

Morgan Stanley raised its price target on the stock and said it sees remains bullish on the company in to its earnings report and sees "upside" to advertising revenue..

"We remain bullish FB as 1) The runway for online ad growth is long/expanding 2) Instagram Stories/Core FB can drive 23%+ '20 ad rev growth and we see ~$5bn of emerging ad products for '21 and beyond and 3) We see positive revisions ahead with FB trading at 11X EBITDA for ~20% growth."