Investing

Top Analyst Upgrades and Downgrades: Chipotle, Etsy, Home Depot, PagSeguro, Snap, Walmart, Wingstop and More

Jon C. Ogg

Published: February 20, 2018 9:00 am

Last Updated: January 12, 2020 3:15 am

Stocks have reminded us that the market can go back down and have volatility again, but there is also the six-year-old trend of buying the dips as the top rewarding strategy. The bull market is now just about two weeks shy of being nine years old. Now investors still have to decide how they want to be positioned for 2018 and beyond.

24/7 Wall St. reviews dozens of analyst research reports each day of the week to find new ideas for investors and traders alike. Some analyst reports and research reports cover stocks to buy. Other reports cover stocks to sell or to avoid.

Additional color and commentary has been added on most of the daily analyst reports. The consensus analyst price targets and other valuation metrics are from the Thomson Reuters sell-side research service.

Stocks were indicated lower on Tuesday after a long weekend, but the futures had been lower in the wee hours of Tuesday’s futures session. These were the top analyst upgrades, downgrades and other research calls from Tuesday, February 20, 2018.

Chipotle Mexican Grill Inc. (NYSE: CMG) was maintained as Neutral at Credit Suisse, but the target price was raised to $290 from $275. The firm is assessing what’s priced in after the rally.

Cimarex Energy Co. (NYSE: XEC) was raised to Buy from Hold and the target price was raised to $142 from $138 at KLR Group.

Etsy Inc. (NASDAQ: ETSY) was reiterated as Buy and the price target was raised to $26 from $20 (versus a $20.96 prior close) at D.A. Davidson.

Gates Industrial Corp. PLC (NYSE: GTES) was started as Outperform with a $21 price target (versus an $18.29 close) at Credit Suisse. RBC Capital Markets started the stock as Outperform with $22 price target. KeyBanc Capital Markets started it with an Overweight rating and assigned a $22 price target.

Home Depot Inc. (NYSE: HD) was reiterated as Buy and with a $219 price objective at Merrill Lynch in its flash note after earnings, noting that it ended its year on a very strong note and noting that guidance was likely conservative. Home Depot was indicated up almost 2% at $190.60 on Tuesday morning, in a 52-week range of $143.25 to $207.71 and with a consensus analyst target price of $211.13.

IMAX Corp. (NYSE: IMAX) was reiterated as Outperform with a $30 price target (versus a $22.60 close) at Wedbush Securities. The pre-earnings call signaled that Wedbush expects fourth-quarter earnings ahead of consensus estimates on better margins.

Interpublic Group of Companies Inc. (NYSE: IPG) was downgraded to Hold from Buy with a $26 price target (versus a $25.33 close) at Pivotal Research.

Menlo Therapeutics Inc. (NASDAQ: MNLO) was started as Outperform with a $44 price target (versus a $34.88 close) at JMP Securities. Piper Jaffray started it with an Overweight rating and assigned a $48 price target.

Northrop Grumman Corp. (NYSE: NOC) was maintained as Buy with a $354 price target (versus a $356.00 close), but it was removed from the prized Conviction Buy list.

PagSeguro Digital Ltd. (NYSE: PAGS) has seen its quiet period end, and after closing up 4.4% at $30.36 on Friday, its shares were indicated up 1% at$30.67 on Tuesday. Merrill Lynch started it with a Buy rating and assigned a $34 price objective. Deutsche Bank started it as Buy with a $38 price target, while UBS started it as Buy with a $36 price target.

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resTORbio Inc. (NASDAQ: TORC) was started as Outperform with a $30 price target (versus an $18.76 close) at Wedbush. The firm believes that its TORC1 inhibition has the potential to be an effective geroprotection strategy for a number of the chronic diseases (immunosenescence, heart failure and neurodegenerative diseases). Evercore ISI started the shares as Outperform with a $28 price target. Merrill Lynch started the stock as Buy with a $23 price objective.

Rio Tinto PLC (NYSE: RIO) was downgraded to Neutral from Buy at Merrill Lynch.

Shire PLC (NASDAQ: SHPG) was downgraded to Neutral from Overweight with a $150 price target (versus a $134.06 close) at JPMorgan.

Snap Inc. (NYSE: SNAP) was downgraded to Sell from an already cautious Neutral rating and the price target was $14 (versus a $20.42 close) at Citigroup.

Tempur Sealy International Inc. (NYSE: TPX) was reiterated as Buy with a $90 price objective at Merrill Lynch. The firm noted that long-term gains can be seen after near-term pain from soft industry trends, a product launch timing and the closing of Mattress stores potentially helping it recapture sales and boost margins.

Walmart Inc. (NYSE: WMT) was maintained as Buy at Merrill Lynch in a flash note after earnings sent shares 6% lower to about $98. Its view is that e-commerce and Jet sales should reaccelerate in fiscal year 2019 and the firm kept Walmart as its top pick in the so-called Discount Store Decade. Walmart has a 52-week trading range of $69.33 to $109.98, and it had a consensus target price of $108.27.

Waste Management Inc. (NYSE: WM) was reiterated as Outperform and the price target was raised to $97 from $90 at Credit Suisse, with the firm noting that pricing is driving strong earnings and the free cash flow story is gaining into 2018.

Wingstop Inc. (NASDAQ: WING) was downgraded to Neutral from Outperform at Robert W. Baird.

Credit Suisse’s strategy team has noted how equities have been very rate-sensitive, and it lowered its “neutral rate” to 3.5% from 5.0% on the 10-year Treasury. That being said, the firm is actually of the opinion that investors incorrectly view 3.5% as a cliff when the reality (using historical metrics) shows that stocks are the least sensitive to rates at this point.

Friday’s top analyst calls included Alarm.com, Biogen, Blue Apron, Cisco, Lowe’s, Pandora Media, Waste Management and many more.