Check out today's top analyst calls from around Wall Street, compiled by The Fly.
ON THE SIDELINES DESPITE 'COMPELLING' STORY: Deutsche Bank analyst Brian Mullan initiated coverage of Chipotle Mexican Grill (CMG) with a Hold rating and $1,132 price target. The analyst acknowledged that the company's multi-year story is "compelling, with very little to pick at." However, with the stock is up 34% since reporting earnings just five weeks ago and currently sitting at all-time highs, the risk/reward has "changed by nature of the recent rally," the analyst contended. As such, Mullan would look to get more positive on any pullbacks. Looking at conventional current year and forward year valuation metrics, Chipotle screens expensive, the analyst added.
SLOWER USER GROWTH: Argus analyst Jim Kelleher downgraded Pinterest (PINS) to Hold from Buy. The analyst noted that the company reported slower U.S. user growth of 6% in the first quarter, while investors anticipated Pinterest to grow its user base more rapidly due to COVID-19's shelter in place. Kelleher believes Pinterest remains a "solid" long-term story, but sees the company at risk of lagging its peers in the intermediate term because of reduced monetization of its U.S. users and slowing U.S. revenue growth.
NEAR-TERM BANKRUPTCY RISK SUBSIDED: MKM Partners analyst Eric Handler upgraded AMC Entertainment (AMC) to Neutral from Sell with a price target of $5, up from $1. The near-term bankruptcy risk has subsided with an increasing likelihood that movie theaters in the U.S. and Europe will be able to re-open with new content in the July-August time frame, the analyst contended, adding that the company's liquidity position also appears to be improved. Further, Handler pointed out that the expected re-opening of the company's circuit in the next two months and its cash on hand should allow the company to get through the end of the year.
'POOR' RESULTS, RESTRUCTURING PROGRAM: Argus analyst Jim Kelleher downgraded HP Enterprise (HPE) to Hold from Buy after the company reported "poor" second quarter results and announced a "significant" restructuring program. As the company aims to address new and existing competitive threats, the aggressive cost-cutting measures risk "cutting into muscle," the analyst told investors in a research note. Kelleher also pointed out that HP Enterprise has lagged the market during 2020, and continues to face uncertain demand prospects and ongoing profit pressures amid the pandemic and in its aftermath.
UNIT GROWTH RE-ACCELERATION: Goldman Sachs analyst Katherine Fogertey upgraded Jack in the Box (JACK) to Neutral from Sell with a price target of $66, up from $42. The analyst cited evidence of the company's same-store-sales momentum and improving franchise economics, which she believes can re-accelerate its unit growth beyond flat currently expected in 2020. With shares trading above $65, Fogertey added that further upside for Jack in the Box relative to her new price target is limited.
