Check out today's top analyst calls from around Wall Street, compiled by The Fly.
ZOOM DOWNGRADED AT CREDIT SUISSE: Credit Suisse analyst Brad Zelnick downgraded Zoom Video Communications (ZM) to Underperform from Neutral with a price target of $105, up from $95. The stock closed Friday up $6.27 to $128.20. Trading at 40 times 2020 consensus revenue expectations, the current share price embeds significantly greater conversion of free users than an upside model scenario suggests, Zelnick tells investors in a research note. While Zoom is benefiting from having the "best product at the right time," the overall category remains competitive and every unified communication as a service vendor will eventually offer its own video solution, contends the analyst. Zelnick highlight RingCentral's (RNG) recent announcement to migrate away from white labeling Zoom as an example. Further, Zoom's exponential growth in usage has resulted in additional scrutiny of its technology, leading to a recent spike in security concerns, adds the analyst.
SPOTIFY DOUBLE DOWNGRADED AT RAYMOND JAMES: Raymond James analyst Justin Patterson double downgraded Spotify (SPOT) to Market Perform from Strong Buy. Patterson tells investors in a research note that more time indoors amid the ongoing coronavirus pandemic is driving less engagement and fewer downloads, and is creating potential U.S. share shift to Amazon Music (AMZN) given increased smart speaker listening. The analyst sees limited near-term benefit to Spotify from focus on artist tools given concert and album delays create less need to market and says competitors are driving the lead in social marketing and livestreaming on Twitch and Instagram.
INTEL 'IN RIGHT PLACE AT RIGHT TIME' DURING PANDEMIC: Raymond James analyst Christopher Caso upgraded Intel (INTC) to Market Perform from Underperform. In a research note to investors, Caso says Intel is in the right place at the right time during the pandemic, as he believes the cloud datacenter and service provider segments are likely to remain strong despite the global economic issues. Caso says it is also clear that commercial notebook demand is very strong now resulting from employees needing to work from home, which will benefit 1H revenue, though he expects this trend to be temporary. However, the analyst says Intel's longer-term structural issues, primarily its process disadvantage, which he expects to persist at least well into 2022, still gives him pause.
TESLA UPGRADED TO BUY AT JEFFERIES: Jefferies analyst Philippe Houchois upgraded Tesla (TSLA) to Buy from Hold with a price target of $650, down from $800. Despite reducing Tesla's estimates, the analyst still sees 2020 revenue growth of 27%. The company's earnings and free cash flow will be supported by better productivity, stable average selling prices and income from zero-emission vehicle credits, Houchois tells inevstors in a research note. Tesla is the only "legacy-free" carmaker and is participating in "a positive EV sum-game," contends the analyst. Further, post COVID-19 crises, Houchois expects higher consumer support for energy efficient transport.
WALGREENS BOOTS ALLIANCE BOOSTED TO NEUTRAL AT UBS: UBS analyst Kevin Caliendo upgraded Walgreens Boots Alliance (WBA) to Neutral from Sell with a price target of $44, down from $49. The current "trough" valuation is reflective of the company's near-term risks, Caliendo tells investors in a research note. Greater near-term risks have been introduced to the Walgreens story from the COVID-19 outbreak, but drug retail same-store-sales should be "fairly resilient" once activity levels normalize, adds the analyst. Further, the company's liquidity position is solid and its capital allocation priorities remain intact, contends Caliendo.
