- Goldman Sachs downgraded Best Buy to sell from neutral.
- Truist initiated Disney as buy.
- Goldman Sachs upgraded Ralph Lauren to buy from sell.
- Goldman Sachs upgraded Levi to buy from sell.
- New Street downgraded Tesla to neutral from buy.
- Goldman Sachs upgraded Five Below to buy from neutral.
- Citi downgraded Expedia and Booking Holdings to neutral from buy.
- Wolfe upgraded Eli Lilly to outperform from peer perform.
- Wolfe initiated Airbnb as outperform.
- Guggenheim initiated Formula One as buy.
(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Thursday: Goldman Sachs downgraded Best Buy to sell from neutral Goldman downgraded the big box electronics chain store on concerns about margin pressure and earnings in 2021. " Best Buy is one of the best run retailers in the U.S. and continues to evolve its omnichannel, but as we look to 2021 we see risk for the stock based on: 1) very strong compares; not only from strong sales in 2020 but the ability to capture ~80% of sales when the stores were closed, making it a harder compare, 2) its lack of gross margin flow through in 2020, 3) valuation. Truist initiated Disney as buy Truist said in its initiation of the entertainment giant that it was a "core" large-cap holding. "In media and entertainment (66% of pre-Covid revenue), we view DIS as well-positioned in the secular transition to direct-to-consumer (DTC) internet TV on account of the company's portfolio of assets and competencies." Goldman Sachs upgraded Ralph Lauren to buy from sell Goldman double upgraded the fashion company and praised the company's strong digital channels as well as management's initiatives to "elevate the brand." "While we remain guarded on underlying brand momentum, we acknowledge several management initiatives to elevate the brand and believe RL will beneﬁt from an inﬂection in the overall apparel category. In addition, we view RL as a key beneﬁciary of the direct to consumer and Digital channel shift detailed in this note." Goldman Sachs upgraded Levi's to buy from sell Goldman said in its double upgrade of the clothing company and denim maker that it sees an "attractive" risk/reward. " LEVI has delivered on several initiatives since the emergence of the COVID-19 pandemic and importantly the company has seen an acceleration in growth in its ecommerce business which is now proﬁtable. As we look ahead, we see an attractive risk/reward as LEVI shifts sales to the DTC channel and continues to diversify its US wholesale business to higher-growth partners, driving stronger sales, margins, and returns." New Street downgraded Tesla to neutral from buy New Street said in its downgrade of Tesla that near term upside is already priced in. "Long-term valuation remains attractive: 2025 target price of $1,200 & material sources of upside beyond (Continued growth, Autopilot, Energy Storage, Insurance). 2021 to play out strong: deliveries above consensus, strong margin trajectory, but no room for near-term valuation upside." Goldman Sachs upgraded Five Below to buy from neutral Goldman said in its upgrade of the discount chain retailer that it sees a "favorable" set-up for the stock heading into 2021 due to the company's "brand awareness" and digital strategy among other things. "As we look into 2021, with a vaccine on the horizon, we see a favorable set-up for the stock as the business is set to cycle negative compares, the multi-price initiative — Five Beyond — is becoming a bigger piece of the equation, the digital strategy is helping brand awareness..." To read more about the call, see the story here . Citi downgraded Expedia and Booking Holdings to neutral from buy Citi downgraded the online travel companies due to concerns surrounding business traveling being "permanently impaired" among other things. "Recent vaccine headlines have caused most investors to expect 2022 revenue to match 2019 revenues. If we assume this is true and augment this with: 1) recent capital raises, 2) each firm's cost savings programs, 3) potential multiple expansion, and 4) resumption of share repurchase activity, our Blue Sky scenario suggests Booking can reach $2,450 per share and Expedia can reach $170 per share." Wolfe upgraded Eli Lilly to outperform from peer perform Wolfe upgraded the pharmaceutical company and said it was a good way for investors to "gain exposure" to the Alzheimer's disease category among other things. "We like LLY for several other reasons that include: (1) LLY is one of the few long-term 'growth' names in large cap biopharma; (2) LLY gains investors exposure to the Alzheimer's disease category in three different ways, with little downside risk to share price; and (3) there are a handful of other pipeline readouts in 2021 that could be meaningful, adding upside to our LT forecasts." Wolfe initiated Airbnb as outperform Wolfe initiated online vacation rental website which begins trading today and said it expects the company to take share over the long term. " ABNB has become an iconic brand as the company has revolutionized travel, in our view. We believe ABNB has secular growth and will take share from traditional accommodations over the long term (hotels and other rentals)." Guggenheim initiated Formula One as buy Guggenheim initiated the auto sports racing company and said it sees shares trending higher as the "pinnacle" of the motor sports world with millions of fans. "Over the long term, we see Formula One' s unique intrinsic asset value as well positioned to drive shares higher. F1 is at the pinnacle of the motor sporting world globally with a rich 70-year history and passionate fan base numbering in the hundreds of millions."
Shoppers walk past the entrance to the Polo Ralph Lauren clothing store on Fifth Avenue in Midtown Manhattan in New York City.
Robert Alexander | Getty Images
(This story is for CNBC PRO subscribers only.)
Here are the biggest calls on Wall Street on Thursday: