Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MOVING TO SIDELINES: Deutsche Bank analyst Sidney Ho downgraded Micron (MU) to Hold from Buy with a $48 price target, telling investors that his "extensive checks" with the supply chain following Western Digital's (WDC) recent "lackluster guidance" left him feeling more negative on the supply-demand balance for the memory sector in the next several quarters. Inventory build-up at cloud data center customers looks worse than he had anticipated, while demand from other end markets is weakening, said Ho. He also cut his Micron estimates due to lower pricing assumptions and said he expects consensus estimates to come down "sharply" from current levels.
PROFIT RECOVERY: Oppenheimer analyst Rupesh Parikh upgraded Estee Lauder (EL) to Outperform from Perform with a price target of $240, up from $160. Additionally, the analyst is again establishing the name as a top pick. Parikh told investors that he sees a more rapid profit recovery than previously envisioned driven by the Chinese consumer, a resilient skincare category, and accelerated online growth.
STOCK LIKELY RANGE-BOUND: Deutsche Bank analyst Paul Trussell downgraded BJ's Wholesale (BJ) to Hold from Buy with a price target of $39, down from $41. The analyst believes the stock is likely to be range-bound as investors focus on the pace of deceleration over the coming months following a strong first half, which he credits to strong execution throughout the pandemic. Noting that BJ's shares are up 83% year-to-date, Trussell argued that his channel checks have suggested a notable deceleration in trends in recent weeks.
VIRTUAL RESTAURANT STRATEGY: Gordon Haskett analyst Jeff Farmer upgraded Brinker (EAT) to Buy from Hold with a $44 price target. The company's newly formed virtual restaurant strategy with delivery partner DoorDash (DASH) can drive a highly incremental, high margin revenue stream, create a competitive advantage over the casual dining peer group and insulate sales Chili's against a potential second wave of state-mandated restaurant closures if the pandemic sees a resurgence, Farmer told investors. The analyst noted that in addition to the recently launched "It's Just Wings" virtual concept, Brinker potentially has a second concept in coming quarters with "It's Just Pasta."
BUY CAESARS: JPMorgan analyst Daniel Politzer resumed coverage of Caesars Entertainment (CZR) with an Overweight rating and December 2021 price target of $50 after removing a Not Rated designation from the stock following a period of restriction. Politzer views Caesars as "a high-risk, high-reward stock," stating that he believes the upside potential from a recovery of the U.S. regional gaming market and the growth potential of the U.S. sports betting/iGaming industry is worth the "well understood risks" the company and the casino industry faces.
