Check out today's top analyst calls from around Wall Street, compiled by The Fly.
ANALYSTS SPLIT ON PELOTON: Raymond James analyst Aaron Kessler downgraded Peloton (PTON) to Market Perform from Outperform without a price target following the company's Q2 results. Kessler believes risk/reward is less favorable at current levels and that while demand remains strong, thinks trends could soften somewhat in 2H21 with social distancing measures likely to ease given the vaccine rollout, the analyst tells investors in a research note. Kessler remains positive on fundamentals long-term.
Gordon Haskett analyst John Parke keeps his Buy rating and $190 price target on Peloton after its Q2 earnings beat, saying he believes that visibility on the stock is "only getting better" and he would buy the shares on after-hours weakness. The quarter saw a strong top-line and member growth, "healthy" engagement metrics, and a "noticeable" EBITDA beat, the analyst tells investors in a research note, adding that the company has seen no slowdown in its business despite favorable developments on the vaccine front. After Peloton reported "impressive" Q2 results and raised its FY21 revenue outlook to at least 123% growth, Stifel analyst Scott Devitt noted this was ahead of the Street's 115% estimate and said he sees Peloton being well positioned to deliver strong growth throughout this fiscal year given its path to normalized delivery and growing manufacturing capacity. Over the long-term, he sees a number of opportunities to support sustainable growth as the company expands its product offerings and enters into new geographies, added Devitt, who reiterates a Buy rating and $170 price target on Peloton shares.
'MANY UNKNOWNS': Oppenheimer analyst Ittai Kidron downgraded New Relic (NEWR) to Perform from Outperform without a price target following the company's fiscal Q3 results. The analyst remains positive on New Relic's business model transition and management's ability to execute, but sees "many unknowns that could take time to bring into focus." These include customer usage and commitment patterns, the impact of sales comp changes on productivity, changes in win rates, and ultimately the revenue recognition outcomes tied into these elements, Kidron tells investors in a research note. The analyst sees a "wide range of potential outcomes" near term and prefers to step to the sidelines until a "clearer picture emerges.
Additionally, UBS analyst Jennifer Swanson Lowe downgraded New Relic to Neutral from Buy with a price target of $76, down from $89, and said the company's revenue recovery remains 2-3 quarters away, and while its valuation is "undemanding", the pushout of a potential revenue growth inflection is likely to keep the stock trading in a sideways pattern over the next 6-9 months. Shares were also downgraded at Raymond James to Market Perform from Strong Buy.
ONLINE REAL ESTATE STOCK UPGRADES: Goldman Sachs analyst Heath Terry upgraded Zillow Group (ZG) to Buy from Neutral with a price target of $200, up from $119. The analyst upgraded the online real estate stocks, Zillow and Redfin (RDFN), citing the "ongoing growth acceleration" in the real estate macro environment, a "sustainable" shift in real estate activity online, and the longer term opportunity for these companies to capture share of industry economics. Housing activity and buyer demand should continue to accelerate with new listings growth and velocity offsetting challenges to supply, and lower mortgage rates should drive a more affordable buyer environment despite meaningful home price appreciation, Terry tells investors in a research note. He believes the risk/ reward in owning Zillow shares is positive and expects "meaningful" share gains in its premier agent business.
Terry also upgraded Redfin to Neutral from Sell with a price target of $78, up from $41. He says his Sell rating on Redfin was "clearly wrong." The company's transactions, revenue per transaction, and gross margin should continue to benefit from macro trends, says Terry.
SYNAPTICS: Craig-Hallum analyst Anthony Stoss upgraded Synaptics (SYNA) to Buy from Hold with a price target of $130, up from $78, saying reported results and guidance above estimates on PC/IoT strength. Synaptics is now largely de-risked from an Apple (AAPL) socket loss and is positioned for strong top and bottom line growth driven by their IoT/PC businesses, Stoss tells investors in a research note.
Also, Oppenheimer analyst Martin Yang upgraded Synaptics to Outperform from Perform with a $140 price target. Yang tells investors in a research note that execution has been remarkable given how fast the turnaround happened and how much management has over-delivered its targets. While the analyst has missed significant upside sitting on the sideline, he believes there is still substantial growth and profit ahead.
ACTIVISION OUTLOOK PROMPTS TARGET BOOSTS: Credit Suisse analyst Stephen Ju raised the firm's price target on Activision Blizzard (ATVI) to $120 from $106 and keeps an Outperform rating on the shares. Activision Blizzard's results once again exceeded expectations, driven by strong digital revenues from Call of Duty across Warzone, mobile, and premium, as well as sustained subscriber growth and sales from WoW Shadowlands, Ju tells investors in a research note. Management also provided a more explicit roadmap for ongoing step function increases in EPS growth in the coming years, as it begins to reap the rewards of investments to expand the audience of its franchises, the analyst adds. Morgan Stanley analyst Brian Nowak raised the firm's price target on Activision Blizzard to $115 from $108 and keeps an Overweight rating on the shares, telling investors that he thinks the company's "strong" Q4 results and guidance "speak to how" the company has structurally expanded the reach and monetization of the Call of Duty and World of Warcraft franchises to grow cash flow.
Raymond James analyst Andrew Marok raised the firm's price target on Activision Blizzard to $120 from $109 and keeps an Outperform rating on the shares. The analyst continues to think that Activision has plenty of runway to reach new players through mobile and free-to-play offerings and capitalize on strong demand for planned new titles in existing franchises. Barclays analyst Mario Lu raised the firm's price target on Activision Blizzard to $116 from $100 and keeps an Overweight rating on the shares after the company reported better than expected results and confirmed neither Overwatch 2 nor Diablo 4 titles are slated to release this year. There is "plenty of near term upside" in 2021 given the continued flywheel effect Warzone will have on both Cold War and the unannounced 2021 Call of Duty title, Lu tells investors in a research note.
