Check out today's top analyst calls from around Wall Street, compiled by The Fly.
APPLE UPGRADED TO OVERWEIGHT: Wells Fargo analyst Aaron Rakers upgraded Apple (AAPL) to Overweight from Equal Weight with an unchanged price target of $315. While it remains difficult to gauge the fundamental impact Apple may realize from the COVID-19 outbreak, the shares at current levels offer a "compelling risk/reward for long-term patient investors," Rakers tells investors in a research note partially titled "Stepping In Here." The analyst thinks Apple can drive earnings back to $15 per share and sustain $40B-plus per year in free cash flow. Fear over the fundamental impact from COVID-19 will eventually ease, and from a supply perspective, the indications from China are net-positive, contends Rakers.
CHEMICALS RATING SHAKE-UP AT BofA: BofA analyst Steve Byrne notes that recession and coronavirus risks have been magnified for some U.S. Chemicals names by the falling price of crude as lower crude translates to a flatter global cost curve and diminishing advantage of the low-cost U.S. position. Against this backdrop, he cut his estimates and price targets across the board in the sector and made three upgrades and three downgrades. As global consumers increasingly head toward social-isolation, Byrne sees consumer facing markets, such as coatings, being at risk, but he doesn't think this will translate in the same magnitude to the agriculture and industrial gas businesses. In that context, he has upgraded Corteva (CTVA) and FMC Corporation (FMC) to Buy from Neutral and double upgraded Linde (LIN) to Buy from Underperform. Given that Sherwin-Williams' (SHW) valuation has a strong correlation to same-store sales growth, which he sees decelerating after Q1, Byrne double downgraded Sherwin-Williams to Underperform from Buy. He also downgraded Mosaic (MOS) to Neutral from Buy, as he sees risks to potash markets and challenged cash flow. Additionally, Byrne double downgraded Venator Materials (VNTR) to Underperform from Buy, telling investors he views Venator as among the most exposed to the ongoing outbreak of the coronavirus given his estimate that 80% of the company's production footprint is within Europe.
WELLS DOWNGRADES DRILLERS: Wells Fargo analyst Christopher Voie downgraded several stocks in the drilling space, citing the recent sell off in commodity prices and degradation in his outlook for OFS. The analyst downgraded Transocean (RIG) and Tetra Technologies (TTI) to Equal Weight from Overweight and Diamond Offshore (DO), Noble Corp (NE), Valaris (VAL), Nine Energy Service (NINE) NCS Multistage (NCSM) to Underweight from Equal Weight.
Additionally, the firm lowered its price targets for Apergy (APY) to $32 from $16, for Baker Hughes (BKR) to $25 from $33, for FTS International (FTSI) to 50c from $1.75, for Helmerich & Payne (HP) to $20 from $34, for HollyFrontier (HFC) to $26 from $50, for Liberty Oilfield Services (LBRT) to $7 from $14, for National Oilwell (NOV) to $13 from $26, for Oceaneering (OII) to $5 from $14, for Oil States (OIS) to $3.50 from $11, for Patterson-UTI (PTEN) to $1.75 from $7, for ProPetro (PUMP) to $10 from $14, for Ranger Energy (RNGR) to $6 from $9, for Schlumberger (SLB) to $25 from $44 and for Transocean (RIG) to $2 from $8.
CRUISE LINE PRICE TARGETS SLASHED AT WEDBUSH: Wedbush analyst James Hardiman lowered his price targets for cruise line operators, reducing his price target for Carnival (CCL) to $29 from $50, Royal Caribbean (RCL) to $63 from $140 and Norwegian Cruise Line (NCLH) to $26 from $60. Hardiman tells investors in a research note that cruise industry investors and potential investors alike "need to come to grips" with some exceedingly hard realities, and those that are unwilling to think through the true risk/reward spectrum should probably look elsewhere, as he thinks conditions on the ground and in the water are likely to get significantly worse before they get better. Hardiman says he believes that cruise cancellations have and will continue to skyrocket and that occupancy levels will be exceedingly low until a vaccine is made available to the public, which is not expected to happen for at least a year.
