Here are Tuesday's biggest analyst calls of the day: Netflix, Micron, Hostess Brands, Gap, Disney & more

Published Tue, May 18 20218:30 AM EDT

Key Points

JPMorgan upgraded MGM to overweight from neutral.
Goldman initiated Pool Corp. as buy.
Rosenblatt upgraded Snowflake to buy from neutral.
Raymond James upgraded Palo Alto Networks to outperform from market perform.
Bank of America reiterated Netflix as buy.
Barclays named BP a top pick.
Bank of America downgraded Altice USA to underperform from neutral.
Credit Suisse upgraded Gap to neutral from underperform.
Stephens reiterated Hostess Brands as overweight.
Wells Fargo reiterated Ralph Lauren and L Brands as overweight.
Deutsche Bank reiterated its buy rating on Micron.
Deutsche Bank reiterated its buy rating on Disney.
Bank of America reiterated its buy rating on Penn.

Here are the biggest calls on Wall Street on Tuesday: JPMorgan upgraded MGM to overweight from neutral JPMorgan said in its upgrade of the casino company that it saw "momentum" in Las Vegas and domestic casinos. "We are upgrading MGM to Overweight for the following reasons: an 11% pullback over the last month, or a reduction of ~$2.5b in its market cap, providing an opportunity to buy with fundamentals continuing to inflect positively, momentum at its domestic casinos, particularly in Las Vegas, where we think every week continues to build in terms of revenues and margin improvement, and a segment that can drive positive estimate revisions," Read more about this call here. Goldman initiated Pool Corp. as buy Goldman initiated the pool company with a buy rating and said it said the secular shift to warmer and more Southern states was a positive for Pool. "The US pool industry had a total addressable retail market of ~$20bn in 2020, up from $15bn in 2017 driven by macro as well as secular shifts including increased consumer spend on outdoor living, home price appreciation, and migration towards warmer Southern and Western states. Given these trends, along with favorable company-speciﬁc factors, we look for top and bottom line growth ahead of our broader products coverage, driving our positive overall outlook." Read more about this call here. Rosenblatt upgraded Snowflake to buy from neutral Rosenblatt said in its upgrade of the stock that it was bullish on the company heading into its earnings report on May 26. "Given the healthy IT spending environment so far this year, the accelerating Digital Transformation trends, and the strong Q1 performance from the leading Cloud Service Providers, we expect Snowflake to meet and possibly exceed our 93% y-o-y Product Revenue growth estimate." Raymond James upgraded Palo Alto Networks to outperform from market perform Raymond James said in its upgrade of the stock that the company was entering a period of "healthy growth." "PANW has underperformed significantly year to date and we previously noted our concern that next gen annual recurring revenue guidance did not appear conservative. We do still see this as a risk, but the stock has been penalized as relative valuation has compressed and our focus has now been turned to increased confidence that PANW can enter into a period of healthy growth and incremental profitability that are hallmarks of outperforming stocks in this space." Read more about this call here. Bank of America reiterated Netflix as buy Bank of America reiterated its buy rating on the stock and said despite the media consolidation, Netflix was still the "clear winner." "We see the winners within the space as mega names that can afford to consistently invest billions of dollars in content and that have global distribution networks. From our point of view, Netflix is the clear winner in both aspects and the big question is: how will Netflix retain the throne?" Barclays named BP a top pick Barclays named the oil giant a top pick and said investors will be rewarded by BP 's switch to low carbon. "Ultimately, we think the switch to low carbon will be rewarded by investors, but for now it is the performance of the underlying businesses we expect to drive the share price. We rate the shares Overweight with a 475p/sh price target." Read more about this call here. Bank of America downgraded Altice USA to underperform from neutral Bank of America said in its downgrade of the cable company that it saw better opportunities elsewhere in its coverage. "In light of our relative ratings system, we are downgrading ATUS from Neutral to Underperform as we believe other opportunities in our coverage universe are more attractive." Credit Suisse upgraded Gap to neutral from underperform Credit Suisse upgraded the retailer and said it saw a lack of negative catalysts in the near term. "Our negative view was largely based on concerns about GPS's ability to achieve several of the inputs to its Analyst Day targets of ~$3.30 in EPS by 2023 based on revenue CAGR's and margins GPS struggled to achieve pre-COVID. While we continue to have several of those concerns, we see several real near-term positives that will be bigger positive offsets." Stephens reiterated Hostess Brands as overweight Stephens reiterated the maker of Twinkies with an overweight rating after a change in analyst coverage and said it should benefit from the economy reopening. "We are assuming coverage of Hostess Brands with an Overweight rating and $18 price target. We think as management continues to leverage consumer insights and data to inform innovation, this should augment the benefit Hostess should see from a post-COVID recovery and improvement in customer mobility" Wells Fargo reiterated Ralph Lauren and L Brands as overweight Wells reiterated several retail stocks as top picks and said it was "upbeat" about the sector. "While the near-term has clearly become more difficult to navigate, we remain bullish on the US consumer and our space (though we do believe stock selection will be more relevant going forward as we shift early to mid-cycle). Our Top Picks in the space today are CPRI, GPS, LB , TPR and RL ." Deutsche Bank reiterated its buy rating on Micron Deutsche Bank reiterated its buy rating on shares of Micron , but said the firm's supply chain checks suggest "more uncertainty ahead." "Our most recent checks point to continued memory pricing strength in CQ2 and CQ3 that we believe is better than the market anticipated a couple of months ago. However, there has also been increasing concerns of inventory build in the supply chain that makes further price increases in CQ4 less certain." Deutsche Bank reiterated its buy rating on Disney Deutsche reiterated its buy rating on Disney and said it sees a "modest acceleration" in Disney+ subscribers. "Our lower PT was driven by a lower subscriber and revenue trajectory for Disney+. However, we do not believe that the Disney + subscriber growth outlook will decelerate from F2Q, nor do we think the outlook has meaningfully diminished." Bank of America reiterated its buy rating on Penn Bank of America reiterated its buy rating on the operator of casinos and race tracks and said it sees an "attractive" opportunity at current levels. "Gaming stocks have been volatile of late, particularly those exposed to the sports betting theme, which has tracked the sell-off in other high growth areas in the market. DraftKings, Inc. and Penn Natl Gaming are -41% from their March highs, with the S & P 500 only -1%. We believe that most of this revaluation is market-related vs. fundamental, with other high-growth sectors/stocks -25-45% from their highs."

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

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