Check out today's top analyst calls from around Wall Street, compiled by The Fly.
ORACLE CUT TO NEUTRAL AT MACQUARIE: Macquarie downgraded Oracle (ORCL) to Neutral from Outperform, with analyst Sarah Hindlian telling investors that her checks suggest that closing the fourth quarter "was a struggle," with partners saying they had to rush to discount orders up until the final days. Several leading partners saw softening of the pipeline and she believes "there is a step function lower" in demand for Oracle, the analyst said. While she sees several potential tailwinds for Oracle in FY20 - including less marketing spending, improving uptake of Cloud ERP, increased prices on support and adoption of 18c/autonomous DB - she also thinks outperformance will be capped because the company is struggling to execute on its strategy. Hindlian has a $55 price target on Oracle shares.
BANK OF AMERICA BOOSTED TO OUTPERFORM AT BMO: After the close on Monday, BMO Capital analyst James Fotheringham upgraded Bank of America (BAC) to Outperform from Market Perform with an unchanged price target of $37. The analyst expects upward consensus estimates revisions and a "multiple re-rating" to drive 34% total return in the shares. Bank of America's current valuation multiple is 15% below its long-term average, Fotheringham noted. Further, even if the Federal Reserve cuts rates, positive earnings revisions from better fees, tax rates, provisions and buybacks should "more than offset" any related net interest margin dilution, contended the analyst.
GOLDMAN SACHS UPGRADES SOLAR STOCKS: Goldman Sachs analyst Brian Lee upgraded SunPower (SPWR) and Sunrun (RUN) to Buy from Neutral, and SolarEdge (SEDG) to Neutral from Sell as part of a broader research note on U.S. residential solar stocks anticipating "volume tailwinds" in the second half of 2019 given the recent signs of strength in the sector's financing environment. The analyst's price target on SunPower goes to $11 from $6, Sunrun to $20 from $15 and SolarEdge to $52 from $35. Among the key catalysts, Lee cited California's mandate for new home rooftop solar that will require every new home built in the state starting next year to have a solar system, estimating the requirement to add 350MW-700MW opportunity for the sector which would account for 15%-30% increase in year-over-year volume. The analyst further noted that the timing of the 30% federal ITC tax credit expected to be phased down to 26% next year related to solar power installation will drive "heavy solar installation volumes between now and 2023" as companies seek to "safe harbor" volumes into year-end 19 in order to qualify future installations for the full 30% credit.
RAYMOND JAMES CUTS KB HOME TO UNDERPERFORM: Raymond James analyst Buck Horne downgraded KB Home (KBH) to Underperform from Market Perform ahead of the company's earnings report in a move to highlight his increased near-term caution with the homebuilding sector. In a research note to investors, Horne cited factors including above-average cyclical valuations amid declining earnings estimates across the industry, softening macro-economic data points and indicators of a late-cycle shift, and an analysis of recent MSA-level re-sale market statistics suggesting competitive inventory remains elevated into summer for the downgrade. Horne also downgraded Lennar (LEN) to Market Perform from Outperform.
SNAP PRICE TARGET RAISED TO $20 AT BTIG: BTIG analyst Richard Greenfield raised his price target on Snap (SNAP) to $20 and kept his Buy rating on shares, saying his "conviction" in the company's recovery story has increased "meaningfully" and the morale of its staff has improved "notably." The analyst believes that the company's engagement metrics should be driven higher by 3rd apps like Yolo as well as "increased filter excitement," improved Discovery section, the launch of gaming and the benefit gathered from the rebuild of the Android OS app.
