- RBC upgraded Chevron to sector perform from underperform.
- Telsey upgraded Home Depot to outperform from market perform.
- Jefferies initiated Southwest Airlines as buy.
- Barclays initiated Allstate and Travelers as overweight.
- Citi upgraded Charles Schwab to buy from neutral.
- Morgan Stanley downgraded Sprout Social to equal weight from overweight.
- Loop initiated DraftKings as buy.
- Wells Fargo upgraded VF Corp and Under Armour to overweight from equal weight.
- BMO downgraded Moderna to market perform from outperform.
- Citi added a positive catalyst watch on Elanco.
- HSBC downgraded Las Vegas Sands to hold from buy.
- Morgan Stanley initiated Farfetch as overweight.
(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Tuesday: RBC upgraded Chevron to sector perform from underperform RBC upgraded the oil company and said it sees upside and is "fairly valued." "Following the recent sell-off, Chevron now trades at a slight premium to the sector, which we see as justified given its balance sheet strength and position in the investment cycle." Telsey upgraded Home Depot to outperform from market perform Telsey upgraded the home improvement retailer after it announced it was re-acquiring HD Supply Holdings on Monday. "First, by acquiring HD Supply (adds over $3B per year to sales), Home Depot should leap into the market leading position in the fragmented and growing $55B maintenance, repair, and operations market from its current market share of less than 5% today. Moreover, earnings accretion is anticipated to begin in 2021." Note: This call was before the bell on Monday. Jefferies initiated Southwest Airlines as buy Jefferies named the airline a top pick and said it was well-positioned to "outperform and take share." "Our rating is based on: 1) LUV as a domestic carrier (96% vs 55% for mainline peers), with US traffic set to return by 2022; and 2) Strong liquidity coming into the pandemic, which positions the company to outperform and take share. 2023 revs are 1% below 2019 levels, vs 13% below for peers." Barclays initiated Allstate and Travelers as overweight Barclays initiated several insurance companies and said they were at the "winning end of a pandemic induced recession." " Allstate 's strong franchise tends to get overshadowed by its dwindling market share to direct writers. We are constructive that a transformation is under way through concurrent business model updates and M & A. ... . Progressive is known as a defensive stock, but our call takes a longer-term view. PGR may need to hold more capital to support an evolving business mix, which could lower return on equity." Citi upgraded Charles Schwab to buy from neutral Citi said in its upgrade of Charles Schwab that the stock could be poised for a breakout due to the positive coronavirus vaccine news. "Cognizant of the recent bounce following early reaction to the U.S. election, still somewhat pending outcome and COVID-19 vaccination news, we think the Group could see meaningful absolute P/E multiple – and potentially additional relative P/E multiple — expansion as investors essentially begin to "bring forward" normalized EPS." Morgan Stanley downgraded Sprout Social to equal weight from overweight Morgan Stanley downgraded the social media software solutions company mainly on valuation. " Sprout Social' s story has plenty of room to run with a $25B total addressable market, but the valuation gap vs software as a service peers has narrowed significantly. We move to the sidelines, as we await the next chapter of either inflecting revenue growth or profitability." Loop initiated DraftKings as buy Loop initiated the fantasy sports betting company and said it would emerge as the "biggest beneficiary" of the online gaming industry. "The most significant drivers are online sports betting and iGaming. We estimate the true TAM for these markets is over $30bn in the U.S. at maturity, significantly greater than the ~$20bn total addressable market that other analysts are modeling. We expect DKNG to emerge the undisputed share leader and biggest beneficiary of the rapidly growing domestic online gaming industry." Wells Fargo upgraded VF Corp and Under Armour to overweight from equal weight Wells Fargo said in its upgrade of sports equipment company Under Armour and apparel retailer VF Corp, that it sees investors shifting to "recovery" plays especially as the coronavirus vaccine begins to roll out. " VFC is well-known as one of the strongest operators in our space, but the stock has underperformed other "best in class" operators of late. ... .In recent years, we've seen several big turnarounds by athletic brands and we think UAA is poised to be the next." BMO downgraded Moderna to market perform from outperform BMO downgraded the biotech company after its vaccine announcement on Monday and said it now sees "limited upside" as shares have priced in the vaccine news. "We downgrade MRNA to Market Perform from Outperform and increase our target price to $109 on our view of limited upside from current trading levels following announcement of a positive COVE Phase 3 outcome. We believe a near-term best-case scenario is mostly reflected in shares including an mRNA-1273 emergency use authorization before year-end and full approval mid-2021." Citi added a positive catalyst watch on Elanco Citi added a positive catalyst watch on the pet pharmaceutical company ahead of its investor day and said it was bullish on the company's upcoming product pipeline. " Elanco is likely to provide more clarity on its product pipeline which includes five new product launches targeted by the end of 2021E and 25 by 2024E. At a minimum, we will look out for a blockbuster product candidate ( > $100mn in potential sales) that will compete in a large market." HSBC downgraded Las Vegas Sands to hold from buy HSBC said in its downgrade of the Las Vegas Sands that it sees limited upside and a slower pace of recovery. "We downgrade to Hold as we think the market may be overly optimistic about the pace of recovery. ... .We prefer Macau operator Melco Resorts as Macau is the first cross-border destination to mainland China for now and we believe Melco's premium mass position will help attract returning demand. Morgan Stanley initiated Farfetch as overweight Morgan Stanley initiated the luxury online fashion retailer and the company is poised to take share from other brick and mortar players as well as other online stores. " FTCH 's unique marketplace model is well positioned to take share from wholesale competitors (both brick and mortar and pure-play eCommerce players) as it allows brands greater control over pricing and better access to customer data."
The entrance to Moderna's headquarters in Cambridge, MA.
Brian Snyder | Reuters
(This story is for CNBC PRO subscribers only.)
Here are the biggest calls on Wall Street on Tuesday: