- Truist initiated Texas Roadhouse as buy.
- Credit Suisse downgraded Conagra to underperform from neutral.
- Guggenheim downgraded Coca-Cola to hold from buy.
- Needham named Uber a top pick.
- Stifel upgraded JD.com to buy from hold.
- Citi upgraded Micron to buy from sell.
- Goldman Sachs downgraded First Solar to sell from buy.
- Deutsche Bank added a catalyst call buy idea on Lululemon.
- Longbow named Papa John's a top pick.
- William Blair initiated Airbnb as outperform.
- Wedbush initiated McDonald's as outperform.
- Bank of America named DR Horton a top pick.
- Wells Fargo raised its price target on Roku to $414 from $275.
(This story is for CNBC PRO subscribers only.) Here are the biggest calls on Wall Street on Tuesday: Truist initiated Texas Roadhouse as buy Truist initiated the restaurant steak franchise company and said it sees "strong" sales after the coronavirus passes among other things. " TXRH is the 4th largest full-service restaurant chain in the US and largest in the steak category. We expect TXRH to 1) generate strong sales growth during the post-COVID recovery, 2) expand margins above pre-COVID levels." Credit Suisse downgraded Conagra to underperform from neutral Guggenheim downgraded Conagra on concerns about the "sustainability" of "at-home food consumption." "However, we think the company is likely set up for disappointment in FY 22 because of its overly optimistic view regarding the sustainability of above-normal at-home food consumption during the pandemic." Guggenheim downgraded Coca-Cola to neutral from buy Guggenheim downgraded the stock on valuation and said the company is going through a "transition" year. " Coca-Cola returning to 5-6% organic growth post-Covid is attainable, in our view, but it's more asset-light structure limits cost leverage that we estimate will ultimately confine EPS growth in the high-single digits range." Needham named Uber a top pick Needham named the ride sharing company a top pick and said the "recovery" was not yet fully priced in to the stock. "While several companies in our universe posted outsized returns in '20, we look elsewhere in our space for renewed outperformance, pegging UBER as our top pick on the basis that it is well hedged for both basic recovery scenarios that aren't yet fully reflected in the stock." Stifel upgraded JD.com to buy from hold Stifel upgraded the China e-commerce company and said it sees many "secular growth trends" in the year ahead. " JD.com remains one of the leading eCommerce platforms in China with a number of secular growth trends to support healthy long-term growth and ongoing margin expansion." Citi upgraded Micron to buy from sell Citi double upgraded the computer memory and storage company and said it sees "favorable" supply and demand for Micron over the next year. "Although the stock has appreciated an impressive 40% in the last two months and is trading at a higher valuation than at any time during the previous upturn, we believe there is still plenty of upside as DRAM upturns usually last two years and supply/demand looks favorable over at least the next year." Goldman Sachs downgraded First Solar to sell from buy Goldman double downgraded the solar company and said it sees "margins peaking" among other things. " FSLR 's earnings and revenue have already peaked for this cycle, and we expect FSLR's gross margins to similarly peak in 1H21 as near-term cost reductions are offset by pricing declines ahead of Section 201 tariff expiration." Deutsche Bank added a catalyst call buy idea on Lululemon Deutsche added a short term catalyst call buy on the stock and said Lululemon was "compelling" with unique growth opportunities. "The stock is down 5% over the past month (vs. the S & P 500 up 1%) and down 11% from its 9/2/20 high (vs. the S & P 500 up 3%), and we anticipate a positive 4Q update next week with the company raising its total sales growth guidance to the low-20% range vs. prior mid- to high-teens." Longbow named Papa John's a top pick Longbow named the pizza franchise operator as a top pick and said it sees more innovation in the company's product pipeline. "While the COVID-19 outbreak undoubtedly benefitted PZZA 's predominantly delivery/take-out focused model, we believe a portion of investors lost sight in the process of substantial internal improvements implemented by new management over the last 12+ months." William Blair initiated Airbnb as outperform William Blair said in its initiation of the online travel site that it had "superior" brand awareness among other things. "We are initiating coverage of Airbnb with an Outperform rating due to its worldwide network and reach, strong consumer awareness with robust engagement among both hosts and guests, and superior brand awareness." Wedbush initiated McDonald's as outperform Wedbush initiated the fast food company and said it sees "multiple expansion" on the horizon among other things. "We believe MCD 's ongoing menu, technology, marketing, and CapEx investments render visibility into sustained MSD global SSS growth very high in a post- COVID global restaurant environment." Bank of America named DR Horton a top pick Bank of America said the home builder was the "most attractive" name in its home building coverage. "We maintain DHI as our top homebuilding pick in 2021, given its size/scale, focus on the more "need based" entry-level/first-time homebuyer, consistent execution, operating model that allows it to effectively compete in term of price/availability with existing homes in each market and its strategic ownership of Buy-rated land developer, FOR." Wells Fargo raised its price target on Roku to $414 from $275 Wells Fargo raised its price target on the streaming media company to a Street high and said it sees a big runway due to as streaming behavior continues to widen. "Despite a strong rally in ROKU we think there is a big runway for ROKU's AVOD-driven ARPU in 2021+. Streaming behaviors for the 2015-2019 period were largely driven by content on subsciption video on demand (e.g. NFLX, Amazon Prime, Disney+) and YouTube, whereas 2020 and beyond suggests a big push into monetizable AVOD."
Uber Eats workers wait for orders in central Kiev, Ukraine July 31, 2019.
Valentyn Ogirenko | Reuters
(This story is for CNBC PRO subscribers only.)
Here are the biggest calls on Wall Street on Tuesday: