Check out today's top analyst calls from around Wall Street, compiled by The Fly.
WEDBUSH CUTS LULULEMON TO NEUTRAL: Wedbush analyst Jen Redding downgraded lululemon (LULU) to Neutral from Outperform and lowered her price target to $155 from $176. In a research note to investors, Redding said that while she continues to see lululemon as best in class among specialty retailers, she is moving to the sidelines in anticipation of potentially less margin upside ahead, based on insights from proprietary data products. She sees measured guidance as likely, as a turbulent February likely hits lululemon just as hard as the rest of retail, which may be taken less positively by investors given the notable growth metrics and margin expansion the retailer has typically posted in recent quarters.
OPPENHEMIER BOOSTS BEST BUY TO OUTPERFORM: Oppenheimer analyst Brian Nagel upgraded Best Buy (BBY) to Outperform from Perform with an $86 price target. In a research note to investors, Nagel said Best Buy has undergone a significant transformation under the direction of new senior leadership to one of retail's preeminent omnichannel operators, and added that the market narrative on Best Buy is now more upbeat. Nagel said Best Buy is well positioned against a healthy spending backdrop, but feels investors are still not fully embracing improved sales and EPS power.
WEDBUSH CUTS BOOKING TO NEUTRAL: Wedbush analyst James Hardiman downgraded Booking Holdings (BKNG) to Neutral from Outperform, stating that he believes the company's dominant position in Europe will be favorable in the long term, but is likely to represent a liability in 2019 as it is could amplify risks of earnings revisions and multiple compression. His recent survey of nearly 200 consumers from the U.K. and Europe showed that Brexit-related uncertainty is significant and appears to be worsening, said Hardiman, who also noted near and medium-term issues in continental Europe. He lowered his price target on Booking shares to $1,850 from $2,000.
JPMORGAN BOOSTS LUMENTUM TO OVERWEIGHT: JPMorgan analyst Samik Chatterjee upgraded Lumentum Holdings (LITE) to Overweight from Neutral and raised his price target for the shares to $65 from $50. The analyst sees a "solid" outlook for the company's telecom business amid "strong" growth led by 5G investments and upside to synergy targets relative to recent acquisition of Oclaro. Further, he sees limited downside risk relative to volume expectations for Apple's (AAPL) iPhone, which he notes has been a "key driver of sentiment on the shares." Stabilization of its iPhone volume outlook should drive focus back to the "strong" fundamentals in Lumentum's primary telecom business, Chatterjee said.
JPMORGAN CUTS PPG TO UNDERWEIGHT: JPMorgan analyst Jeffrey Zekauskas downgraded PPG Industries (PPG) to Underweight from Neutral with an unchanged price target of $106. PPG shares have been drifting higher in 2019 as the market continues to prefer higher quality and less cyclical materials companies to their more cyclical counterparts, Zekauskas said. However, the analyst believes general economic business conditions are "arguably weaker than they have been because of decreased rates of economic growth in China and in Europe." He continues to think that an 11.5 times multiple of 2019 EBITDA represents fair value for PPG, which implies a $106 share price objective for 2019. Further, PPG is unlikely to split itself into two different coatings entities as Trian has suggested, Zekauskas contended.
Zekauskas also downgraded Sherwin-Williams (SHW) to Neutral from Overweight with an unchanged price target of $435. With the stock near this target, the analyst downgrades the company on valuation. Sherwin is a high-quality company that trades at multiples that are among the highest in the coatings universe, Zekauskas said.
