Here are Monday's biggest analyst calls of the day: Levi, Keurig Dr Pepper, Wayfair & more

Published Mon, Feb 24 20208:25 AM EST

Key Points

Morgan Stanley upgraded Keurig Dr Pepper to equal weight from underweight.
UBS initiated Levi Strauss & Co. as buy.
Bank of America downgraded First Solar to underperform from buy.
Morgan Stanley downgraded Wayfair to underweight from equal weight.
Baird downgraded L Brands to neutral from outperform.
Cowen downgraded Tilray to market perform from outperform.
Cowen downgraded Domino's Pizza to market perform from outperform.
Evercore ISI initiated Chewy as outperform.
Argus downgraded Norwegian Cruise Line to hold from buy.

(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Monday: Morgan Stanley upgraded Keurig Dr Pepper to 'equal weight' from 'underweight' Morgan Stanley upgraded the beverage maker mainly on valuation. "We are upgrading Keurig Dr Pepper to Equal-weight from Underweight post large stock underperformance, with KDP stock up ~5% over the last year, underperforming its closest peers KO by ~2,600 bps and PEP by ~2,400 bps, as well as underperforming the broader CPG peer group by ~1,500 bps and the S & P by ~1,600 bps over the same period. Post the large underperformance, we don't see enough downside to justify an Underweight." UBS initiated Levi Strauss & Co. as 'buy' UBS initiated the maker of denim jeans as buy and said the company is one of the world's "best" brands. "We initiate at Buy because we think Levi 's transformation into a global, direct-to-consumer, lifestyle brand could make the stock worth more long-term, catalyzing a P/E rerating. The market views Levi's as tethered to struggling US Dept. Stores. But, we think Levi's is a potential Softlines "winner," capable of delivering many years of +DD EPS growth and an improved, above-industry-avg. ROIC. " Bank of America downgraded First Solar to 'underperform' from 'buy' Bank of America double downgraded First Solar and said its channel checks show "margin degradation" for the manufacturer of solar panels. "While volume origination has remained within targets, mgmt highlights earlier-stage development asset sales, leading to such volumes shifting to module supply agreements, resulting in lower total revenues. We view commentary affirming cautious datapoints from our channel checks with developers around margin degradation on an increasing competitive development landscape with minimal accretion expressed given compressed margin profile and reduced risk adjusted returns." Morgan Stanley downgraded Wayfair to 'underweight' from 'equal weight' Morgan Stanley downgraded the e-commerce furniture and home goods company and said it was concerned that revenue growth was still "decelerating." "The market is pricing in greater stabilization in 2020 revenue trends and a faster path to profitability than we expect. Our channel checks suggest W 's revenue growth is still decelerating, and macro headwinds are rising. We are reducing our 2020 revenue estimates to reflect higher risks; we now model ~23% revenue growth in 2020 vs. ~28% prior." Baird downgraded L Brands to 'neutral' from 'outperform' Baird downgraded L Brands mainly on valuation. "Following recent events (announced plans to sell 55% stake in Victoria's Secret, pending CEO change), a key catalyst in our value thesis for shares has come to fruition. While we still see a path to value creation over time, and view current valuation as relatively attractive given BBW's robust recent performance, these positives are balanced by some elevated near-term risk factors." Cowen downgraded Tilray to 'market perform' from 'outperform' Cowen downgraded the cannabis company and said "headwinds" like pricing and inventory don't appear to be fading. "We are downgrading ACB, SNDL and TLRY to Market Perform (all from Outperform) as we grow increasingly cautious on the outlook for cannabis in Canada. Headwinds that have plagued the industry (pricing, stores, inventory) do not appear to be fading as anticipated, while 2.0 is likely not the elixir that the market was hoping for." Cowen downgraded Domino's Pizza to 'market perform' from 'outperform' Cowen downgraded the pizza restaurant chain mainly on valuation. "We argue shares' robust reaction to a 4Q beat flips DPZ' s risk/reward profile to greater downside from potential deterioration, than upside from our 2020-21 bull case. We are positively biased on the company given best-in-class, pizza category leadership and strong 3-year cash paybacks. However, we await an entry point that offers better valuation upside given DPZ's model lacks operating leverage." Evercore ISI initiated Chewy as 'outperform' Evercore initiated the online pet retailer and said it sees the stock as "undervalued" "We are initiating coverage of Chewy with an Outperform rating and a Base Case of $38. Chewy offers rapid share gains and double digit topline growth, subscription-like revenues through its Autoship program with a "seasoning" element, and a pathway to profitability in 1-2 years. Autoship revenues account for two thirds of sales and offers a sticky and predictable subscription-like revenue stream. 80%of sales are consumables, which leads to a predictable purchase behavior. The pet industry is rapidly shifting online, and with a path to profitability, we believe Chewy's stock is undervalued." Argus downgraded Norwegian Cruise Line to 'hold' from 'buy' Argus downgraded the stock due to fears about the coronavirus. "Despite its relatively low exposure to China and other parts of Asia, Norwegian Cruise Holdings is feeling the impact of the coronavirus outbreak. The company has cancelled all cruises to Asia through the end of the third quarter, which management expects to reduce 2020 EPS by $0.75. We also believe that difficulties in deploying ships due to the outbreak could hurt net yields in other regions."

Dr Pepper soda in the warehouse at the Dr Pepper Snapple Group bottling plant in Louisville, Kentucky, in April 2015.

Luke Sharrett | Bloomberg | Getty Images

(This story is for subscribers only.)

Here are the biggest calls on Wall Street on Monday:

Morgan Stanley upgraded Keurig Dr Pepper to 'equal weight' from 'underweight'

Morgan Stanley upgraded the beverage maker mainly on valuation.

"We are upgrading Keurig Dr Pepper to Equal-weight from Underweight post large stock underperformance, with KDP stock up ~5% over the last year, underperforming its closest peers KO by ~2,600 bps and PEP by ~2,400 bps, as well as underperforming the broader CPG peer group by ~1,500 bps and the S&P by ~1,600 bps over the same period. Post the large underperformance, we don't see enough downside to justify an Underweight."

UBS initiated Levi Strauss & Co. as 'buy'

UBS initiated the maker of denim jeans as buy and said the company is one of the world's "best" brands.

"We initiate at Buy because we think Levi's transformation into a global, direct-to-consumer, lifestyle brand could make the stock worth more long-term, catalyzing a P/E rerating. The market views Levi's as tethered to struggling US Dept. Stores. But, we think Levi's is a potential Softlines "winner," capable of delivering many years of +DD EPS growth and an improved, above-industry-avg. ROIC. "