Here are Thursday's biggest analyst calls of the day: Dick's, PayPal, Peloton, Square, & more

Published Thu, Aug 27 20208:15 AM EDT

Key Points

Stephens named Darden a best idea.
Oppenheimer downgraded Dick's to perform from outperform.
Goldman Sachs raised its price target on Peloton to $96 from $84.
Mizuho initiated Visa, Mastercard, PayPal, and Square as buy.
Morgan Stanley upgraded Dick's to overweight from equal weight.
Credit Suisse reinstated Marvell as outperform.

(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Thursday: Stephens named Darden a best idea Stephens named the restaurant hospitality company and owner of Olive Garden as a best idea and said it saw a "compelling" opportunity due to above-average results during the pandemic among other things. "During the five years leading up to the pandemic, Darden consistently outperformed the industry on comp sales and comp traffic. This top-line performance is one of the reasons that Darden actually expanded restaurant-level margins between 2015 and 2019 while almost every other full-service operator saw compression. Flash forward to the current crisis, and Darden's key brands, Olive Garden and LongHorn, are among the best-performing in the industry." Oppenheimer downgraded Dick's to perform from outperform Oppenheimer downgraded the company after its strong second-quarter earnings and said it thought the company's sales and earnings were going to be "shorter-term in nature." "Over the past several weeks, fundamental at DKS have strengthened and shares have outperformed, topping our prior objective. We have reviewed closely our stance on DKS. While we admire the efforts of management to thrive amid consumer sector upheaval, we look upon stronger sales and earnings lately as largely shorter-term in nature and are hardpressed to envision the market awarding shares a meaningfully higher multiple. Goldman Sachs raised its price target on Peloton to $96 from $84 Goldman raised its price target on the exercise and media fitness company to a Street high and said the landscape has been "altered" and that it sees an "acceleration and steepening" of the adoption curve. "Expectations for Peloton 's growth and profitability, both in the near and long term, remain far too low, despite the obvious signals of the company's doubling of production, the weeks long order backlog that has persisted through the pandemic, and the absence of any material marketing spend. As we've noted before, this isn't simply pull forward, but rather an acceleration and steepening of the adoption curve as network effects are amplified, marketing spend is repurposed, and the fundamental fitness landscape is altered." Mizuho initiated Visa, Mastercard, PayPal, and Square as buy Mizuho initiated several payment company stocks and said it sees a "long-term growth trajectory." "Initiating coverage on nine US payments companies: V, Buy; MA , Buy; PYPL , Buy; SQ , Buy; GPN, Neutral; FIS, Buy; FISV, Buy; FLT, Neutral; WEX, Buy. ... .In times of unprecedented uncertainty, our deep-dive analyses, coupled with unique insights from evidence-based research, should help quantify long-term growth trajectories for the US payments group. We are most enthused about Buy-rated PYPL, SQ, V, FISV, and WEX." Morgan Stanley upgraded Dick's to overweight from equal weight Morgan Stanley upgraded Dick 's after the company beat Wall Street estimates with its second-quarter earnings repor t on Wednesday and said it sees earnings upside over the next two years. "Our new 2021 and 2022 EPS estimates sit 10% and 30% above consensus, respectively. Second, we are more confident in sustainable gross margin expansion due to 1) merchandise margin tailwinds such as greater private label penetration and category resets, and 2) improving e-commerce profitability from lower variable fulfillment costs. Third, risk/reward is skewed positively as our base case assumes a 12.5x P/E multiple, in line with historical levels, while there could be significant upside in our bull case if the stock gets re-rated similar to other retail category killers." Credit Suisse reinstated Marvell as outperform Credit Suisse reinstated the semiconductor company and said it sees a long-term opportunity as Marvell is one of the "most strategic assets remaining" in the semis space. "Along with XLNX, we see MRVL as one of the most strategic assets remaining in Semis and while we see ample opportunity for organic success, we also see MRVL as a compelling acquisition candidate. ... .We see MRVL 's ability to accelerate revenue compound annual growth rate from 5% historic CAGR to 10-15% due to outsized exposure to technology inflection points in 5G, Datacenter/Cloud, and increasing AI/Acceleration Compute – which in total could represent $1.5bn of incremental Rev by 2025, 50% higher than FY21 Rev of $3.0bn."

Dick's Sporting Goods

Scott Olson | Getty Images

(This story is for CNBC PRO subscribers only.)

Here are the biggest calls on Wall Street on Thursday:

Stephens named Darden a best idea

Stephens named the restaurant hospitality company and owner of Olive Garden as a best idea and said it saw a "compelling" opportunity due to above-average results during the pandemic among other things.

"During the five years leading up to the pandemic, Darden consistently outperformed the industry on comp sales and comp traffic. This top-line performance is one of the reasons that Darden actually expanded restaurant-level margins between 2015 and 2019 while almost every other full-service operator saw compression. Flash forward to the current crisis, and Darden's key brands, Olive Garden and LongHorn, are among the best-performing in the industry."

Oppenheimer downgraded Dick's to perform from outperform

Oppenheimer downgraded the company after its strong second-quarter earnings and said it thought the company's sales and earnings were going to be "shorter-term in nature."

"Over the past several weeks, fundamental at DKS have strengthened and shares have outperformed, topping our prior objective. We have reviewed closely our stance on DKS. While we admire the efforts of management to thrive amid consumer sector upheaval, we look upon stronger sales and earnings lately as largely shorter-term in nature and are hardpressed to envision the market awarding shares a meaningfully higher multiple.