Wall Street analysts see upside in stocks like Amazon ahead of earnings

Published Thu, Apr 23 202010:13 AM EDT

Key Points

Goldman Sachs raised its price target on Amazon to $2,900 from $2,600.
BMO upgraded Chipotle to market perform from underperform.
Evercore ISI named Disney a top pick.
Raymond James downgraded Biogen to underperform from market perform.
Citi downgraded Biogen to sell from neutral.
Barclays downgraded L Brands to equal weight from overweight.
Craig-Hallum upgraded Seagate to buy from hold.
Morgan Stanley upgraded Gap to equal weight from underweight.

(This story is for CNBC PRO subscribers only.) Wall Street analysts told clients on Thursday there's still plenty of time to buy stocks like Amazon ahead of earnings. Other calls of the day include Chipotle, Disney, Seagate and more. Here are the biggest calls on Wall Street on Thursday: Goldman Sachs raised its price target on Amazon to $2,900 from $2,600 Goldman raised its price target on the stock to a Street high and said the company represents the best risk/reward in the internet sector. "While the stock has outperformed significantly, we believe the market continues to underestimate the long term value of the Amazon platform as the leader in both the movement of retail online and compute into the cloud, the realization of which is being accelerated by the current crisis along with consumer and enterprise adoption. Therefore, we continue to believe Amazon represents the best risk/reward in the Internet sector and remain Buy-rated (CL)." Read more about this call here . BMO upgraded Chipotle to 'market perform' from 'underperform' BMO upgraded Chipotle and said the risk/reward appears balanced. "As we shift focus to "re-opening" environment, we provide a plausible range of 2021 (and in select cases FY22) sales/earnings scenarios, as well as revised price targets based on updated valuation thoughts. We upgrade CHUY, CMG , DRI, EAT, and TXRH to Market Perform as our analysis suggests balanced risk/rewards, though, for casual diners, we are not incrementally positive on fundamentals and believe the perception of meaningful incremental upside after the outsized pullbacks is overstated. We believe fast food offers the greatest upside, with WEN increasingly standing out, and prefer WING in fast casual despite resilient performance." Evercore ISI named Disney a 'top pick' Evercore said it thinks that the stay-at-home orders have been a positive for Disney+ subscriber trends. "On one hand, we estimate ~50% of Disney 's operating income in FY19 came from theme parks and ESPN, both of which will be among the hardest-hit businesses during the coronavirus pandemic. However, the current DIS valuation seems to price in multiple years of theme park weakness, potential for structural impairment in the TV advertising market, and accelerating cord-cutting trends without fully reflecting Disney+ upside. On this point, we expect stay-at-home orders have been a positive for subscriber trends and believe the company could reach L/T sub guidance by the end of this year (three years early) and breakeven by FY22 (two years early)." Raymond James downgraded Biogen to 'underperform' from 'market perform' Raymond James downgraded the multinational biotechnology company on concerns its Alzheimer's drug would be rejected by the Food and Drug Administration. "We are downgrading BIIB to Underperform following 1Q20 results based on increased conviction Alzheimer's drug candidate aducanumab will be rejected by FDA (via either Refuse to File which could come in 2H20, or Complete Response Letter in 2021). ... Impact of COVID-19. Biogen is aiming to continue ongoing clinical trials and are generally allowing enrollment of new patients, sites, and countries in ongoing clinical trials with close monitoring for patient and provider safety and data integrity." Barclays downgraded L Brands to 'equal weight' from 'overweight' Barclays downgraded the stock after private equity firm Sycamore filed a lawsuit to withdraw its intention to buy L Brands Victoria's Secret brand . "On 4/22/20, Sycamore filed a lawsuit seeking to declare its termination of the agreement to acquire Victoria's Secret as valid. Sycamore's termination argument is that LB breached its covenants pursuant to the transaction agreement filed 2/20/20, and these breaches are incurable. ... We see both parties making arguments that will take time to resolve and indefinitely delay the closure of a potential transaction, leaving LB facing significant losses from closed Victoria's Secret stores. ... Our prior Overweight rating was based on the likelihood of a sale of Victoria's Secret and for that to unlock value for BBW as a standalone entity. Given the reduced likelihood of a transaction occurring, we are downgrading our rating of LB to Equal Weight with a $10 price target." Craig-Hallum upgraded Seagate to 'buy' from 'hold' Craig-Hallum upgraded the data storage company after its better-than-expected earnings report and an acceleration of cloud customer demand. " Seagate reported better than expected results and in line guidance in the current challenging COVID-19 environment. The company recorded record sales of near line high capacity products in the quarter as demand from cloud and hyperscale customer remained robust. The company saw an acceleration of cloud customer demand exciting the March quarter, and has continued into Q4, due to plans to rapidly deploy additional capacity to address the recent spike in global demand from the move of work and education to the home." Morgan Stanley upgraded Gap to 'equal weight' from 'underweight' Morgan Stanley said in its upgrade of the stock that it sees potential upside as retail stores re-open. Gap, however, on Thursday announced it has stopped paying rents and may not have enough cash to fund its operations through the coronavirus pandemic. "While our estimates are still meaningfully below consensus (2020e revenue, gross profit, operating income, and EPS -11%, -13%, -$690M, and -$1.60 below the Street, respectively), the YTD decline suggests much of the sales and earnings risk is discounted in the current stock price. Similar to our view across the broader retail space, we believe GPS may enjoy a small rally in the coming months as North America retail gradually re-opens, potentially increasing upside. As such, we upgrade GPS to EW from UW."

Jeff Bezos, head of Amazon, can be seen on the fringes of the company's novelties event.

Andrej Sokolow | picture alliance | Getty Images

(This story is for CNBC PRO subscribers only.)

Wall Street analysts told clients on Thursday there's still plenty of time to buy stocks like Amazon ahead of earnings. Other calls of the day include Chipotle, Disney, Seagate and more.

Here are the biggest calls on Wall Street on Thursday:

Goldman Sachs raised its price target on Amazon to $2,900 from $2,600

Goldman raised its price target on the stock to a Street high and said the company represents the best risk/reward in the internet sector.

"While the stock has outperformed significantly, we believe the market continues to underestimate the long term value of the Amazon platform as the leader in both the movement of retail online and compute into the cloud, the realization of which is being accelerated by the current crisis along with consumer and enterprise adoption. Therefore, we continue to believe Amazon represents the best risk/reward in the Internet sector and remain Buy-rated (CL)."

BMO upgraded Chipotle to 'market perform' from 'underperform'

BMO upgraded Chipotle and said the risk/reward appears balanced.

"As we shift focus to "re-opening" environment, we provide a plausible range of 2021 (and in select cases FY22) sales/earnings scenarios, as well as revised price targets based on updated valuation thoughts. We upgrade CHUY, CMG, DRI, EAT, and TXRH to Market Perform as our analysis suggests balanced risk/rewards, though, for casual diners, we are not incrementally positive on fundamentals and believe the perception of meaningful incremental upside after the outsized pullbacks is overstated. We believe fast food offers the greatest upside, with WEN increasingly standing out, and prefer WING in fast casual despite resilient performance."