Check out today's top analyst calls from around Wall Street, compiled by The Fly.
STRONG SUBSCRIBER GROWTH: UBS analyst Eric Sheridan upgraded Netflix (NFLX) to Buy from Neutral with a price target of $650, up from $540. The analyst said the key takeaways from the company's fourth quarter results included the continued strong global subscriber growth, continued levels of content investment, and a "multi-year" narrative for margin expansion and free cash flow growth made more "explicit" by the management comments. Sheridan believes more investors will be ready to "marry growth and valuation multiple" for Netflix after this quarter.
Wells Fargo analyst Steven Cahall also upgraded Netflix to Overweight from Equal Weight with a price target of $700, up from $510, following fourth quarter results. While fourth quarter net additions of 8.5M beat expectations, the company's operating leverage "really impressed," Cahall told investors in a research note, adding that Netflix is now "effectively cash sustaining." The analyst believes that with "little to hinder pricing growth," and the subscriber base still expanding, Netflix can afford to "grow cash content spend AND deliver strong operating leverage." He sees the long-term economics "providing a catalyst runway" for Netflix shares.
'YEARS FASTER THAN COMPETITORS': Oppenheimer analyst Colin Rusch raised the firm's price target on Tesla (TSLA) to $1,036 from $486 to reflect the assumption that the company's autonomous vehicle commercialization can come "years faster than competitors," plus equity market multiple appreciation. While he has "misgivings" about Tesla not incorporating LiDAR into its vehicles yet, Rusch believes the learning cycles enabled by having over 1M vehicles on the road is "an extraordinary advantage" that can help Tesla's shadow mode data collection to reach the threshold of 6B test miles being driven that should validate L4+L5 ADAS. He keeps an Outperform rating on the shares.
Deutsche Bank analyst Emmanuel Rosner also raised his price target on Tesla to $890 from $705, while keeping a Buy rating on the shares. The analyst sees "strong" volume growth in 2021 for U.S. autos and an ongoing "solid" mix and pricing helped by easy compares, low inventories, and COVID-19-induced demand for comfort, privacy and protection. The Democrat victory in U.S. Congress could also result in demand upside from large federal spending on infrastructure and toward vehicle electrification, Rosner told investors in a research note. He believes there is room for upside 2021 guidance surprises.
MOVING TO THE SIDELINES: BTIG analyst Peter Saleh downgraded Beyond Meat (BYND) to Neutral from Buy as he thinks growth through the retail channel will not be enough to sustain the company's growth rate and "hefty trading multiple" in 2021. While Saleh continues to believe in the long-term trend toward plant-based meats in the grocery and foodservice channels, he expects restaurant operators will remain focused on throughput over menu innovation, limiting adoption and sales growth through the foodservice channel this year. Further, recent international lockdowns, primarily across Europe, will continue to weigh on new partnerships and sales growth for Beyond Meat until a vaccine is widely available and dining rooms reopen, the analyst contended. Shah cited a weaker sales growth outlook, heightened price competition and "elevated valuation" for the downgrade of the shares.
TURNING POINT TOWARD FINANCIAL RECOVERY: Berenberg analyst Andrew Gollan upgraded Boeing (BA) to Hold from Sell with a price target of $215, up from $150. Boeing is a "deeply wounded organization," but the restart of 737 Max deliveries in December marked a turning point toward a financial recovery, Gollan told investors in a research note. The analyst finds the shares fairly valued as investors weigh near-term headwinds against the recovery potential.
BUY DELTA: Argus analyst John Staszak upgraded Delta Air Lines (DAL) to Buy from Hold with a $48 price target. The analyst believes the company will face a difficult first half of fiscal year 2021 but will likely return to profitability in the second half and into fiscal year 2022. Staszak added that he sees Delta lowering its operating costs by 35%-40% in the first quarter despite the recent increase in fuel costs, though he is also cutting his 2021 earnings per share view to ($2.00) from 70c on expectations for continued weak flight demand in the near term. At 9.4-times his expected fiscal year 2022 earnings of $4.30, Delta shares are "undervalued," he contended.
