Analysts downgrade several stocks, including Amazon and Caterpillar, as Wall Street's dismal earnings season continues

Published Mon, Apr 27 202010:07 AM EDTUpdated Mon, Apr 27 202010:18 AM EDT

Key Points

Morgan Stanley downgraded Caterpillar to underweight from equal weight.
R5 Capital downgraded Amazon to sell from buy.
Mizuho upgraded Twitter to neutral from underperform.
UBS downgraded Gilead to neutral from buy.
MKM downgraded Papa John's to neutral from buy.
UBS downgraded Beyond Meat to sell from neutral.
Citi upgraded LabCorp and Quest Diagnostics to buy from neutral.

(This story is for CNBC PRO subscribers only.) Wall Street analysts lowered their ratings on a bunch of stocks on Monday as earnings season continues through the coronavirus pandemic. Calls of the day include downgrades of key stocks like Caterpillar, Amazon, Beyond Meat, and more. Here are the biggest calls on Wall Street on Monday: Morgan Stanley downgraded Caterpillar to 'underweight' from 'equal weight' Morgan Stanley downgraded the heavy equipment maker and said it sees a possible multi-year downturn in non-residential construction among other things. "We are downgrading CAT to UW and URI to EW as we see growing headwinds from a multi-year downturn in Non-Resi Construction, combined with historically weak oil prices and declining mining commodity prices. As highlighted in our revised US Non-Resi outlook, we are gaining conviction in a more protracted US Non-Resi downcycle driven by declines in Commercial, Office, Amusement/Recreation and Lodging construction, as well as state and local budgets cuts." R5 Capital downgraded Amazon to 'sell' from 'buy' R5 said the company was well-positioned to "gain share" but downgraded the stock due to "rising future uncertainty." "It is important to note that our forecast still calls for growth, but not at the heady levels prior to COVID-19 and the resulting economic slowdown. It is also important to note that we still view Amazon as well positioned to gain share over time. With the stock, however, having appreciated meaningfully and reaching our $2,408 price target in the face of dramatically worsening current economic conditions and rising future uncertainty, we believe prudence dictates reducing exposure to the equity. Indeed, if we had a concern regarding our outlook it would be that we are still being overly optimistic. Read more about this call here . Mizuho upgraded Twitter to 'neutral' from 'underperform' Mizuho said in its upgrade of the stock that the coronavirus impact is already reflected in the stock price. "We are upgrading TWTR from U-PF to Neutral, but lowering PT from $35 to $28 as the stock price is mostly reflecting the downside from COVID-19 in our view. Our recent checks with ad agencies indicate a steeper decline of revenue growth in March and April relative to FB and Google due to TWTR's higher exposure to brand advertising and live events." UBS downgraded Gilead to 'neutral' from 'buy' UBS downgraded the stock mainly on valuation. "We are downgrading GILD to Neutral on valuation & as risk/reward into remdesivir (RDV) phase 3 readout appears balanced. GILD has seen a strong run YTD in part because of excitement for RDV. Our downgrade is NOT based on a change to our probability of success estimate for p3 trials. Our view continues to be that, based on preclinical and clinical data, we believe RDV has activity against SARS-CoV-2 with a > 50% chance of clinical success." MKM downgraded Papa John's to 'neutral' from 'buy' MKM downgraded the stock mainly on valuation. "The company has had success through its solid execution (and positioning within the current landscape), which has resulted in outsized share price performance. While these factors may remain in place, as PZZA is well positioned, to reach its customers, we believe they are priced into the shares. We expect continued strategic and operational execution of the plan, and believe near-term sales gains may persist, as evidenced by the recent update from Domino's. While PZZA may continue to produce accelerating results from current levels, as our fair value estimate moves to $70, from $64, and continues to include the application of our aggressive multiple, on calendar 2021 EPS, we view a less-favorable risk-reward for its shares." UBS downgraded Beyond Meat to 'sell' from 'neutral' UBS said in its downgrade of the alternative meat company that the coronavirus and a recession are not yet priced in to the stock. "Stock rally+ foodservice exposure+ increased retail competition= downside risk BYND is up 142% off its March low and is the best performing stock in our coverage YTD despite having the greatest channel risk exposure to foodservice. At ~$110/share, our analysis shows the stock credits BYND for the full economic benefit of a U.S. partnership w/McDonald's and Starbucks, but does not reflect risk from reduced restaurant traffic, consumer trade-down or increased CPG competition. While pandemic/pork shortages are driving more at-home consumption for BYND products, we cut foodservice sales and EBITDA est to reflect these headwinds." Citi upgraded LabCorp and Quest Diagnostics to 'buy' from 'neutral' Citi upgraded the clinical lab companies and said "lab testing" is poised to be part of the coronavirus solution. "We are upgrading DGX and LH to Buy as we consider the potential for a new lab testing paradigm coupled with improving l-t fundamental/industry dynamics for the large national labs that likely drives multiple expansion, in our opinion. Serology/antibody testing has recently received much hype, and it remains early to know how, when, or even if it proves to be a 'solution' to COVID. That said, it is difficult to see how lab testing isn't ultimately a part of the answer to restart the economy, perhaps led by the private sector, with the two largest commercial labs likely beneficiaries.

Construction machinery of the US producer Caterpillar can be seen at the BLG Logistics Group Car Terminal, ready for shipping in Bremerhaven, Germany, 12 June 2017. Photo: Ingo Wagner/dpa (Photo by Ingo Wagner/picture alliance via Getty Images)

Ingo Wagner | picture alliance | Getty Images

(This story is for CNBC PRO subscribers only.)

Wall Street analysts lowered their ratings on a bunch of stocks on Monday as earnings season continues through the coronavirus pandemic. Calls of the day include downgrades of key stocks like Caterpillar, Amazon, Beyond Meat, and more.

Here are the biggest calls on Wall Street on Monday:

Morgan Stanley downgraded Caterpillar to 'underweight' from 'equal weight'

Morgan Stanley downgraded the heavy equipment maker and said it sees a possible multi-year downturn in non-residential construction among other things.

"We are downgrading CAT to UW and URI to EW as we see growing headwinds from a multi-year downturn in Non-Resi Construction, combined with historically weak oil prices and declining mining commodity prices. As highlighted in our revised US Non-Resi outlook, we are gaining conviction in a more protracted US Non-Resi downcycle driven by declines in Commercial, Office, Amusement/Recreation and Lodging construction, as well as state and local budgets cuts."

R5 Capital downgraded Amazon to 'sell' from 'buy'

R5 said the company was well-positioned to "gain share" but downgraded the stock due to "rising future uncertainty."

"It is important to note that our forecast still calls for growth, but not at the heady levels prior to COVID-19 and the resulting economic slowdown. It is also important to note that we still view Amazon as well positioned to gain share over time. With the stock, however, having appreciated meaningfully and reaching our $2,408 price target in the face of dramatically worsening current economic conditions and rising future uncertainty, we believe prudence dictates reducing exposure to the equity. Indeed, if we had a concern regarding our outlook it would be that we are still being overly optimistic.