Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'HUGE UPSIDE' SURPRISE: Pivotal Research analyst Michael Levine upgraded Facebook (FB) to Hold from Sell with a price target of $225, up from $167. The analyst noted that the company reported first quarter results on Wednesday after market close that were far better than anybody anticipated. The "huge upside" surprise was trending through April at flat year-over-year relative to expectations that had likely risen to down 5%-10%, the analyst added. Levine now sees a more balanced risk/reward on Facebook shares.
'EXTREME' VALUATION: Canaccord Genuity analyst David Hynes downgraded Shopify (SHOP) to Hold from Buy with a $600 price target. The analyst cited valuation for the downgrade with the shares up more than 80% from this month's lows. Following the rally, Shopify's valuation "is now at an extreme, which means it matters," Hynes told investors in a research note. The analyst added that while higher demand for e-commerce is likely in the current environment, he is not convinced that Shopify' gross merchandise volume are "as bulletproof as perceived as discretionary spend retreats." If the economy sharply contracts due to the pandemic, demand for the "nice-to-haves," which are a large part of the inventory of Shopify merchants, "is almost surely to fall," Hynes predicts.
SELL STMICROELECTRONICS: Goldman Sachs analyst Alexander Duval downgraded STMicroelectronics (STM) to Sell from Neutral with a price target of $19.80, up from $19.40. Roughly two-thirds of the company's revenues relate either to the auto or smartphone end markets, areas with potential downside risks given the current macroeconomic environment and weak end market data points, Duval contended. The analyst's new 2020 EBIT estimate is 15% below the midpoint of STMicroelectronics's guidance, and he believes the company's structural improvement is more than priced into the shares.
BUY SOUTHWEST: Stifel analyst Joseph DeNardi upgraded Southwest Airlines (LUV) to Buy from Hold with a price target of $50, up from $40. The analyst believes the stock's relative underperformance compared to its "strong-balance sheet brethren" presents an attractive entry point as Southwest will emerge from the COVID-19 crisis in a stronger position than it entered. Southwest is building a "liquidity war chest to play offense, at some point, when certain of its peers will be unable to do so," the analyst added. DeNardi believes the market is underappreciating the returns Southwest can generate from its capital.
MOVING TO THE SIDELINES: Piper Sandler analyst Rob Owens downgraded ServiceNow (NOW) to Neutral from Overweight with a price target of $360, up from $310. The company reported "very strong" first quarter results above recently lowered expectations, beating the initial range for subscription revenue guidance, Owens noted. However, with the shares around $345 post earnings, the analyst feels "upside is limited" and believes investors "should be prudent given the current pandemic."
