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Top Analyst Upgrades and Downgrades: Cree, Goldman Sachs, Home Depot, IBM, Lennar, Lowe's, NetApp, Netflix, Starbucks, United Continental and More

Jon C. Ogg

Published: October 17, 2018 9:10 am

Last Updated: January 11, 2020 4:19 pm

Stocks were indicated lower on Wednesday morning after Tuesday’s massive snapback rally. The stock market’s all-time highs are still within striking distance, but investors have seen lower upside from buying immediately after the big market pullbacks in 2018 than in prior years. And in earnings season they also are hearing the financial media referring more often to a “peak cycle” with the strong earnings. Now investors have to consider how they want to position their investments for the rest of the year and into 2019.

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 cover stocks to buy, but others cover stocks to sell or to avoid.

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

These are the top analyst upgrades, downgrades and initiations seen on Wednesday, October 17, 2018.

American Airlines Group Inc. (NASDAQ: AAL) was raised to Buy from Hold and the target price was raised to $47 from $40 (versus a $33.28 prior close, after a 4.7% gain on the day) at Deutsche Bank. American Airlines has a consensus target price of $48.69 and its 52-week range is $30.75 to $59.08.

Bio-Rad Laboratories Inc. (NYSE: BIO) was started with a Buy rating and assigned a $350 target price (versus a $289.31 close, after a 4.1% gain) at Goldman Sachs. It had a consensus target price of $348.00.

Comerica Inc. (NYSE: CMA) was maintained as Outperform but the price target was cut to $100 from $108 (versus an $83.90 close) at BMO Capital Markets.

Cree Inc. (NASDAQ: CREE) was maintained as Buy with a lowered price target to $58 from $60 at Canaccord Genuity, and Nomura/Instinet maintained a Neutral rating while lowering its target to $40 from $44. These are post-earnings calls, and Cree was up 7.2% at $37.54 on Tuesday, but shares were indicated down 1% at $37.15 on Wednesday. Its prior consensus target price was $46.90.

Delta Air Lines Inc. (NYSE: DAL) was raised to Buy from Hold and the target price was raised to $60 from $53 (versus a $53.11 close, after a 2.4% gain) at Deutsche Bank. Delta has a consensus target price of $67.33, and its 52-week high is $60.79.

Goldman Sachs Group Inc. (NYSE: GS) managed to close up 3% at $221.70 after earnings on Tuesday. BMO Capital Markets maintained it as Market Perform but raised the price target to $276 from $261. Goldman Sachs has a consensus target price of $275.39.

Home Depot Inc. (NYSE: HD) was downgraded to Neutral from Outperform and the target was lowered to $204 from $224 at Credit Suisse. Home Depot shares closed up 1.2% at $193.58 on Tuesday and were indicated down 1.3% at $191.00 on Wednesday.

International Business Machines Corp. (NYSE: IBM) was up 2.8% ahead of earnings, but the post-earnings indications on Wednesday showed the shares down 4.5% at $138.50. IBM was maintained as Market Perform at BMO, with a target cut to $164 from $172. Wedbush Securities maintained its Neutral call and $185 price target due to its growth areas lacking consistent and accelerating growth to get the company out from under its IT-services cloud. Two key takes on IBM: Full Analyst Montage and also Should Ginni Rometty finally be fired?

Lennar Corp. (NYSE: LEN) was downgraded to Neutral and the target price was cut to $45 from $55 (versus a $44.10 close) at Credit Suisse.

Lowe’s Companies Inc. (NYSE: LOW) was downgraded to Neutral from Outperform and the target price was cut to $111 from $115 at Credit Suisse. The shares closed up 1.25% at $105.98 on Tuesday, but they were indicated down 1.7% at $104.19 on Wednesday.

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MongoDB Inc. (NASDAQ: MDB) was started as Outperform and assigned an $80 price target (versus a $70.30 close) at Oppenheimer. The consensus target price is $83.75, and the 52-week trading range is $24.62 to $85.25.

NetApp Inc. (NASDAQ: NTAP) was raised to Buy from Neutral with a $91 price target (versus a $77.92 close, after a 3.4% gain) at Goldman Sachs. NetApp had a consensus target price of $87.89, and its shares were indicated up another 2.7% at $80.00 on Wednesday morning.

Netflix Inc. (NASDAQ: NFLX) was up 4% at $346.40 ahead of earnings, but Wednesday’s post-earnings gain is up 10% at $382.00 after the company surged beyond subscriber growth expectations. BMO Capital Markets reiterated its Outperform rating and raised its target to $440 from $400. Canaccord Genuity reiterated it as Buy and raised the target to $470 from $450, and Citigroup reiterated its Buy rating and raised its target to $400 from $375. Netflix also was downgraded to Sector Weight from Overweight in a valuation call by KeyBanc Capital Markets, while Wedbush maintained its lowest street standing with an Underperform rating and $150 price target. Here is the FULL NETFLIX COVERAGE.

Pure Storage Inc. (NYSE: PSTG) was raised to Neutral from Sell with a $23 price target (versus a $23.38 close, after a 4,8% gain) at Goldman Sachs.

Simply Good Foods Co. (NASDAQ: SMPL) was started with a Buy rating and assigned a $22 price target (versus an $18.92 close, after a 6.4% gain) at Buckingham. The consensus target price is $20.20.

Smart Sand Inc. (NYSE: SND) was downgraded to Underperform from Hold with a $2.50 price target (versus a $3.82 close) at Jefferies. The stock was indicated down almost 11% at $3.40 early on Wednesday, and its prior consensus target price was all the way up above $67.

Starbucks Corp. (NASDAQ: SBUX) was reiterated as Outperform and the price target was raised to $64 from $60 (versus a $57.81 close) at Wells Fargo. Starbucks is now up 22% from its 52-week low of $47.37, and its 52-week high is $61.94. The consensus target price is $58.25.

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United Continental Holdings Inc. (NYSE: UAL) was raised to Buy from Hold and the target price was raised to $100 from $91 (versus an $83.52 close) at Deutsche Bank. Citigroup reiterated it as Buy and raised the price target to $100 from $99. United Continental has a consensus target price of $95.23, and its 52-week high is $91.39. Its full earnings coverage showed why they are upbeat.

UnitedHealth Group Inc. (NYSE: UNH) was reiterated as Buy and the price target was raised to $320 from $315 (versus a $272.57 close) at Merrill Lynch. UnitedHealth has a consensus target price of $60.00.

U.S. Silica Holdings Inc. (NYSE: SLCA) was downgraded to Hold from Buy with a $20 price target (versus an $18.71 close) at Jefferies. It was indicated down almost 5% at $17.80 on Wednesday.

Workday Inc. (NASDAQ: WDAY) was raised to Outperform from Market Perform with a $165 target price (versus a $134.19 close, after a 5.6% gain) at Bernstein.

Wednesday’s top analyst calls included Adobe, Bank of America, Boston Scientific, Facebook, Las Vegas Sands, Merck, Tilray, TJX Companies, Valero Energy and many more.