Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MORGAN STANLEY CUTS CATERPILLAR TO EQUAL WEIGHT: Morgan Stanley analyst Courtney Yakavonis downgraded Caterpillar (CAT) to Equal Weight from Overweight with a price target of $145, down from $150. She believes that the U.S. Construction Equipment market peaked in 2019 and that Energy & Transportation, or E&T, markets will fail to re-accelerate in 2020, leading Yakavonis to now expect negative growth in the company's two largest business segments in 2020 as well as less upside in Resources. Her sales and EPS estimates are 4% and 2%, respectively, below consensus, and her updated estimates now call for a mild year-over-year earnings decline in 2020, Yakavonis told investors.
CREDIT SUISSE CUTS MACY'S, GAP, L BRANDS TO UNDERPERFORM: Credit Suisse analyst Michael Binetti downgraded Macy's (M) to Underperform from Neutral with a price target of $12, down from $19. In a research note to investors, Binetti said he thinks structural challenges are poised to accelerate in 2020 and thinks consensus estimates for 2020 are likely to be revised significantly lower. Binetti added that same-store sales trends for Q3 are likely running below Street estimates and guidance to a big Q4 SSS inflection is "tough to embrace" without downside gross margin risk. Binetti also downgraded Gap (GPS) to Underperform from Neutral with a price target of $14, down from $20, and L Brands (LB) to Underperform from Neutral with a price target of $14, down from $22.
BOFA BOOSTS SNAP TO BUY: BofA/Merrill analyst Justin Post upgraded Snap (SNAP) to Buy from Neutral with an $18 price target. The stock has sold off despite "solid" industry and advertising spend channel checks, Post told investors in a research note. In addition, the analyst said the ongoing Discovery content rollout gives him higher conviction on Snap's ability to expand its average revenue per user. He also believes the possibility of a first positive EBITDA quarter in Q4 could change the stock's narrative.
BOFA RAISES CHIPOTLE TO NEUTRAL: BofA/Merrill analyst Gregory Francort upgraded Chipotle Mexican Grill (CMG) to Neutral from Underperform with a price target of $850, up from $590, ahead of its Q3 earnings next week. The analyst expects the company to generate better comps and margins over the near term given its "strong" sales momentum and normalizing avocado prices, even though he is "struggling" with the valuation on the stock. Francort added that his new price target models a FY20 earnings multiple of 50-times, up from 38-times assumed in prior valuation.
STIFEL UPGRADES CRONOS GROUP TO BUY: Stifel analyst Andrew Carter upgraded Cronos Group (CRON) to Buy from Hold with a price target of C$14.00, down from C$16.50. The analyst Cronos is "unconstrained" in its ability to invest towards a $200B global opportunity with C$2B in cash on hand the resources of Altria Group (MO), Carter told investors in a research note titled "Crowning a New King in the North." The analyst believes Cronos will show an "enhanced revenue growth profile" that leverages the distribution capabilities of Altria to build its U.S. CBD business and demonstrate "break-through product potential" in the Canadian vapor segment. Given the company's "advantaged and enhanced position," investors should buy Cronos shares following their recent pullback, said Carter.
CITI UPS ALTRIA TO NEUTRAL: Citi analyst Adam Spielman upgraded Altria Group (MO) to Neutral from Sell with a price target of $46, up from $45. The analyst now expects "less bad" cigarette volumes next year. Electronic vapor usage will fall due to the negative publicity around vaping and the imminent flavor ban, which will help cigarettes, Spielman told investors in a research note. Further, with Altria shares below his price target, the analyst no longer thinks the stock looks expensive relative to overseas peers. With that said, Spielman still expects the short-term news flow, both on FDA regulation and earnings, "to be difficult."
