Here are the biggest analyst calls of the day: Disney, Deere, Apple, Keurig Dr. Pepper & more
- BMO upgraded Keurig Dr. Pepper to outperform from market perform
- BMO downgraded Dow to market perform from outperform
- Imperial Capital downgraded Disney to in-line from outperform
- Mizuho upgraded Symantec to buy from neutral
- Baird upgraded Deere to outperform from neutral
- J.P. Morgan lowered its price target on Apple to $233 from $235
- Mizuho lowered its price target on Teva Pharmaceuticals to $11 from $18
- Guggenheim initiated Kontoor Brands as buy
- William Blair initiated Eventbrite as outperform
- Bank of America upgraded The Mosaic Company to buy from neutral
Here are the biggest calls on Wall Street on Monday:
BMO upgraded Keurig Dr. Pepper to 'outperform' from 'market perform'
BMO upgraded the stock and said its valuation discount to its non-alcohol peers is now too large to ignore.
"We are upgrading KDP to Outperform as its widening valuation discount relative to non-alcoholic beverage peers has become too large to ignore, especially given high visibility to KDP's superior, mid-teens, earnings growth outlook in the next three years, misplaced apprehensions about its post-synergies earnings growth potential (+hsd%), and attractive B/S optionality once leverage falls below 3x by 2021. We are raising our target price to $34, based on a higher multiple (24x 2020 P/E) in anticipation of better investor appreciation of the sustainability of KDP's superior EPS growth."
BMO downgraded Dow to 'market perform' from 'outperform'
BMO said the chemicals company is seeing a more "challenging" 2019 due to global trade issues.
"DOW remains one of the most diversified pure-play-commodity companies in the space, with solid management and a clear focus on shareholder value. However, 2019 is turning out more challenging as global trade issues persist, resulting in faltering macro growth. We are reducing our earnings outlook, taking into account current commodity fundamentals including weakness in Silicons, MDI/TDI, and PE, and assuming limited recovery through the bulk of 2019. With our new estimates, our target drops to $52, which we believe is insufficient to outperform our chemicals coverage."
Imperial Capital downgraded Disney to 'in-line' from 'outperform'
Imperial downgraded the stock citing a "record" valuation.
"We are lowering our rating on DIS shares to In-Line from Outperform, as the stock is up 25.7% since establishing our Outperform rating on 11/27/18. We are maintaining our one-year price target of $147, now representing upside of only 3.8%. Our F2019 EPS estimate remains unchanged in the aggregate. Our F2021 estimates decline due to additional losses at Hulu."
Read more about this call here.
Mizuho upgraded Symantec to 'buy' from 'neutral'
Mizuho upgraded the cybersecurity software maker mainly on valuation.
"Notwithstanding the challenges that SYMC faces, we cite several reasons for our favorable view of the stock at current levels, including what we expect will be increased focus on optimizing the business. We're increasing our price target to $23 from $22."
Baird upgraded Deere to 'outperform' from 'neutral'
Baird said there will be a demand for farm equipment due to bad weather, which has driven up the price of corn and other commodities.
"A rapid, meaningful shift is occurring in US ag as extreme weather overshadows the Trade War. Corn has rallied sharply breaking out of a five-year range as persistent wetness has raised supply concerns. Prices seem poised to move higher; this helps farm economics which should drive equipment demand (equipment buys reduce farmer tax liability, replacement demand is already present). DE's recent 2H19 Ag production cut sets up company for strong FY20, TITN's footprint spared excessive moisture meaning its customers are in best position to spend."
J.P. Morgan lowered its price target on Apple to $233 from $235
J.P. Morgan lowered its price target on Apple after trimming the forecast for iPhone shipments.
"We are trimming our forecast for C2Q-C4Q19 iPhone shipments by -4% to 139.5 mn. However, we view the current macro headwinds as cyclical and likely resolved with a trade resolution, and only modestly tweak our C2020 and C2021 iPhone shipment forecast. Additionally, we are maintaining our forecast for growth in shipments in C2020 & C2021 led by larger degree of spec upgrades planned for Sep-2020."
Mizuho lowered its price target on Teva Pharmaceuticals to $11 from $18
Mizuho lowered its price target on the company's opioid litigation issues.
"In spite of our previously contrarian outlook on Teva's opioid liability, the proposal to create a large Negotiation Class implies that Teva may ultimately opt to participate in a global settlement, which warrants increased caution and legal reserves. We lower our PT to $11 from $18 based on a higher WACC in our DCF, inclusion of the $85M Oklahoma settlement, and an incremental $1.0B in legal liability in the DCF."
Guggenheim initiated Kontoor Brands as 'buy'
Guggenheim said the maker of Lee and Wrangler jeans has a "solid" portfolio with "rich histories."
"We initiate coverage of Kontoor Brands with a BUY-rating and introduce a $35 PT. We favor KTB's 1) portfolio of solid brands with rich histories, 2) strong management team, and 3) robust dividend yield (annual dividend would represent ~8%at today's levels). While denim is a highly competitive segment in the apparel market, we believe KTB's robust cash generation has the potential to reward investors through the delevering of the balance sheet, a L-T dividend yield target of ~5%, and an acute focus on total shareholder return (TSR). These factors warrant a BUY-rating, in our view."
William Blair initiated Eventbrite as 'outperform'
William Blair said the ticketing and management website has a "long pathway" for growth.
"Efficient Creator Acquisition, High Retention Rates, Complementary Offerings Underpin Growth Opportunity. Eventbrite has an efficient go-to-market strategy in which over 95% of the creators on-board themselves (and account for over 50% of revenue). Its creator-centric platform encourages a high degree of repeat usage (year-one retention rate has averaged 97% over the past three years and it has retained about 80% of creator gross ticket fees four years after acquiring them). Eventbrite is also developing a range of complementary solutions to help expand and improve how it serves creators."
Bank of America upgraded The Mosaic Company to 'buy' from 'neutral'
Bank of America said that after touring Mosaic's assets in Brazil last week and are more "comfortable" with the "uncertainty." Mosaic is the largest U.S. producer of potash and phosphate fertilizer.
"Mosaic shares are down by a third in the last 4 months (vs. the S&P500 up 4% in this period) due to a combination of 2Q earnings risks from an unprecedented wet US spring, uncertainty associated with Brazilian tailings dams, and a weaker pricing outlook for phosphate and potash (P and K). All fertilizer suppliers will likely be affected by the wet US spring, yet CF Industries (CF) and Nutrien (NTR) shares are flat over 4 months, and demand for nutrients could rebound in 4Q with rising corn prices. Regarding the dam risks, we toured Mosaic's assets in Brazil last week and have not only come away comfortable with the uncertainty, but are also more constructive on the long-term outlook for Fertilizantes."