Check out today's top analyst calls from around Wall Street, compiled by The Fly.
HSBC UPGRADES UBER, LYFT TO BUY: HSBC analyst Masha Kahn upgraded Uber Technologies (UBER) to Buy from Hold with a price target of $44, down from $49, and upgraded Lyft (LYFT) to Buy from Hold with a price target of $62, down from $67. Investor sentiment has turned "more sour" on ride-hailing stocks following large reported losses, regulatory headlines out of California and concerns around slowing growth, Kahn noted. However, with Lyft and Uber shares down 23% in the last three months, regulatory concerns are priced in, said the analyst, Further, Kahn continues to see "a lot of optionality" around product improvements for both Uber and Lyft. In addition, with 60% gross margins in the U.S. and over 70% internationally, the ride-hailing businesses of companies can reach profitability if both pull back on sales and marketing and leverage the fixed cost base, said the analyst. Kahn also believes food delivery is a "free" option for Uber investors.
UBS CUTS HP INC. TO NEUTRAL: UBS analyst John Roy downgraded HP Inc. (HP) to Neutral from Buy and lowered his price target to $20 from $26. The analyst pointed to downside risk for the company's flat expectations in its printing supplies business amid low visibility and uncertain macro backdrop. Roy further believes that HP's PC margin would decline by more than consensus as the company passes through the component price declines and the sales mix shift away from commercial. The analyst also cited additional uncertainty from HP's CEO transition.
WELLS FARGO DOWNGRADES DICK'S SPORTING GOODS: Wells Fargo analyst Tom Nikic downgraded Dick's Sporting Goods (DKS) to Market Perform from Outperform with an unchanged price target of $39. The analyst moved to the sidelines with the shares up +25% year-to-date and hitting his price target. Now that Dick's has returned to positive comps and the stock has re-rated, the risk/reward is more evenly balanced, Nikic told investors in a research note. Further, the analyst believes questions persist around the company's ability to "take the next big step toward EBIT growth."
STIFEL CUTS AURORA CANNABIS TO SELL: Stifel analyst W. Andrew Carter downgraded Aurora Cannabis (ACB) to Sell from Hold with a price target of C$5.00, down from C$7.00. The analyst sees "meaningful downside" from current share levels following the company's "disappointing" Q4 earnings release. The quarter pointed to a "less robust" in-market performance and difficulty to continue positioning for the larger global opportunity, Carter told investors in a research note. He believes this will manifest in a discounted valuation for Aurora relative to its global peers. Further, Aurora's financing efforts will be challenged against the backdrop of "overwhelmingly negative" investor sentiment towards the sector, "damaged credibility," and limited catalysts near-term to drive enthusiasm for the shares, said Carter.
KEYBANC UPGRADES OIL E&P COMPANIES: KeyBanc analyst Leo Mariani upgraded Whiting Petroleum (WLL) to Overweight from Sector Weight, with an $11 price target. The analyst expects Whiting Petroleum to have an outsized benefit from the move higher in oil prices as it is one of the oiliest E&Ps with oil cuts of 64% and 63% in the second half of 2019 and 2020, respectively. Further, Mariani noted that the shares are down around 67% year to date, which he thinks puts the stock in a good position for a rebound. Whiting Petroleum amended its credit facility, which allows its to put its pending debt maturities on its revolver and to avoid the secured bond market, he added.
Mariani also upgraded Jagged Peak Energy (JAG) to Overweight from Sector Weight with a price target of $10, Centennial Resource Development (CDEV) to Overweight from Sector Weight with a price target of $6.50, and SM Energy (SM) to Overweight from Sector Weight with a price target of $14, citing the companies' exposure to higher oil prices.
