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Top Analyst Upgrades and Downgrades: Chesapeake, CME, Constellation, Dominion Energy, EA, Gap, Netflix, Starbucks, Viacom, Yum, Zynga and More
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Stocks were indicated to open lower on Friday, but Thursday’s soft opening ended up marking another day of gains after Fed Chair Powell spoke and soothed more rate-hike fears. It is important to realize that the Dow Jones industrial average has bounced about 1,300 points from its lows right after the first of the year. Investors have become used to the notion that buying the sell-offs has come with less reward, or even more losses, than in prior years. This has made it more difficult to position assets for the long haul, when there has been so much volatility.
24/7 Wall St. reviews dozens of analyst research reports each day of the week. Our goal is to find new ideas for investors and traders alike. Some of these analyst reports cover stocks to buy, while 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 Friday, January 11, 2019.
Activision Blizzard Inc. (NASDAQ: ATVI) was started with an Overweight rating and assigned a $65 target price (versus a $51.35 prior close) at Stephens.
Builders FirstSource Inc. (NASDAQ: BLDR) was downgraded to Sector Perform from Outperform at RBC Capital Markets.
Chesapeake Energy Corp. (NYSE: CHK) was reiterated as Outperform and its target price was raised to $4.00 from $3.50 at Raymond James after its solid forecast for production and hedges.
CME Group Inc. (NASDAQ: CME) was downgraded to Neutral from Buy at Merrill Lynch.
Constellation Brands Inc. (NYSE: STZ) was maintained as Buy at Argus, but the independent research firm cut its price target to $210 from $260 after a poor earnings result.
DCP Midstream L.P. (NYSE: DCP) was started with an Outperform rating and assigned a $36 target price (versus a $31.70 close) at Raymond James. It has a consensus target price of $42.21, and the master limited partnership has better than a 10% yield equivalent for its distribution.
Dominion Energy Inc. (NYSE: D) was downgraded to Underperform from Neutral and its target price was lowered to $69 from $72 (versus a $71.90 close) at Merrill Lynch.
Darden Restaurants Inc. (NYSE: DRI) was raised to Buy from Neutral with a target price of $120 (versus a $105.78 close) at Merrill Lynch.
Electronic Arts Inc. (NASDAQ: EA) was started with an Overweight rating and assigned a $125 target price (versus a $91.01 close) at Stephens.
Franklin Resources Inc. (NYSE: BEN) was downgraded to Underperform from Neutral at Merrill Lynch.
Gap Inc. (NYSE: GPS) was downgraded to Underweight from Overweight at Barclays. Shares closed down 3.1% at $25.25 with weaker mall-based retail stocks on Thursday, and they were indicated down another 2.9% at $24.51 on Friday. The consensus target price was $29.50.
Glu Mobile Inc. (NASDAQ: GLUU) was started with an Overweight rating and assigned a $10.50 price target (versus a $9.09 close) at Stephens.
L Brands Inc. (NYSE: LB) was maintained as Neutral but the price target was lowered to $30 from $36 at Credit Suisse, which noted that the hope for a recovery now looks like it is being pushed out farther.
Legg Mason Inc. (NYSE: LM) was raised to Neutral from Underperform at Merrill Lynch, but also Deutsche Bank downgraded it to Hold from Buy. After shares closed at $26.81, the consensus target price was still up at $30.50 ahead of the calls.
Netflix Inc. (NASDAQ: NFLX) was maintained as Overweight but the price target was lowered to $430 from $475 at Morgan Stanley. Also, Raymond James raised it to Strong Buy from Outperform and raised the price target to $450 from $435. UBS also raised Netflix to Buy from Neutral with a $410 price target. Netflix closed up 1.5% at $324.66 on Thursday and was indicated up another 1.6% at $330.00 on Friday. Its consensus target price was $389.85 ahead of these calls.
Northern Trust Corp. (NASDAQ: NTRS) was downgraded to Neutral from Buy at Merrill Lynch.
Okta Inc. (NASDAQ: OKTA) was started as Overweight and assigned an $80 target price (versus a $68.84 close) at Piper Jaffray. The consensus target price is $76.06.
PulteGroup Inc. (NYSE: PHM) was started with a Neutral rating and given a $30 target price at Buckingham Research. RBC Capital Markets downgraded it to Underperform from Sector Perform.
Starbucks Corp. (NASDAQ: SBUX) was downgraded to Underperform from Neutral and the target price was lowered to $68 from $75 at Goldman Sachs. The firm feels that Starbucks will be the next big company after Apple to warn about its business in China hurting overall results. The stock closed up 0.5% at $64.19 ahead of the call but was indicated down almost 3% at $62.38 after the downgrade, and its consensus target price was $68.64. Shares have traded between $47.37 and $68.98 in the past year.
Sunoco L.P. (NYSE: SUN) was downgraded to Underperform from Neutral at Merrill Lynch.
Take-Two Interactive Software Inc. (NASDAQ: TTWO) was started with an Overweight rating and assigned a $138 target price (versus a $110.00 close) at Stephens.
Texas Roadhouse Inc. (NASDAQ: TXRH) was raised to Buy from Neutral and the target price was raised to $72 from $64 (versus a $64.33 close) at Goldman Sachs.
Toll Brothers Inc. (NYSE: TOL) was started with a Neutral rating at Buckingham Research.
Viacom Inc. (NASDAQ: VIA) was raised to Outperform from In-Line with a $37 price target (versus a $32.36 close) at Imperial Capital. Viacom has a 52-week range of $27.01 to $40.64.
VMware Inc. (NYSE: VMW) was reinstated as Neutral with a $160 target price at Credit Suisse. The firm still sees some positives but also sees risk/reward more fairly balanced at current valuations.
Weight Watchers International Inc. (NYSE: WTW) was downgraded to Neutral from Overweight at JPMorgan.
Yum! Brands Inc. (NYSE: YUM) was downgraded to Sell from Neutral and the target price was lowered to $76 from $83 at Goldman Sachs. After closing up 0.7% at $91.79 on Thursday, the stock was indicated down 2.2% at $89.76 on Friday. Its consensus target price was $95.00.
Zscaler Inc. (NASDAQ: ZS) was started with an Overweight rating and assigned a $50 target price (versus a $45.41 close) at Piper Jaffray. The consensus target price is $44.04, and the 52-week range is $24.76 to $48.24.
Zynga Inc. (NASDAQ: ZNGA) was started with an Equal Weight rating at Stephens.
Foundation Building Materials (NYSE: FBM) and BMC Stock Holdings Inc. (NASDAQ: BMC) both were started with Neutral ratings at Credit Suisse. Despite positive company-specific factors in margin expansion and high free cash flows, the firm sees moderating housing activity and an uncertain macro backdrop to leave the stocks range-bound.
The World Gold Council, which is by its nature and target industry is supposed to be positive about the prospects of gold, issued a very convoluted outlook with the market turmoil and uncertainties clouding its outlook for gold in 2019.
Thursday’s top analyst calls included Bed Bath & Beyond, Boeing, Constellation Brands, Dell Technologies, Dollar General, Lockheed Martin, National Oilwell Varco, Snap, Twitter, Yelp and many more.
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