Check out today's top analyst calls from around Wall Street, compiled by The Fly.
ACCELERATING MARKET OPPORTUNITY: Raymond James analyst Aaron Kessler resumed coverage of Peloton (PTON) with an Outperform rating and $65 price target. Kessler cited a large market opportunity that is accelerating due to COVID-19 as well as attractive unit economics, including falling customer acquisition costs and low churn. The analyst expects continued revenue momentum with 55% CY19-21 CAGR and 20% plus long-term EBITDA margins through increasing scale and operating efficiencies.
'LONG-TAIL OPPORTUNITY': Oppenheimer analyst Koji Ikeda initiated coverage of DocuSign (DOCU) with an Outperform rating and $200 price target. The analyst believes the company is a "proven success story" with a "visionary" management, taking market share in an "underpenetrated" $50B digital agreement management opportunity. Furthermore, Ikeda contends that organizations that adopt DocuSign will "never revert to old workflows," setting up a "long-tail" opportunity for installed-base monetization through expansion and up-sells.
LIMITED UPSIDE: Goldman Sachs analyst Brian Lee downgraded SolarEdge (SEDG) to Sell from Neutral with a higher price target of $126, up from $120, and cut Vivint Solar’s (VSLR) to Neutral from Buy with a price target of $10, up from $9. While the analyst remains constructive on the broader outlook for U.S. residential solar in the long term, after a 42% rally in the solar stocks over the past three months, he now sees limited upside.
Lee further stated that U.S. residential market share of SolarEdge has peaked and is now on the decline, while its gross margin execution is expected to remain challenged due to segment and geographical mix shift. With the stock trading near all-time highs, Lee believes that SolarEdge shares' risk-reward skews negatively at current levels. Regarding Vivint, and given a lack of catalysts, Lee warns that it may see a less meaningful inflection in growth due to a high reliance historically on door-to-door sales, while its key operating metrics around cost reduction and battery storage attach rates also lag its peers.
EXECUTION RISK MORE MANAGEABLE: Credit Suisse analyst Michael Zaremski upgraded Allstate (ALL) to Neutral from Underperform with a price target of $101, up from $94. The analyst believes execution risk related to the company's transformation initiatives is more manageable during the current pandemic. Allstate's expense initiatives will help offset core loss ratio pressure as auto and home insurance pricing should hover below the inflation rate the company must pay in order to settle auto accident claims, Zaremski contended.
HEMOPHILIA B GENE THERAPY DEAL: Wells Fargo analyst Jim Birchenough downgraded uniQure (QURE) to Equal Weight from Overweight with a price target of $56, down from $90, following the global licensing deal with CSL Behring for hemophilia B gene therapy etranacogene dezaparvovec. While the deal provides significant commercial expertise and global reach in the hemophilia category, the analyst believes it also highlights the heavy lifting required for gene therapy success in a category described as having low unmet need and that is well served and could suggest slower uptake than previously assumed.
Mizuho analyst Difei Yang also downgraded uniQure to Neutral from Buy with a price target of $61, down from $90, after the company announced a $2B licensing agreement with CSL Behring for commercialization rights to AMT-061 for hemophilia B. The deal fairly values AMT-061, said Yang, who also likes the deal from a strategic standpoint. The analyst believes the Huntington's program now becomes the key value driver for uniQure.
