Check out today's top analyst calls from around Wall Street, compiled by The Fly.
GOLDMAN GETS ANOTHER DOWNGRADE ON 1MDB RISKS: BofA Merrill Lynch analyst Michael Carrier downgraded Goldman Sachs (GS) to Neutral from Buy and also removed the stock from the firm's US 1 List, stating that the uncertainty around the 1MDB investigation could limit the stock's upside potential if markets stabilize. While he doesn't expect the matter to have a long-term impact on the business, Carrier does note that the timing of the investigation is unknown and it may take some time to be resolved. Based on disclosure thus far, he views the more likely outcome as a fine/settlement, though "it is impossible to know the outcome of the matter," Carrier concluded. He lowered his price target on Goldman shares to $225 from $280. The Fly notes that on November 21, Morgan Stanley analyst Betsy Graseck downgraded Goldman Sachs to Equal Weight from Overweight, citing the risks and uncertainties related to the bank being investigated for its role in raising funds for 1MDB.
DEUTSCHE CUTS GE TARGET TO $7: Deutsche Bank analyst Nicole DeBlase thinks the key debates over General Electric (GE) can be boiled down to the trajectory of GE Industrial free cash flow and whether the company is headed for a liquidity crisis. In a new research report titled "Laying Out a Realistic Bear Case," the analyst walks through a new base and bear case free cash flow analyses. The bad news is that in the bear case, GE Industrial free cash flow remains in negative territory through 2021, DeBlase writes. The analyst built up a segment-by-segment bear case earnings model, which assumes continued declines at Power and modest downturns in Renewables, Aviation and O&G. The "good news," however, is that even in this "drastic scenario," the analyst does not foresee a liquidity crisis. Nevertheless, the analyst cut her price target for General Electric shares to $7 from $11 and keeps a Hold rating on the name. DeBlase's price target relies on her base case, not her bear case. Her base case "embodies a more likely scenario," whereby an economic downturn does not happen through 2021.
WWE RAISED TO OVERWEIGHT: JPMorgan analyst David Karnovsky upgraded WWE (WWE) to Overweight from Neutral and raised his price target for the shares to $87 from $84. Shares are off 26% from peak levels reached at the end of September and now trade at 14.5 times estimated 2020 adjusted OIBDA, Karnovsky tells investors in a research note. While the valuation is a slight premium to WWE's historical average, the company now has greater visibility into multi-year OIBDA growth and capital returns, driven by step-ups and escalators on U.S. TV contracts, with upside from international agreements, mainly in India, says the analyst.
'WORST IS OVER' FOR UNDER ARMOUR, SAYS WELLS FARGO: Wells Fargo analyst Tom Nikic upgraded Under Armour (UAA) to Market Perform from Underperform and raised his price target for the shares to $23 from $22. The stock closed yesterday up 13c to $23.14. After two-plus years of "choppy operating performance," the worst is now over for Under Armour, Nikic proclaims in a research note to investors. "Simply put, the bear case appears to have run out of steam," adds the analyst. Further, he believes the upcoming analyst day on December 12 is more likely to be a positive catalyst than a negative one. Management will lay out bullish long-term sales and margin targets, Nikic predicts. As such, the analyst no longer sees a "negative skew" to the shares and views the near-term setup as favorable.
