Check out today's top analyst calls from around Wall Street, compiled by The Fly.
CANACCORD CUTS TESLA TO HOLD ON VALUATION, CORONAVIRUS: Canaccord Genuity analyst Jed Dorsheimer downgraded Tesla (TSLA) to Hold from Buy with an unchanged price target of $750. The analyst sees a "balanced" risk/reward for investors to lock in profits following the recent rally in the shares. Further, China's coronavirus is a "clear headwind" risk to Tesla's Shanghai facility, suggesting a more "pragmatic position" is warranted, Dorsheimer tells investors. Given the 3,000 per week China Model 3 production expectations in a country that remains on lockdown, a reset of expectations in Q1 "is likely and thus needs to be reflected in the valuation," contends Dorsheimer. As such, the analyst believes "patient" investors will likely get a more attractive entry point into the name. With that said, Dorsheimer continues to favor Tesla as the leading electric vehicle "juggernaut." The company's April battery day will be a "critical positive milestone" for investors to understand how formidable Tesla's lead is, according to the analyst.
BAIRD DOWNGRADES ALBERMARLE AFTER TESLA RIDE-ALONG RALLY: Baird analyst Ben Kallo downgraded Albemarle (ALB) to Neutral from Outperform with a price target of $100, up from $90. The shares closed Tuesday up $9.65, or 12%, to $90.43. Albemarle has traded higher in conjunction with Tesla's stock move and a renewed investor interest in electric vehicles, Kallo tells investors in a research note. While the analyst remains constructive on long-term trends, he thinks Albemarle's near-term risk/reward is now more balanced. Further, there is some risk to the company's Catalysts and Bromine segments related to the coronavirus outbreak and slower end-market demand, contends Kallo. He believes Albemarle shares are fairly valued.
BERENBERG SEES BAD NEWS FOR BASF IN RISE OF TESLA: Berenberg analyst Sebastian Bray downgraded BASF (BASFY) to Hold from Buy with a price target of EUR 66, down from EUR 77. He said that as cracker margins have fallen to decade lows and Tesla's share price has climbed to record highs, there is "one unavoidable conclusion," namely that market consensus for 2025 global electric vehicle penetration of about 12% is too low. The analyst, who cites the "electric shock for the chemicals industry," also downgraded Covestro (COVTY) to Sell from Hold and upgraded Umicore (UMICY) to Buy from Hold given the potential impact to chemical makers from the faster than anticipated shift toward electric vehicles. Bray lowered his price target on Covestro shares to EUR 32 from EUR 44 and raised his price target on Umicore to EUR 53 from EUR 32.
DISNEY GETS 'STREET-HIGH' $180 TARGET FROM TWO FIRMS AFTER DISNEY+ SUCCESS: Following Disney's (DIS) fiscal first quarter report and associated call last night, Rosenblatt analyst Bernie McTernan reiterated his Buy rating on the shares and raised his price target to $180 from $175, telling investors that the quarter increased his confidence in the company's ability to transition to a direct-to-consumer, or DTC, streaming model. The analyst, who noted that Disney remains his top pick in media, raised his global Disney+ subscriber estimate to 48M at the end of FY20 from 39M previously. He is also assuming a $535M impact in aggregate on the March and June quarters from the coronavirus, McTernan noted.
Wells Fargo analyst Steven Cahall raised his price target for Disney to $180 from $175 following quarterly results. The analyst says that Disney sentiment has been "perplexingly tepid" since the Disney+ launch in early November, adding that angsts included perhaps-too-high sub expectations, post-Mandalorian churn risk, cable cord cutting, Studio comps and international parks. Cahall thinks Q1 results put a lot of fears to bed, while most importantly showcasing the strong runway ahead for Disney+. He thinks a $155-plus trading range will quickly become the new norm as Disney+'s expansion continues to gain momentum. The analyst has an Overweight rating on the shares.
PIPER SEES DISNEY+ AS POSITIVE FOR AKAMAI, FASTLY, F5: Disney is going to be a large customer for the content delivery networks given the ramp of Disney+, ESPN+ and Hulu, Piper Sandler analyst James Fish tells investors in a research note. The analyst views the one hour of average Disney+ watching, the quick ramp of paid subs, exit subs across all three services, coming original content, less than 5% content delivery networks cost and future launches of the over-the-stop services into new countries as "strong positives" for content delivery networks. Fastly (FSLY) has the most relative exposure to over-the-top within its business, while Akamai (AKAM) will get the largest traffic share among the CDN vendors, according to Fish. Further, the analyst says he recently learned that F5 Networks' (FFIV) NGINX unit has a utility-based enterprise license agreement with Disney+ that should enable it to also benefit as the streaming service grows. In addition, coronavirus fears may also drive more content delivery network business as consumers stay at home more, argues Fish. He believes the early success of Disney+ is a "strong positive" for Akamai, Fastly and F5 and continues to recommend owning all three stocks.
