Check out today's top analyst calls from around Wall Street, compiled by The Fly.
AT&T UPGRADED AT COWEN: Cowen analyst Colby Synesael upgraded AT&T (T) to Outperform from Market Perform. The analyst thinks the plan laid out to get Entertainment EBITDA stable is credible, the dividend is safe and the stock is cheap. The advertising strategy, while still unproven, could drive significant upside in outer years, Synesael told investors. He said while execution remains a risk, the reward is attractive. Synesael raised his price target to $36 from $34 on AT&T shares.
JPMORGAN PREFERS AT&T TO VERIZON: JPMorgan analyst Philip Cusick upgraded AT&T to Overweight from Neutral with an unchanged price target of $38. He also added the stock to his firm's U.S. Analyst Focus List as an Income idea. The analyst left recent management meetings and the company's analyst meeting with a better understanding of expectations around organic growth as well as how AT&T plans to de-lever the business using organic free cash flow and asset sales. Further, Cusick believes weakening video trends are now embedded in consensus expectations. At $31 per share, the stocks' risk/reward is "skewed to the upside and AT&T investors are being paid to wait." At these levels, Cusick prefers AT&T to Verizon Communications (VZ). The analyst downgraded the latter to Neutral from Overweight with an unchanged price target of $62. The analyst said that as much as he likes Verizon's "consistent and improving execution," the combination of a new management team and reporting lines with the stock's 17% year-to-date increase make the risk/reward less compelling than peers AT&T and Comcast (CMCSA, CMCSK). Cusick, however, still sees the stock increasing 2.7% to his $62 target in the next year along with the 4.0% dividend yield.
CATERPILLAR UPGRADED TO BUY AT BOFA: BofA/Merrill analyst Ross Gilardi upgraded Caterpillar (CAT) to Buy and increased his price target to $163 from $140, citing attractive valuation as macro risks recede. Gilardi has increased conviction following Fed Chairman Powell's comments last week that were seemingly less hawkish on future interest rate cuts and the temporary cease fire in additional US-China tariff increases. The analyst sees potential for the multiple to recover given strong overall demand trends and opportunities for strong earnings growth in the years to come. In late morning trading, Caterpillar shares are over 3% higher to $139.95.
ROKU UPGRADED TO BUY AT DA DAVIDSON: DA Davidson analyst Tom Forte upgraded Roku (ROKU) to Buy from Neutral with a maintained price target of $49. The analyst said the stock is "attractive" following reports of a 90-day U.S.-China trade truce reached this weekend as it alleviates a "significant near-term risk to shares," since all of the company's products are manufactured in China. Forte added that Roku's risks around its competition with Amazon (AMZN) are likely priced in, while also noting that he is "impressed" with the company's "leadership role in the emerging over-the- spending market" and its ability to exploit the related advertising opportunity.
COSTCO CUT TO NEUTRAL AT CITI: Citi analyst Kate McShane downgraded Costco Wholesale (COST) and lowered her price target for the shares to $238 from $257. The analyst sees "more headwinds than tailwinds likely in 2019" for Costco. Her top Hardlines & Broadlines idea for 2019 is AutoZone (AZO) and her favored smaller cap ideas are BJ's Wholesale (BJ) and RH (RH). In late morning trading, Costco shares are lower by 1.2% to $228.46.
