- Cowen named Amazon a best idea.
- DA Davidson downgraded DoorDash to neutral from buy.
- JPMorgan downgraded Michaels and BJ's to neutral from overweight.
- Citi upgraded Clorox to buy from neutral.
- Wells Fargo initiated Denny's as overweight.
- Stifel downgraded Hanesbrands to hold from buy.
- JPMorgan added Ulta to the focus list.
- BMO downgraded Disney to market perform from outperform.
- UBS upgraded McDonald's to buy from neutral.
- Gordon Haskett downgraded Airbnb to underperform from buy.
(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Monday: DA Davidson downgraded DoorDash to neutral from buy DA Davidson downgraded the food delivery service mainly on valuation "We believe DASH deserves a premium multiple due to its category leading scale, superior growth rate/market share gains, and early profit trends, but the stock's current valuation appears to leave little room for any performance hiccups in DASH's core biz over the next year and perhaps gives DASH full credit for building out its promising-but-nascent grocery/essentials biz." JPMorgan downgraded Michaels and BJ's to neutral from overweight JPMorgan said in its downgrade of Michaels and BJ 's that they are likely to see "trend deceleration" in December and January due to "earlier" holiday sales. "First, both names are up strongly YTD (and since we added them to the AFL). Second, they are COVID winners that are likely to see trend deceleration in December/January on earlier holiday sales (also when the COVID case surge ebbs in the case of BJ) and then 2021 guidance will loom as we approach 4Q earnings." Citi upgraded Clorox to buy from neutral Citi said in its upgrade of the stock that its valuation was too "attractive" to be ignored. "Given our belief that there is upside to this estimate, coupled with our take that CLX i s a more well-balanced company than many give it credit for (this isn't just about disinfecting wipes, its about grilling + salad dressing + Brita too), we consider this valuation to be attractive." Wells Fargo initiated Denny's as overweight Wells Fargo initiated the chain restaurant company and said it sees "upside" to Street numbers and an "attractive" risk/reward. "We are initiating coverage of Denny's Corporation with an Overweight rating and view the near term margin risk-reward as attractive, with our $16 PT implying ~17% upside from current levels.We believe investors currently underappreciate the potential margin and EBITDA improvement for DENN's business model as the company/economy emerges from the COVID-19 pandemic." Stifel downgraded Hanesbrands to hold from buy Stifel said in its downgrade of the multinational clothing company that the risk/reward "encourages a wait and see approach." "We are trimming 2021 estimates, reducing our 12 mos. TP from $17 to $15, and downgrading HBI shares from Buy to Hold. While constructive on long-term opportunities, we see it prudent to take a wait and see approach on HBI shares into 2021. We expect new CEO Stephen Bratspies to use 2021 as a year to invest in change and rebase the financials as a platform for improvement in future years." JPMorgan added Ulta to the focus list JPMorgan added the beauty supply chain store to its focus list and said the company is one of the "best" coronavirus recovery stocks. "We are adding ULTA to the Analyst Focus List as a growth idea given an expected strong cyclical upswing in a post-vaccine world. As we have been noting since early October, we view ULTA as one of the best COVID-recovery stocks in retail given the lack of social gatherings, mask mandates, and the elongation of work/learn from home while it still has a market-leading platform in a good category, solid unit growth, and is one of the biggest potential share gainers from the increasing mall dislocation." BMO downgraded Disney to market perform from outperform BMO downgraded the media and theme park giant and said it was re-establishing Netflix as the firm's top pick. "We believe improved vaccination rates could help DIS continue to be a solid 're-opening' play, but with considerable multiple expansion recently for both initial vaccine news and Thursday's direct-to-consumer (DTC) investor day, we step to the sidelines and NFLX retakes the Top Pick mantle." Read more about this call here. UBS upgraded McDonald's to buy from neutral UBS upgraded the fast food chain and said it sees an "attractive" risk/reward. "We are upgrading shares of MCD as we believe risk/reward now skews significantly to the upside. MCD maintains one of the more compelling and visible US comp catalyst paths over the next several months and through '21, reflecting multiple drivers and investments." Cowen named Amazon a best idea Cowen named Amazon a best idea and said it sees "big margin expansion" in 2021. "We expect strong cont'd rev growth in '21 coupled with margin exp'n as AMZN comps COVID costs and massive 50% fulfillment sq ft growth. Two potential drivers of shares include (i) consensus est's rising and (ii) multiple expansion, as AMZN is trading near midpoint of historical EV/EBITDA multiples." Gordon Haskett downgraded Airbnb to underperform from buy Gordon Haskett double downgraded the stock and said it had a "stretched" valuation. "An overwhelming majority of investors we've spoken with have been unable to justify Airbnb' s valuation premium relative to online travel agency's and expressed interest in realizing their quick gains. Investors that we've spoken with like Airbnb's business model and want to be long-term holders, but are now looking at selling the stock because they no longer feel comfortable owning it trading at a 300-400% valuation premium to OTAs."
Adam Jeffery | CNBC
(This story is for CNBC PRO subscribers only.)
Here are the biggest calls on Wall Street on Monday: