Check out today's top analyst calls from around Wall Street, compiled by The Fly.
SELL TESLA, BUY FISKER: Tudor Pickering analyst Matt Portillo initiated coverage of Tesla (TSLA) with a Sell rating and $537 price target. The analyst projects vehicle sales increasing from about 863,000 units in 2021 to 5.1M units by 2030 and gives the company credit for full self-driving, batteries, and robotaxis as well as significant expansionary growth in the Supercharger and Energy Generation and Storage business segments. However, even with all of that, the stock "still looks fundamentally overvalued" given that he would need to expect 8M automotive units delivered in 2030 with high adoptions rates of a level 4+ FSD system to justify the current share price, which he calls "a tough ask even with significant expansion in new vehicle lines."
Meanwhile, Tudor Pickering analysts Jeoffrey Lambujon and Jake Roberts initiated coverage of Fisker (FSR) with a Buy rating and $19 price target. While current equity value at least partially reflects a market awaiting additional execution over the next roughly 15 months until Ocean deliveries begin, Lambujon and Roberts believe the share price presents an interesting risk-reward. Industry comps for the Fisker Ocean SUV suggest that the anticipated run-rate of more than 60,000 unit sales per year is achievable, supported by Fisker's strategic cooperative with Magna (MGA) that will utilize existing architecture and infrastructure, the analysts added.
'ROBUST' CONNECTED TV GROWTH: Guggenheim analyst Michael Morris upgraded Roku (ROKU) to Buy from Neutral with a $395 price target, implying a 22% one-year return. The analyst expects the connected television advertising marketplace will continue to grow at a "rapid pace" and that Roku will be a primary beneficiary. Morris also sees value in the company's international expansion and potential for additional targeted marketing partnerships. Roku's expanded advertising tools are underappreciated, the analyst told investors in a research note. He sees an attractive entry point at current share levels.
MOVING TO THE SIDELINES: Argus analyst John Staszak downgraded Delta Air Lines (DAL) to Hold from Buy. While the company did not disclose the potential impact of the COVID Delta variant on flight demand when it last reported results, demand appears to have started to slow in early August, the analyst told investors in a research note. Staszak added that the recovery in business travel will also likely take longer than he had previously expected, anticipating continued headwinds for Delta Air until business and international travel show "sustainable improvement." The analyst further noted that he prefers Southwest Airlines (LUV) in the group given its low-cost operations and clean balance sheet.
SLOWING BUDGET ENVIRONMENT: Goldman Sachs analyst Noah Poponak downgraded Lockheed Martin (LMT) to Neutral from Buy with a $402 price target. The analyst continues to view Lockheed as a "best-in-class Defense prime with a strong management team." However, the slowing budget environment makes it difficult for Lockheed's diversified portfolio to grow sales and there is uncertainty around the timing and rate of the plateau of the F-35 program, Poponak to investors in a research note. He sees stocks exposed to aerospace and business jet as more compelling in the medium term but does not see a "clearly identifiable driver for accelerating growth or a multiple re-rating."
The analyst also upgraded Embraer (ERJ) and Bombardier (BDRBF) to Buy from Neutral, Northrop Grumman (NOC) and General Dynamics (GD) to Neutral from Sell, downgraded Mercury Systems (MRCY) to Neutral from Buy, and cut Woodward (WWD) and L3Harris Technologies (LHX) to Sell from Neutral.
NEW SALES STREAMS: Barclays analyst Kannan Venkateshwar upgraded Warner Music Group (WMG) to Overweight from Equal Weight with a price target of $48, up from $38. The ongoing growth of streaming combined with new revenue sources could result in the music industry exceeding its mid-1990's peak revenues in the next five years, Venkateshwar told investors in a research note. He believes new revenue sources can add 8% to Warner Music's sales and 15%-20% in overall EBITDA over the next two years.
