Check out today's top analyst calls from around Wall Street, compiled by The Fly.
PRESSURE AHEAD: Argus analyst David Toung downgraded UnitedHealth (UNH) to Hold from Buy. The company is set to face pressure from the rising medical utilization and higher costs for COVID-19 treatments, vaccines and testing, the analyst told investors in a research note. Toung added that he is concerned with the declining enrollment in UnitedHealthcare commercial plans due to private-sector job losses and warns that the rise in utilization and lower enrollment could weigh on UnitedHealth margins in the coming quarters.
STRONG BOTTOM-LINE PERFORMANCE: Wedbush analyst Daniel Ives raised the firm's price target on Tesla (TSLA) to $500 from $475, while keeping a Neutral rating on the shares ahead of quarterly results. The analyst believes Tesla's improved manufacturing efficiency and shining Giga 3 success in China will be on full display later this week and lead to another strong bottom-line performance, which should beat the Street.
In terms of overall unit demand heading into year-end, Ives believes Tesla is on pace to "impressively" achieve in the area code of 500k units for the year, "a line in the sand that was a pipe dream six months ago as Tesla have navigated this unprecedented COVID backdrop." Further, he thinks that with margins incrementally higher on a Model 3 sold in China versus the U.S./Europe this could markedly increase the profitability profile for Tesla over the next few years as ultimately the analyst sees China representing 40%-plus of global sales for the company potentially by early 2022.
VANS SALES SLOWDOWN: Bank of America analyst Robert Ohmes downgraded VF Corp. (VFC) to Underperform from Neutral with a price target of $65. The analyst contended that the slowdown in Vans sales in the U.S. is likely to "restrain" the stock's valuation. Ohmes added that Vans is losing market share to Nike (NKE) with the latter's "re-emergence" as the dominant brand in casual lifestyle thanks to the "strong momentum" in Air Force 1, Nike Blazer, and Converse.
'CLASSIC VALUE TRAP': Baird analyst Matthew Gillmor downgraded Allscripts (MDRX) to Neutral from Outperform with a $13 price target. The analyst argued that the stock has been a "classic value trap" over the past several years as growth rates have slowed and valuation multiples compressed more than expected. He believes management is correct in trying to monetize better businesses at attractive multiples but thinks it is a good time to step aside.
SELL RH: Jefferies analyst Jonathan Matuszewski initiated coverage of RH (RH) with an Underperform rating and $320 price target. While the analyst acknowledged that RH has opened 24 "architecturally inspiring locations" with impressive lifts to physical and digital sales over the last decade, he has trouble believing the next two dozen galleries will see returns consistent with those "initial, cherry-picked projects." The retailer is almost entirely domestic and while he doesn't doubt there is potential abroad, Matuszewski believes Street estimates may not be focusing on potential deleverage from investments and ad spending for brand awareness that "could mount quickly."
