Check out today's top analyst calls from around Wall Street, compiled by The Fly.
STIFEL TAKING PROFITS ON AMARIN AFTER FDA LABEL APPROVAL: Stifel analyst Derek Archila downgraded Amarin (AMRN) to Hold from Buy with a price target of $28, up from $26, after the FDA approved Vascepa for an expanded indication as an adjunct therapy in patients on statins with high triglycerides who have established CV disease and also for diabetic patients with greater than 2 cardiovascular risk factors. While he said "there is no doubt in our mind Vascepa will be a multi-billion dollar product," Archila prefers to "take profits" at the stock's current valuation near $11B fully diluted. He also points to unpredictability around Vascepa's intellectual property litigation, the drug's "relatively short" exclusivity period, and AstraZeneca's (AZN) Epanova CVOT results next year as downside risks.
Meanwhile, H.C. Wainwright analyst Andrew Fein said he believes that characterization of triglyceride levels at 150mg/dL or higher did not come as a surprise, despite incorporation of patients with triglyceride levels as low as 135mg/dL in the REDUCE-IT trial. The analyst continues to think physicians can utilize their best judgment in assessing whether to assign the proven benefits of Vascepa in cardiovascular risk reduction when evaluating at-risk patients. Fein points out that his omega-3 proprietary physician survey indicated broad physician support for utilizing Vascepa with an expanded label in CV risk reduction. He reiterates a Buy rating on Amarin shares with a $51 price target.
SUSQUEHANNA UPS MICRON AND WESTERN DIGITAL: Susquehanna analyst Medhi Hosseini upgraded Micron (MU) to Positive from Neutral with a price target of $85, up from $45. While the analyst is reducing his FY20 EPS estimate to account for a downtick in near-term average selling price trends, Hosseini believes February guidance should mark the bottom and sees higher odds for a sustainable average selling price improvement in both DRAM and NAND starting in the May quarter and sustaining into the second half of 2020. In light of this view, Hosseini raised his FY21 EPS estimate and now projects earnings power in the $8-$10 per share range for Micron.
Additionally, Hosseini upgraded Western Digital (WDC) to Positive from Neutral with a price target of $90, up from $55. He expects the 5G smartphone build cycle to "start in earnest" late in the March quarter and combining this with cuts to NAND capital expenditures and wafer starts should lead to a tight NAND supply/demand balance by the June quarter, said the analyst.
GOLDMAN ADDS UNITEDHEALTH TO CONVICTION LIST: Goldman Sachs analyst Stephen Tanal upgraded UnitedHealth (UNH) to Conviction Buy from Buy with a price target of $330, up from $300. With an attractive commercial business, the number one market share position in Medicare Advantage and a top three position in Medicaid, UnitedHealthcare is "uniquely well-positioned" to utilize the services of Optum, Tanal tells investors in a research note. Over $19B of operating cash flow in 2020 will "handily cover" the company's $2.3B of capital expenditures, leaving the company well positioned to deploy capital against earnings growth via tuck-in acquisitions and share repurchases, adds the analyst.
In other Conviction List changes at the firm, Goldman Sachs analyst Asad Haider upgraded Dentsply Sirona (XRAY) to Conviction Buy from Buy with a $66 price target while Goldman Sachs analyst Asad Haider upgraded Amgen (AMGN) to Conviction Buy from Buy with a price target of $270, up from $263.
STIFEL SEES "BILLIONS" IN SALES FOR SAGE-217: Stifel analyst Paul Matteis says his meeting with management of Sage Therapeutics (SAGE) reaffirmed his view that, "though the precise event path is uncertain," the most likely eventual outcome remains that SAGE-217 will ultimately get approved and generate billions in sales. Sage continues to comb through the failed MOUNTAIN study data, and management's view is that a coalescence of factors drove the miss at day 15, Matteis tells investors in a research note. The analyst thinks Sage, after talking with the FDA, will and should initiate additional studies to bolster the SAGE-217 dataset. Despite an "undeniably riskier" story, Matteis added Sage Therapeutics to the Stifel Select List "under the premise that we're one positive trial away from the bull case being back on track." The analyst has a Buy rating on the shares with a $173 price target.
PEPSI CUT AT MORGAN STANLEY AFTER OUTPERFORMANCE: Morgan Stanley analyst Dara Mohsenian downgraded PepsiCo (PEP) to Equal Weight from Overweight with a price target of $145, down from $154, "mainly" due to valuation with the stock up 24% year-to-date. After four straight quarters of 4.3% or better two-year average organic sales growth for Frito-Lay North America, Mohsenian worries that top-line growth will slow as pricing power dissipates and comparisons become more difficult, the analyst added as another reason for the change in rating.
Amarin
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Micron
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Western Digital
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UnitedHealth
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Sage Therapeutics
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Dentsply Sirona
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Amgen
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PepsiCo
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