Here are Wednesday's biggest analyst calls of the day: Roku, Target, Ferrari, Deere & more

Published Wed, Aug 12 20207:59 AM EDT

Key Points

Guggenheim upgraded AutoNation to buy from neutral.
JPMorgan added Target to the focus list.
Deutsche Bank initiated Roku as buy.
Deutsche Bank downgraded Deere to hold from buy.
JPMorgan upgraded American Eagle Outfitters to overweight from neutral.
Morgan Stanley raised its price target on Ferrari to $265 from $180.

(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Wednesday: Guggenheim upgraded AutoNation to buy from neutral Guggenheim upgraded the new and pre-owned auto retailer on valuation and earnings upside among other things. "Our positive view is supported by: 1) an attractive valuation, with shares trading at ~8.5x our FY21 EPS, a discount to long-term averages and pre-COVID levels, despite our 2021 EPS forecast being ~40% above 2019 and a much better balance sheet emerging from the crisis (second lowest net leverage position in group after Lithia Motors); 2) earnings upside from capital deployment (buybacks and AutoNation USA standalone used car store expansion), with visibility to $7+ in 2021 EPS (vs $5.78 consensus)" Deutsche Bank initiated Roku as buy Deutsche Bank said in its initiation of the digital media player streaming company that it had done an "impressive" job of building out its consumer base. " Roku is the market leader in the connected TV market, with close to 50% market share of global CTV streaming hours, and is seeing strong growth opportunities as more consumers and advertisers spend time and money on streaming content. The company has done an impressive job building out the largest installed base in the industry and monetizing it through its Platform business, helping transition the company from a lower margin hardware company to a higher margin software/media company." Deutsche Bank downgraded Deere to hold from buy Deutsche downgraded the stock mainly on valuation. "It has only been about six weeks since we launched coverage of Deere , but the stock has already gained 24% over this period, making it the second best performer in our Machinery coverage universe (behind AGCO). Because DE stock has reached $193, putting it above our $185 price target, we had to come to a decision about whether we could justify a higher target multiple and/or higher earnings estimates - and the answer was 'no' on both accounts." JPMorgan added Target to the focus list JPMorgan added the big box retailer to its focus list and said no other "mass merchant" has a "balance of low-priced, every day essential items and cheap-chic apparel and home furnishings." "Importantly, ongoing share gains in grocery, beauty, and essentials combined with strong apparel/home comps will support the long-term share gainer bull case and support our view that it can retain a large number of the customers it gained during the height of the pandemic. Given we expect the trail of tears on the mall to continue (store closings into the new year) and brands coming TGT' s way, the future looks bright as no other national 'mass merchant' has the balance of low-priced, every day essential items and cheap-chic apparel and home furnishings." JPMorgan upgraded American Eagle Outfitters to overweight from neutral JPMorgan upgraded the lifestyle accesories and retailer and said it sees upside and a "favorable" risk/reward. "With AEO shares down 45% in the past 18 months trading at 2.3x our FY22 EBITDA – we see a favorable 'structural' sum of the parts risk/reward setup of ~$15 by $20. Digging deeper, we see the AEO story at a positive multi-year inflection point with Aerie's double digit top/bottom-line profile (including high-teens+ annual footage growth & double-digit comps) reaching scale at $1B revenues and AE brand store closures representing a positive SOTP catalyst and profitability/selling, general, and admin expenses multi-year efficiency opportunity." Morgan Stanley raised its price target on Ferrari to $265 from $180 Morgan Stanley raised its price target on the luxury and sports car maker to a Street high and said it thinks the company is increasingly likely to make electric vehicles part of its strategy in the future. "We think Ferrari is entering a higher phase of growth and a tech transition that takes investor thinking beyond the limits of luxury goods comps… and can grow the super-luxury pie much faster (and more sustainable) than the market expects. ... .We expect Ferrari to grow its CO2 footprint by a substantial amount and believe the company is increasingly looking to make EVs part of its strategy going forward."

Ferrari Roma

Source: Ferrari

(This story is for CNBC PRO subscribers only.)

Here are the biggest calls on Wall Street on Wednesday:

Guggenheim upgraded AutoNation to buy from neutral

Guggenheim upgraded the new and pre-owned auto retailer on valuation and earnings upside among other things.

"Our positive view is supported by: 1) an attractive valuation, with shares trading at ~8.5x our FY21 EPS, a discount to long-term averages and pre-COVID levels, despite our 2021 EPS forecast being ~40% above 2019 and a much better balance sheet emerging from the crisis (second lowest net leverage position in group after Lithia Motors); 2) earnings upside from capital deployment (buybacks and AutoNation USA standalone used car store expansion), with visibility to $7+ in 2021 EPS (vs $5.78 consensus)"

Deutsche Bank initiated Roku as buy

Deutsche Bank said in its initiation of the digital media player streaming company that it had done an "impressive" job of building out its consumer base.

"Roku is the market leader in the connected TV market, with close to 50% market share of global CTV streaming hours, and is seeing strong growth opportunities as more consumers and advertisers spend time and money on streaming content. The company has done an impressive job building out the largest installed base in the industry and monetizing it through its Platform business, helping transition the company from a lower margin hardware company to a higher margin software/media company."