Here are Monday's biggest analyst calls of the day: Tesla, Microsoft, Chipotle, Netflix & more

Published Mon, Oct 18 20218:42 AM EDT

Here are the biggest calls on Wall Street on Monday: Goldman Sachs downgrades NetApp to sell from neutral Goldman said in its downgrade of the cloud data services and data management company that it sees a worsening IT spending outlook. "We downgrade NetApp to Sell from Neutral as we begin to factor in a moderating IT spending environment in 2022. We note that our proprietary EAI (Expected Activity index) US IT spending indicator has declined materially for a 3rd straight month in September and is off meaningfully from record high levels seen between April and June." Bank of America downgrades PNC to neutral from buy Bank of America said in its downgrade of the bank that it sees a lack of catalysts. "We are downgrading PNC to Neutral from Buy. We believe the stock's premium valuation at 15x 2022 P/E vs. 12.4x median for super regional peers more than adequately reflects the potential for a superior return profile and strong execution." UBS downgrades Virgin Galactic to sell from neutral UBS said in its downgrade of Virgin Galactic that it's concerned about the long delay until the next powered flight. "In early September, what was supposed to be a late Sept powered flight was delayed to late Oct following a supplier part issue. Late last week, that next powered flight was pushed to 3Q22 with commercial service starting in 4Q22, driving our estimates lower. Read more about this call here. Barclays downgrades Disney to equal weight from overweight Barclays downgraded the entertainment and media giant due to slowing Disney+ growth. "Part of this slowdown could be a function of growth pull forward into 2020 and promo roll offs, but we believe it could be due to structural factors capping growth as we detail in the note. In order to get to its long term streaming sub guide, DIS needs to more than double its current pace of growth to at least the same level as Netflix." Read more about this call here. UBS reiterates Netflix as buy UBS raised its price target on shares of Netflix to $720 from $620 and said it sees "subscribers inflecting with a robust slate" heading into the streaming giant's earnings report on Tuesday. "We expect 3Q to show inflecting subscriber trends as ramping content production, the return of popular series and new hits drive improved subscriber acquisition, engagement and growth." Piper Sandler reiterates Chipotle as a top pick Piper Sandler said it sees a "compelling" entry point heading into Chipotle earnings on Oct. 21. "Our field checks suggest consensus expectations are beatable considering modest sequential monthly improvements. We are in-line with our +14% comp (+200 bps) for 3Q21." RBC upgrades Fortune Brands to outperform from sector perform RBC said in its upgrade of the home and security consumer products company that consensus expectations are too low. "We believe that investor sentiment around FBHS has become too negative given fears around supply chain issues, cost pressures and peer read-throughs, and view the current price as an attractive entry point to own one of the higher quality businesses in our space at a reasonable valuation. Investors are already aware of some normalization in the retail channel and we believe the fear of a potential slowdown in China is at least on investors' radars at this point." Morgan Stanley upgrades Five9 to overweight from equal weight Morgan Stanley said in its upgrade of the cloud software company that it's bullish on the stock after Five9's merger with Zoom was called off. " FIVN' s growth prospects are unhampered by the dissolution of the ZM/FIVN merger agreement. Path to PT likely to take a couple of quarters as fewer unknowns and ramping large accounts, but see analyst day as nearest catalyst." Credit Suisse reiterates Facebook as outperform Credit Suisse kept its outperform rating on shares of the social media giant and said it sees the potential for better than expected ad revenue growth when the company reports earnings next week. "Fundamentals seemed to have taken a back seat recently for FB shares as negative data points around the Newsfeed algorithm and service outages grabbed investor attention." Truist upgrades Occidental Petroleum to buy from hold Truist said in its upgrade of the stock that shareholders' returns are about to "crank up." "We forecast OXY' s record FCF to continue combined with asset monetizations resulting in < 2x leverage by potentially early next year. As such, we believe the company will soon discuss plans to return its quarterly dividend to 2019/2020 levels along with the possibility of an additional variable dividend and/or stock repurchase program Read more about this call here. Morgan Stanley reiterates Microsoft as overweight Morgan Stanley kept its overweight rating on shares of Microsoft and said it sees "building momentum" heading into the company's earnings report on Oct. 26. "Revenue outperformance may prove operating margins more durable than feared, driving EPS upside. Our model suggests durable high-teens EPS growth." Barclays reiterates Netflix as overweight Barclays said in a note to clients on Monday morning that it was bullish heading into the company's earnings report on Tuesday. "We are positive on Netflix on account of (a) virtuous cycle of content/distribution scale and consumer inertia; (b) consequent pricing power; (c) international TAM; (d) management and execution quality; (e) longer-term operating leverage. While valuation does price in many years of growth, the company has beaten top-line expectations relatively consistently." Credit Suisse reiterates Alphabet as outperform Credit Suisse reiterated its outperform rating on shares of the internet giant and said it sees additional growth drivers for 2022 and beyond as Alphabet prepares to unveil its earnings report next week. "We maintain our Outperform rating based on the following: 1) ongoing monetization improvements in Search advertising through product/AI driven updates, 2) greater-than-expected revenue contribution from non-Search businesses." Mizuho reiterates Microsoft as a top pick Mizuho kept its buy rating on shares of Microsoft and said it sees favorable demand trends heading into the company's earnings report on Oct. 26. "We expect another healthy upside quarter, and believe that Azure revenue growth can modestly accelerate on a constant currency basis. And over the longer-term, an upcoming price increase for the Microsoft 365 and Office 365 commercial product suites should have a significant financial impact on the model." Citi reiterates Tesla as sell Citi kept its sell rating on shares of Tesla but said it sees a favorable set-up heading into the automaker's earnings report on Oct. 20. "We expect Tesla to report a strong quarter on robust Q3 auto demand and relatively fewer supply disruptions vs. peers." Morgan Stanley downgrades U.S. Steel to underweight from overweight Morgan Stanley said in its downgrade of the steel company that it sees a free cash flow generation slowing over the next few years. "We are double-downgrading X to UW as we think the company is still in the early innings of a significant investment cycle, which will dampen FCF generation for the next few years Read more about this call here .

Dado Ruvic | Reuters

Here are the biggest calls on Wall Street on Monday: