Here are Monday's biggest analyst calls of the day: Tesla, Disney, Qualcomm & more

Published Mon, May 4 20209:43 AM EDT

Key Points

Wells Fargo initiated Qualcomm as underperform.
MoffettNathanson downgraded Disney to neutral from buy.
Morgan Stanley raised its price target on Tesla to $680 to $440.
Telsey upgraded Big Lots to outperform from market perform.
Deutsche Bank downgraded Honeywell to hold from buy.
Bernstein downgraded Cigna to market perform from outperform.
Goldman Sachs added ConocoPhillips to the conviction buy list.
UBS downgraded Wells Fargo to sell from neutral.
Barclays downgraded Delta to equal weight from overweight & American to underweight from equal weight.

(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Monday: MoffettNathanson downgraded Disney to 'neutral' from 'buy' MoffettNathanson said in its downgrade that it expects the coronavirus to have a longer-lasting effect on the company than many anticipate. "Our analysis makes it clear to us that Disney is in for a long stretch of significant negative revisions as estimates catch up to the grim reality. Our Disney downgrade is also an admission that we believe the economic impact on the company will be longer than most anticipate, especially given the risks of a second wave of infections after reopening ." Read more about this call here . Morgan Stanley raised its price target on Tesla to $680 to $440 Morgan Stanley said it had more confidence in the "longer term margin trajectory" of Tesla 's Model Y and Model 3 autos. "After a strong quarter of profitability, albeit vs. lowered expectations, including positive developments with Model Y and MIC Model 3 profitability in the quarter, we are left feeling more confident in the longer term margin trajectory of both products, as well as the overall operating leverage of the business longer term. As such, we have raised our margin forecasts throughout our 2030 forecast period, where we now have gross margins peaking at 26% in the 2026/2027 time frame vs. approximately 24.5% prior, with operating margins peaking at 11% over that same period vs. 10% in our prior forecasts." Wells Fargo initiated Qualcomm as 'underperform' Wells Fargo said in its downgrade that it sees several "factors" limiting the company's long-term growth potential such as trade among other things. " QCOM also faces an uphill battle as the U.S. and China hash out differences on trade and due to the U.S. DoC's inclusion of Huawei on the restricted list (with possibly further restrictions). An anti-U.S. sentiment in China and Huawei's own influence in the development of 5G standards may create a tepid environment for QCOM as it attempts to address the World's largest mobile handset market (and to collect royalties within China). Telsey upgraded Big Lots to 'outperform' from 'market perform' Telsey upgraded the discount retailer and said it had "confidence" in the strategic transformation plan of the company after speaking with management. "We are upgrading shares of BIG to Outperform from Market Perform, following our discussion with CEO Bruce Thorn and CFO Jonathan Ramsden on Friday, May 1, which increased our confidence in the strategic transformation plan and the company's solid financial position, boosted by its recent sale-and-leaseback transaction (~$550MM in net proceeds), which should enable it to effectively navigate the COVID-19 downturn and actively repurchase shares—which should drive robust EPS growth in 2021." Deutsche Bank downgraded Honeywell to 'hold' from 'buy' Deutsche Bank downgraded the stock and said it was concerned that the company wouldn't be able to generate earnings growth due to a "tough" environment. " Honeywell is undeniably one of the highest quality, if not the highest quality company that we cover. It has earned this status through superior execution during the past two downturns,a robust history of disciplined capital allocation, top-tier returns - ROIC is in the low-20s, and a superior organic growth profile. For these reasons, HON stock has historically outperformed during downturns. However, this has not been the case in a significant way this time around; HON has only outperformed the MI/EE group by 4ppts YTD. And while execution was commendable in 1Q20, we have a hard time forming an exciting bull case on the stock in this new world order." Bernstein downgraded Cigna to 'market perform' from 'outperform' Bernstein downgraded the insurer and said it sees "increased business risks" due to the coronavirus and the recessionary environment. "We believe risks to CI have increased including recession risks to CI's core employer managed care organization business, and election policy risks to PBM and employer growth. We recently decreased our PT for CI to $223. The 14% reduction in price target from prior level was driven by three factors: a 7% EPS reduction in 2021 driven by the recession, lower market multiples, and concern on CI's employer focus post COVID-19. At the time of this decrease in estimates, CI was 20% below current levels." Goldman Sachs added ConocoPhillips to the 'conviction buy list' Goldman Sachs said the company was one of the "best performing" energy stocks. "As we discuss in Five reasons to get more positive on Energy stocks, we believe we are seeing micro/macro fundamentals bottoming and expect ConocoPhillips to be a strong participant in the upcoming oil price upcycle, given the level of underperformance relative to large cap US majors to date, as well as the company's strong leverage to Brent. We note, however, that our view on ConocoPhillips could be met with increasing investor debate, and we address key areas of investor concerns in this report including on the unhedged 2020 cash ﬂow proﬁle, US E & P M & A risk, Alaska, better risk/reward to independent E & Ps and the lower dividend yield." UBS downgraded Wells Fargo to 'sell' from 'neutral' UBS downgraded the bank and said it saw limited profitability among other things. "Ultimately, our Sell rating on Wells Fargo is underpinned by substantial earnings downgrades, limited profitability buffers to withstand incremental revenue and credit headwinds, very low loan loss reserve levels versus peers, and limited flexibility to optimize the cost structure till regulatory requirements are met. Our price target of $19/share yields considerable downside potential of 26%." Northcoast downgraded Wendy's to hold from buy Northcoast downgraded the stock on concerns about the beef supply chain. "We are reducing our rating from BUY to HOLD while increasing our outlook for 2020, based on our most recent checks. Though we believe WEN is navigating the Covid-19 crisis well, having successfully recaptured a significant share of lost dine-in traffic through drive-thrus or digital/delivery, we are concerned that disruptions in the beef supply-chain could impair Wendy's near-term performance." Barclays downgraded Delta to 'equal weight' from 'overweight' & American to 'underweight' from 'equal weight' Barclays downgraded Delta and American and said airline equities face an "uphill battle" due to the coronavirus. "The future is uncertain on travel demand but definite on plenty of additional debt for a historically storied airline industry driving our sector downgrade. We expect to be called late on this downgrade, but will save emotional reactions for later. Objectively, airline equities face an uphill battle. Apart from not knowing when revenue will return for an industry collectively burning an estimated $20bn of cash this quarter, sizable debt balances and yet unknown structural cost burdens loom large. On this basis, applying even favorable enterprise valuations for the large four US airlines results in a range of potential equity outcomes skewed to the downside."

A woman walks past a Wells Fargo location in view of City Hall, left, in Philadelphia, Thursday, May 11, 2017. Philadelphia's city council approved legislation to remove Wells Fargo as the bank handling the city's payroll. Thursday's legislation authorizes Citizens Bank to handle those services at the start of the next fiscal year in July.

Matt Rourke | AP

(This story is for CNBC PRO subscribers only.)

Here are the biggest calls on Wall Street on Monday:

MoffettNathanson downgraded Disney to 'neutral' from 'buy'

MoffettNathanson said in its downgrade that it expects the coronavirus to have a longer-lasting effect on the company than many anticipate.

"Our analysis makes it clear to us that Disney is in for a long stretch of significant negative revisions as estimates catch up to the grim reality. Our Disney downgrade is also an admission that we believe the economic impact on the company will be longer than most anticipate, especially given the risks of a second wave of infections after reopening."

Morgan Stanley raised its price target on Tesla to $680 to $440

Morgan Stanley said it had more confidence in the "longer term margin trajectory" of Tesla's Model Y and Model 3 autos.

"After a strong quarter of profitability, albeit vs. lowered expectations, including positive developments with Model Y and MIC Model 3 profitability in the quarter, we are left feeling more confident in the longer term margin trajectory of both products, as well as the overall operating leverage of the business longer term. As such, we have raised our margin forecasts throughout our 2030 forecast period, where we now have gross margins peaking at 26% in the 2026/2027 time frame vs. approximately 24.5% prior, with operating margins peaking at 11% over that same period vs. 10% in our prior forecasts."