Here are Thursday's biggest analyst calls of the day: Penn, Spotify, Bed Bath & Beyond, RH & more

Published Thu, Sep 10 20208:18 AM EDTUpdated Thu, Sep 10 20208:48 AM EDT

Key Points

Goldman Sachs upgraded Sanderson Farms to buy from neutral.
Jefferies downgraded Churchill Downs to hold from buy.
Telsey upgraded RH to outperform from market perform.
Credit Suisse upgraded Spotify to outperform from neutral.
Rosenblatt initiated Penn National Gaming as buy.
Wedbush added Bed Bath & Beyond to the best ideas list.
DA Davidson initiated Ulta as buy.
MKM initiated Exxon as buy.

(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Thursday: Goldman Sachs upgraded Sanderson Farms to buy from neutral Goldman said in its upgrade of the poultry producing company that it saw an "increasingly attractive" valuation. "We upgrade shares of SAFM to Buy from Neutral, with 14% implied upside to our revised $139, 6-month price target ($127 prior). Following notable YTD underperformance , we see increasingly attractive valuation for SAFM in light of near-term poultry market expectations that have already been reset lower, while our above-consensus FY21 EPS estimate suggests a return to a more normalized operating environment in the year ahead." Jefferies downgraded Churchill Downs to hold from buy Jefferies downgraded the race track operator and said its valuation is "stretched" among other things. " CHDN to Hold from Buy, new target $191 vs $161 prior, 1) Some growth opportunities in IL and KY less certain in terms of timing post-COVID, while others remain in our model/target, 2) Digital strategies are more measured and still formative as sports and iGaming activate, 3) Valuation is relevant and stretched, given the growth is in lower value casinos vs Churchill Downs/Derby franchise and digital." Telsey upgraded RH to outperform from market perform Telsey upgraded the stock after the company's second-quarter earnings beat expectations on the top and bottom line . "We are upgrading our rating on RH to Outperform from Market Perform driven by the combination of better than expected demand that has accelerated to 38% in 3Q20-to-date from 16% in 2Q20—as the high-income consumer is healthy and is investing in their homes—and a step change in the operating margin to ~20% from ~15%, driven primarily by higher product margins as RH has elevated its product offering and pricing." Credit Suisse upgraded Spotify to outperform from neutral Credit Suisse upgraded the music streaming service and said it sees the company's third-quarter earnings report in October as a "primary catalyst." "Two factors have made us incrementally positive on SPOT shares: 1) we see potential upside to consensus monthly active users and subscriber estimates through 2021 from exclusive podcasts, as well as a recent partnership with mobile carrier MTS in Russia; and 2) we now see a greater likelihood that major labels will participate in Spotify's Marketplace and help expand gross margins, a change from our prior view. ... .We see primary catalysts as 3Q earnings in October and 2021 guidance in January." Rosenblatt initiated Penn National Gaming as buy Rosenblatt initiated the operator of casinos and racetracks as buy and said its partnership with Barstool could make it the "dominant" sports betting media company. "With a unique, content focused strategy, we believe PENN has the opportunity to gain significant share in the online sports betting market at above peer margins driven by their Barstool partnership and physical footprint. As sports betting moves from niche to mainstream, we believe Barstool can take advantage of this greenfield opportunity to be the dominant sports betting media company in the US." Wedbush added Bed Bath & Beyond to the best ideas list Wedbush add the retail home goods store to its best ideas list and said the company's turnaround is continuing and is on the cusp of a "dramatic turnaround" in profitability. "Undoubtedly, sustaining comparable sales growth is critical to the outlook, and we see continued growth ahead as the company not only benefits from a shift in discretionary spending to home goods that should persist, but also gains traction with improved merchandising, value communication and inventory planning to drive sales under the leadership of new CEO Mark Tritton and his highly qualified team; as a well-known national retailer, BBBY has the opportunity to much better convert strong traffic to sales." DA Davidson initiated Ulta as buy DA Davidson initiated the beauty store and said it should benefit as the economy continues to reopen. "We are initiating coverage on Ulta Beauty with a BUY rating and a $280 target price based on a P/E of 22x our above consensus 2022 EPS estimate. Although trends remain challenging in the beauty business, we believe ULTA should benefit from the continued reopening of the economy. Thus, we believe it makes sense to get in front of this potential improvement, particularly as ULTA should take share during the rebound as other retailers struggle." MKM initiated Exxon as buy MKM initiated the oil company as buy said it sees it returning to positive free cash flow in 2021-2022. "Assuming NYMEX $47.50/$55 oil prices and $3/$2.80 natural gas prices in 2021/2022, we anticipate ExxonMobil further reduces capital expenditures to $16-$17 billion per annum in the next two years. ... .Given diminished market capitalization, business model should generate ~17% corporate return."

The Spotify app on an iPhone.

Fabian Sommer | picture alliance | Getty Images

(This story is for CNBC PRO subscribers only.)

Here are the biggest calls on Wall Street on Thursday:

Goldman Sachs upgraded Sanderson Farms to buy from neutral

Goldman said in its upgrade of the poultry producing company that it saw an "increasingly attractive" valuation.

"We upgrade shares of SAFM to Buy from Neutral, with 14% implied upside to our revised $139, 6-month price target ($127 prior). Following notable YTD underperformance , we see increasingly attractive valuation for SAFM in light of near-term poultry market expectations that have already been reset lower, while our above-consensus FY21 EPS estimate suggests a return to a more normalized operating environment in the year ahead."

Jefferies downgraded Churchill Downs to hold from buy

Jefferies downgraded the race track operator and said its valuation is "stretched" among other things.

"CHDN to Hold from Buy, new target $191 vs $161 prior, 1) Some growth opportunities in IL and KY less certain in terms of timing post-COVID, while others remain in our model/target, 2) Digital strategies are more measured and still formative as sports and iGaming activate, 3) Valuation is relevant and stretched, given the growth is in lower value casinos vs Churchill Downs/Derby franchise and digital."