Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'EXTRAORDINARY' INSTALLED BASE GROWTH: Argus analyst Joseph Bonner upgraded Zoom Video (ZM) to Buy from Hold with a $440 price target. The analyst noted that the company continues to benefit from the "extraordinary growth in its installed base" that came with last year's pandemic lockdowns, though he questions whether the pandemic has created a "secular change" in remote work leading to a "hybrid" home-office model. While Zoom faces competition from several large incumbents, he is also raising his full year 2022 earnings per share view to $4.62 from $3.81 and full year 2023 to $4.97 from $4.36.
INCREMENTAL POSITIVES: JPMorgan analyst Brian Ossenbeck upgraded UPS (UPS) to Overweight from Neutral with a price target of $243, up from $224. The company's investor day provided "incremental positives" around pricing power, capacity discipline and the dividend yield, Ossenbeck told investors in a research note. The analyst sees an attractive entry point following the stock's underperformance. The majority of investors were confused and frustrated by messaging at the event, which likely lingers for some time, but UPS "left multiple areas of potential upside" versus the 2023 guidance if execution continues improving and industry fundamentals remain supportive, the analyst contended.
BUY DELTA, AMERICAN: MKM Partners analyst Conor Cunningham initiated coverage of Delta Air Lines (DAL) with a Buy rating and $59 price target. The airline is his Top Pick in the group given its potential from a quicker corporate recovery, its premium-focused product driving a revenue premium, and the fact that shares lagged the group during the recovery. Leisure demand is supportive of Delta's current valuations, with further upside coming when corporate travel becomes a bigger contributor to revenue, Cunningham added.
He also started coverage of American Airlines (AAL) with a Buy rating and $29 price target. The analyst argued that with bookings in the domestic leisure market having improved and given the "encouraging" trends in corporate demand recovery, the story at American will be one of "massive deleveraging." Cunningham added that he expects American Airlines to repay $8B-$10B out of the $15B in debt accrued during the pandemic.
Additionally, the analyst initiated coverage of
- Hawaiian Holdings (HA) with a Neutral rating and $27 price target;
- Alaska Air (ALK) with a Buy rating and $81 price target;
- Spirit Airlines (SAVE) with a Buy rating and $44 price target;
- JetBlue (JBLUE) with a Neutral rating and $21 price target;
- Allegiant Travel (ALGT) with a Neutral rating and $230 price target;
- Southwest (LUV) with a Buy rating and $74 price target.
ACCELERATING DOMESTIC DEVELOPMENT: BTIG analyst Peter Saleh upgraded Wingstop (WING) to Buy from Neutral with a $175 price target. The analyst cited a series of calls with franchisees that give him confidence that the company's domestic development is accelerating in spite of the record-high wing prices and labor shortages. Wingstop's same-store sales will moderate over the coming quarters, but the brand is retaining much of the average weekly sales gains achieved during the pandemic, Saleh contended.
IMPROVING NEAR-TERM FUNDAMENTALS: Goldman Sachs analyst Kash Rangan added ServiceNow (NOW) to his firm's Conviction List and reiterated a Buy rating on the shares with a $695 price target. The analyst came away from a meeting with management "incrementally positive" on ServiceNow's improving near-term fundamentals with potential to accelerate subscription revenue in 2022. The stock is trading below its pre-pandemic multiple, representing a "compelling entry point," Rangan argued.
