Visits: 2
Oppenheimer is upgrading the stock based on a more upbeat market narrative and significant company transformation.
“We are lifting our rating on Best Buy to Outperform and establishing a 12-18 month price target of $86 for shares… Over the past few years, under the direction of new senior leadership, Best Buy has undergone a significant transformation, whereby it evolved from a traditional chain of large-format superstores to one of retail’s preeminent omni-channel operators, which utilizes digital well as a means to connect better with consumers and enhance underlying disciplines… The market narrative on BBY is now more upbeat… That said, we believe investors are still not fully embracing improved sales and EPS power of Best Buy, particularly as new drivers for the company are beginning to emerge…”
J.P. Morgan is downgrading Sherwin-Williams based on valuation and volume trends not moving in favor of the company.
“The trajectory of the long-term growth rate expectation for the domestic housing market typically begins to flatten with interest rate inflation; however, the Fed seems to be in a wait-and-see mode for now… Uncertainties over a slower growing economy also tend to favor investments in less cyclical equities…. We think that volume trends in the first quarter of 2019 are not moving in favor of Sherwin-Williams…. The strong January Paint Store trends from a backlog of paint contractor work did not continue into February…. We think demand trends in March, typically the strongest month of the quarter, may not be appreciably higher with wet weather likely a factor…. Moreover, higher cost inventories built in 4Q:18 are still to be worked through…. We lower our 1Q:19 EPS estimate for Sherwin-Williams from $3.96 to $3.80. Our 2019 EPS forecast is $21.95 (previously $22.10)… Our 2020 EPS projection is $25.75… We think there may be more favorable entry points into SHW shares as the magnitude of the 1Q:19 headwinds become clearer… Our general orientation is to think that raw material prices for paint and coatings companies will be lower in 2H:19 compared to 2018, and we estimate that at least an ~$80m raw material benefit may accrue to SHW’s EBITDA in the back half of 2019…”
J.P. Morgan upgraded the company on iPhone volume stabilization.
“We are upgrading shares of Lumentum on the combination of: 1) solid outlook for the telecom business on the back of strong growth led by 5G investments; 2) upside to synergy targets relative to recent acquisition of Oclaro; and 3) limited downside risk relative to iPhone volume expectations, which has been a key driver of sentiment on the shares… We are raising our FY19E, FY20E, and FY21E EPS estimates by +3%, +12%, and +13%, respectively, which implies upside of +2%, +2%, and +4% relative to consensus estimates, largely driven by greater than anticipated synergies from the Oclaro acquisition…. We raise our December 2019 price target to $65 (implying +25%upside to current prices) vs. $50 prior, led by our higher earnings estimates and target P/E multiple of 12.0x vs. 10.0x prior to reflect the lower concerns we have relative to customer concentration with Apple following a stabilization in the iPhone shipment outlook, which should drive focus back to strong fundamentals in the core business…”
Wedbush is upgrading Chipotle saying the company now had a lack of negative catalysts.
“Checks suggest Q1 SSS growth in-line with current expectations….Given health of near-term trends, we can no longer describe drivers of accelerating 2-year transaction growth in 2019 as purely theoretical….No longer see risk to unit-level margin expectations….We do believe G&A guidance remains a risk….Increasing our 2019 EPS estimate to $12.28 from $12.12 on a slightly lower labor expense assumption…”
Stephens initiated SurveyMonkey as overweight on its ability to elevate investor perceptions and its strong growth prospects.
“We are initiating coverage on SVMK Inc. and giving shares an overweight (Vol.) rating and a $20 twelve month price target… The crux of our thesis is that SurveyMonkey has the potential to accelerate growth to 20%+ and that the company will derive more and more of its revenues from larger, stickier enterprise contracts… We believe that these dynamics will help shift some investors’ perceptions that this is more of a churn-prone consumer internet business and elevate it to the position as an enterprise SaaS company… This transformation won’t happen overnight, but we believe the current 7x EV/NTM revenue multiple provides a good entry point for investors given the peer group of 20%-type SaaS companies trades at 10x NTM revenues…”
Longbow says the Craftsman brand presents great growth opportunity for the company.
“We are upgrading SWK to BUY in conjunction with our analysis of its opportunity with Craftsman through 2022. SWK’s current valuation discount to the SP500 is in contrast to the EPS growth opportunity (including the Craftsman brand) as outlined in this report… This SWK report evaluates the purchase of the Craftsman brand and the prospects for its contribution to growth through 2022… Our detailed proforma analysis projects brand and category-driven organic growth across the three primary Craftsman product categories, along with the legacy SWK products, to evaluate the impact to revenue, EBIT and EPS relative to the SWK “Vision 2022″ plan….We believe the SWK investment in Craftsman and associated initiatives are capable of driving $1.1+ billion of 2022 revenue and $0.94 in incremental adjusted EPS… Along with anticipated 2022 Flexvolt revenue of $400+ mm and core tools & storage sales of $10.5 billion, we view SWK as well-positioned at this point to hit their targeted $12-14 billion of 2022 Tools & Storage revenue…”
Wedbush says Europe will be a liability on the company in the future.
“Our previous investment thesis on BKNG centered on the company’s dominant position in Europe, and the superior profits that go hand in hand with such a position. While we continue to believe in the favorability of European OTA exposure in the long term, this exposure is likely to represent a liability during 2019, as it is could amplify both earnings revision risk and multiple compression risk…”