Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MENU PRICE HIKES: Raymond James analyst Brian Vaccaro upgraded Chipotle (CMG) to Strong Buy from Outperform with an unchanged price target of $1,800. The recently announced menu price increases of 4% in recent weeks with more coming in the fall create "significant upside" to second half of 2021 consensus comp expectations, Vaccaro told investors in a research note. The analyst now has increased confidence in his 2022 earnings per share estimate of $35.47, which is above the consensus estimate of $32.50. Chipotle still has a has a "very strong value proposition" with its chicken burrito remaining below $8 in many markets, said Vaccaro, who argues the price increases to cover higher wages will result in limited customer resistance.
BUY WENDY'S: Northcoast analyst Jim Sanderson upgraded Wendy's (WEN) to Buy from Neutral with a $30 price target, reversing the analyst's downgrade to Hold on June 9. The analyst pointed out that stock declined last week despite no change to the company's fundamentals. Channel checks are "just as compelling as ever" and indicate that Wendy's current performance is exceeding expectations, he contended. Sanderson believes that even as Wendy's laps the most volatile same-store sales quarter from last year's shut-down, its average weekly sales are "as high as ever."
SELL LORDSTOWN: R.F. Lafferty analyst Jaime Perez downgraded Lordstown Motors (RIDE) to Sell from Hold with a price target of $3, down from $9, after the company announced that CEO Steve Burns and CFO Julio Rodriguez resigned their positions, effective immediately. Last week, Lordstown warned of a going concern risk and during its first quarter earnings call, management warned that it might need to raise additional capital to meet its production forecast, Perez noted. "With the level of uncertainty increasing in the future" of the company, the analyst believes a downgrade to Sell is prudent.
DOUBLE DOWNGRADE: Goldman Sachs analyst George Galliers downgraded Ferrari (RACE) to Sell from Buy with a $207 price target. The analyst expects the broader auto industry to benefit over the next 12-18 months from a sequential improvement in global production, as a result of easing of semi-conductor shortages, improving end markets and the need to re-stock. However, he does not expect Ferrari to be a notable beneficiary of this development. Further, following the announcement of a BEV by 2025, and the appointment of a new CEO with a tech background, Galliers expects Ferrari to accelerate its transition to technologies of the future. While he would view this development as a positive for Ferrari's long-term future, the analyst believes it may drive the need for incremental capex.
BEST IDEAS LIST: Wedbush analyst Nick Setyan added Cheesecake Factory (CAKE) to his firm's Best Ideas List, while keeping an Outperform rating on the shares with a $70 price target. The recent selloff provides an "attractive buying opportunity," Setyan told investors in a research note. The analyst expects post-COVID market share opportunities to result in higher growth versus pre-COVID growth rates, resulting in an "increasing premium" relative to Cheesecake's pre-COVID valuations. Further, the company's elimination of convertible preferred stock is "very accretive," the analyst added.
