Check out today's top analyst calls from around Wall Street, compiled by The Fly.
CITI UPGRADES AT&T TO BUY: Citi analyst Michael Rollins upgraded AT&T (T) to Buy from Neutral with an unchanged price target of $34. The analyst said he expects AT&T to further benefit from the "measured" promotional environment in wireless, while improving its competitive position from FirstNet and the marketing of its network enhancements, branded 5G Evolution. Further, the company has "several levers" to manage free cash flow and support its net debt deleveraging goals for 2019, Rollins tells investors in a research note. In addition, the analyst believes the stock's 23% decline year-to-date provides a better risk/reward scenario. AT&T trades at a price-to-earnings ratio of about eight times the analyst's revised 2019 outlook and at a dividend yield of about 6.7%. He sees a buying opportunity at current share levels.
JPMORGAN CUTS PFIZER TO NEUTRAL: JPMorgan analyst Christopher Schott downgraded Pfizer (PFE) to Neutral from Overweight with an unchanged price target of $46. The analyst cited valuation for his move to the sidelines after a "strong" 2018 which has to the stock up over 20% year-to-date. Further, he believes Pfizer's product pipeline needs to expand following the patent expiration of Lyrica in 2019. In late morning trading, shares of Pfizer are down almost 1.5% to $43.74.
GOLDMAN CUTS ACORDA TO SELL: Goldman Sachs analyst Salveen Richter downgraded Acorda Therapeutics (ACOR) to Sell from Neutral and cut his price target for the shares to $10 from $19. The analyst expects "significant erosion" to Ampyra revenue beginning in Q4 due to generic entry. This places "considerable focus" on Inbrija to serve as the next growth driver, and Street expectations are for an approval by the January 5 FDA action date, Richter said. The analyst, however, sees risk "given precedent around a one-cycle review for a drug/device combination." Further, he believes the drug has a "limited" commercial outlook and projects Inbrija U.S. peak sales of $550M, lower than Acorda's guidance of greater than $800M, based on physician feedback. One doctor noted that Inbrija should be a niche drug given existing therapies that are easily titrated to mitigate off-period side effects and potential risk of dyskinesia from increasing levodopa concentration, Richter wrote. In addition, the analyst sees "limited optionality" on Acorda's pipeline as the assets are "still early or risky." Thus, the shares face a lack of near-term catalysts, cautioned Richter.
WOLFE STARTS APPLE AT PEER PERFORM: Wolfe Research analyst Steven Milunovich initiated Apple (AAPL) with a Peer Perform rating and $185 price target. Milunovich is bullish long-term, but has concerns about the near-term and would wait for catalysts. He also said some observers are calling Apple a services company as the App Store and new media offerings make services financially meaningful. The analyst wouldn't get carried away with these efforts, but believes they show a willingness to adopt new business models and move toward better financial predictability, which reduces complexity, is good for the customer and often advantageous for the vendor as well.
GOLDMAN LOWERS PRICE TARGETS ON MICRON, WESTERN DIGITAL: Goldman Sachs analyst Toshiya Hari lowered his price target on Neutral-rated Micron (MU) to $44 from $45 and on Western Digital (WDC) to $41 from $47 while also lowering his EPS view on Nvidia (NVDA) to $6.80 from $7.40 and AMD (AMD) to 50c from 52c following his tech/semi's-focused tour in Asia that included meetings with over 25 supply chain companies. The analyst claims that the findings and datapoints from the discussions were "mostly negative, especially those related to memory, HDDs, semi cap, GPUs, and smartphones". Hari sees the near-term server demand as "weak" with flattish Q1, and AI adoption being lower than expected in the supply chain. The analyst notes that industry participants saw AMD with continued market share gains as it launches its EPYC 2 products and the cadence for Intel (INTC) platform slowing as its upgrade cycle lengthens to three years from two. For Nvidia, the analyst also expects the ongoing inventory correction to spill into the April quarter.
