Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MOVING TO SIDELINES ON FACEBOOK, ALPHABET: Citi analyst Jason Bazinet downgraded both Alphabet (GOOGL) and Facebook (FB) to Neutral from Buy with unchanged price targets of $2,415 and $320, respectively. During the last two quarters, internet advertising growth has been "quite robust" due to a better macro environment, robust e-commerce and higher retailer web traffic, Bazinet told investors in a research note. However, three things make him "nervous." First, among the top 10 Internet ad firms, in absolute dollar terms, sell-side analysts expect two-times the annual growth from 2021 to 2025 versus 2018 to 2020. Second, many investors believe ad intensity per dollar of economic activity is rising, while Bazinet sees "little evidence of this." Third, even if the sell-side estimates are right, growth will likely decelerate after the second quarter of 2021 due to tougher comps, he added. "Historically, that usually isn't bullish for multiples," Bazinet concluded. He's now not recommending any large cap ad centric internet stocks except Roku (ROKU).
SELL INTEL: Atlantic Equities analyst Ianjit Bhatti downgraded Intel (INTC) to Underweight from Neutral with a price target of $45, down from $63. While the analyst previously saw the opportunity for a strategic change under new CEO Patrick Gelsinger, Bhatti does not believe IDM 2.0 provides an answer to market share losses to AMD (AMD). Additionally, the analyst noted that first quarter results reflected accelerating CPU market share declines, with cost competition from Intel not having been effective to date and its customer relationships no longer a barrier to adoption.
ATTRACTIVE ENTRY POINT: Daiwa analyst Jairam Nathan upgraded Lyft (LYFT) to Outperform from Neutral with a price target of $56, down from $59. Nathan believes the 20% decline of Lyft's stock since April 28 offers an attractive entry point, even with risks from labor regulations and driver availability in earnings for 2021 and beyond. Nathan also thinks it is likely that the industry and labor regulators come to some kind of intermediate solution on drivers given them benefits such as minimum wage and healthcare.
BUY VIACOMCBS: Barrington analyst James Goss upgraded ViacomCBS (VIAC) to Outperform from Market Perform with a $50 price target. The company's streaming efforts create a "compelling collection of products to navigate the shifting media consumption landscape," Goss told investors in a research note. Further, the recent capital raise and other balance sheet efforts provide ViacomCBS increased flexibility to accelerate its push into streaming offerings, the analyst added. He believes the "excesses" in the stock's valuation have been eliminated, warranting an upgrade.
LESS UPSIDE GOING FORWARD: Barclays analyst Raimo Lenschow downgraded Oracle (ORCL) to Equal Weight from Overweight with an unchanged price target of $80. The recent strong performance of the shares means less upside going forward, Lenschow told investors in a research note. The analyst believes a growth acceleration at Oracle is needed for further relative outperformance, and he does not have "enough tangible data points for this yet."
