Check out today's top analyst calls from around Wall Street, compiled by The Fly.
BUY NVIDIA: BMO Capital analyst Ambrish Srivastava upgraded Nvidia (NVDA) to Outperform from Market Perform with a price target of $425, up from $285. While no one single event drives the change in thinking, the company's continued execution on the datacenter side, along with the latest product rollout, warrants a more positive stance on the shares, Srivastava contended. The analyst believes Nvidia is "uniquely positioned to continue to benefit from a massive shift in the compute landscape." Further, Srivastava sees no reason why the company cannot grow its datacenter business to at least a $20B annual run rate versus the $4.8B for this year. Consequently, the analyst sees long-term earnings per share of $20 for Nvidia.
STOCK 'MOVED TOO FAST': Bank of America analyst Jason Kupferberg downgraded Square (SQ) to Underperform from Buy with an unchanged price target of $84. While the consumer-facing Cash App business is "performing wonderfully," the Seller business still represents about 70% of the company and the pace of gross payment volume recovery is "highly uncertain," the analyst argued. While he remains bullish on Square's competitive positioning over the long-term, he feels "the stock has moved too far and too fast relative to its near-term fundamental prospects."
Meanwhile, Stephens analyst Brett Huff also downgraded Square to Equal Weight from Overweight with a price target of $75, up from $74. In addition to being concerned that near-term catalysts have played out, Huff highlighted the risk that fairly limited store closings to date will meaningfully accelerate, although he thinks the "worst-case-scenario" regarding small-to-mid-size bankruptcies won't happen. While concerned about valuation and store closings for its customers, Huff still thinks Square has a "better mousetrap" product and believes its post-recession market share and franchise value should be better than pre-recession, but on a smaller near-term total addressable market.
CHANGING CONSUMER TRENDS: Bank of America analyst Bryan Spillane upgraded Kraft Heinz (KHC) to Buy from Neutral with a price target of $38, up from $32. The analyst noted that the shares trade at a 40% discount to the packaged food group. However, actions on its brands and its supply chain position Kraft Heinz to take advantage of changing consumer trends in the wake of COVID-19, he contended.
SECULAR SIFT TO ONLINE ADVANCING: Wedbush analyst Seth Basham upgraded Williams-Sonoma (WSM) to Outperform from Neutral with a price target of $80, up from $46. The analyst noted that while growth rates for online retail generally and furnishings-oriented brands such as Wayfair (W) and Williams-Sonoma appear to be leveling out as consumers move beyond near-term immediate small kitchen and housewares purchases, online furniture sales volumes continued to accelerate May-to-date based on data from online furniture retailer platforms Blueport Commerce and ImagineRetailer, and premium mattress seller Purple (PRPL). With nearly 60% of sales online, a mid-high-end customer base and 40%-plus of sales in furniture, trends position Williams-Sonoma very well not just in the near-term, but also in the medium-term as the secular shift to online home goods shopping advances quickly, Basham contended.
HOUSE CLEANING SERVICES FALL: Dougherty analyst Charles Anderson upgraded iRobot (IRBT) to Buy from Neutral with an $80 price target. With tariff relief helping gross margin and improving demand indicators given the need to replace house cleaners, the analyst believes iRobot shares can again trade within the 1.5-2.0 times band it traded in for much of 2017-2019, which equates to $80-$102 per share. In the U.S., consumers are increasingly seeking out the Roomba during the lockdowns as interest in house cleaning services collapses, the analyst contended. Further, Anderson believes Howard Stern's "unsolicited praise" for Roomba in mid-April and Braava in late April is likely helping the pickup in Google search data.
