Check out today's top analyst calls from around Wall Street, compiled by The Fly.
STILL UPSIDE AHEAD: Oppenheimer analyst Koji Ikeda upgraded Shopify (SHOP) to Outperform from Perform with a $1,300 price target, implying 10% upside from the current price. While the stock has been a big winner since its initial public offering in 2015, there is still upside from here as the shift to digital commerce is accelerating and has been catalyzed by the COVID-19 pandemic, Ikeda told investors in a research note. The analyst sees Shopify as a digital commerce category "leader, disruptor, and share gainer for the long-term." Further, Ikeda's research suggests that the global commerce total addressable market will reach $255B by 2025, expanding 330% from the 2020 estimate of $59B.
The analyst also upgraded ServiceNow (NOW) to Outperform from Perform with a $600 price target, and downgraded eGain (EGAN) to Perform from Outperform.
BUY INTEL: Atlantic Equities analyst Ianjit Bhatti upgraded Intel (INTC) to Neutral from Underweight with a price target of $55, up from $36, after the company announced that Patrick Gelsinger has been appointed as CEO. While the analyst expects continued CPU market share losses to AMD (AMD), Bhatti is positive on the CEO announcement and believes Gelsinger has an opportunity to make the strategic decisions required to limit more extreme market share erosion. Bhatti anticipates that the market will give the incoming CEO the benefit of the doubt while a new strategic plan is formulated and implemented, limiting downside risk to the stock over the next 12 months.
Cowen analyst Matthew Ramsay also upgraded Intel to Outperform from Market Perform with a price target of $75, up from $50. Ramsay contended that bringing former CTO Pat Gelsinger back from VMWare (VMW) as CEO has the potential to spur Intel behind a more credible forward strategy and roadmap.
Also more bullish on the name, Morgan Stanley analyst Joseph Moore upgraded Intel to Overweight from Equal Weight with a price target of $70, up from $60, stating that Pat Gelsinger is "likely the best case as CEO" as he brings "more relevant experience to the unique requirements of the Intel job than any other candidate." As an Intel veteran, Gelsinger should have the connections to potentially rebuild the company's process expertise, said Moore, who admits that the transition might be negative for 2021 earnings as the company pulls back from the focus on shorter term earnings. However, the longer-term opportunity looks clear following the CEO change, "particularly given the premium valuation put on strong cloud franchises," he added.
Voicing a similar opinion, Needham analyst N. Quinn Bolton also upgraded Intel to Buy from Hold with a $70 price target. Bolton added that TSMC's (TSM) capital expenditure budget of $25B-$28B announced on Thursday should be "a strong signal that Intel will announce a meaningful program to outsource some advanced manufacturing to TSMC."
Meanwhile, BMO Capital analyst Ambrish Srivastava upgraded Intel to Outperform from Market Perform with a price target of $70, up from $50. The "richness of experience" that Pat Gelsinger brings from his prior tenure at Intel as well as his experience running VMware makes him the right person who can address the "daunting, but not insurmountable challenges" that Intel faces, Srivastava told investors in a research note. Given the "series of disappointments" from Intel, even a "few incremental right steps ought to serve as a catalyst for shares," the analyst contended. Srivastava now assumes that Intel shares "start to shake off the big discount" to the S&P 500.
SELL AMD: BMO Capital analyst Ambrish Srivastava downgraded AMD to Underperform from Market Perform with a price target of $75, down from $80. The analyst acknowledged that AMD has done a "tremendous job" under its CEO, and the stock's valuation reflects the "near flawless execution under her watch." However, Srivastava thinks a large part of AMD's "rich valuation is also attributable to how poorly Intel has executed." The analyst's scenario analysis suggests that AMD's share gains in servers should moderate out in 2022. Thus, consensus estimates will prove to be optimistic, he added.
IMPROVING NEW RESTAURANT MARGINS: RBC Capital analyst Christopher Carill upgraded Chipotle (CMG) to Outperform from Sector Perform with a price target of $1,650, up from $1,320. The stock has appreciated "significantly" in 2020, but there is further upside to be derived from improving new restaurant margins, which should support the accelerating unit development in an environment of a broader restaurant industry supply contraction in 2021, the analyst told investors in a research note.
BUSINESS EXPANSION, HIGHER MARGINS: Argus analyst Bill Selesky upgraded General Motors (GM) to Buy from Hold with a $56 price target. The company is diversifying its business into electric and autonomous vehicles while also benefiting from higher margins in North America, "solid" cash flows, and a "strong" balance sheet, the analyst told investors in a research note. Selesky also believes that investors are undervaluing GM's Chinese JV, Ultium battery, and financial services businesses, boosting his fiscal year 2020 earnings per share view by 50c to $4.70 and fiscal year 2021 view by 56c to $5.89.
