Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MOVING TO THE SIDELINES: Credit Suisse analyst Kaumil Gajrawala downgraded PepsiCo (PEP) to Neutral from Outperform with a price target of $157, up from $155. The company kicked off beverage earnings with "remarkable" results as the crucible of the pandemic yielded improvement across categories and geographies, Gajrawala told investors in a research note. However, the post-earnings share reaction "signals cooling sentiment," the analyst noted. With PepsiCo shares up 14% year-over-year, Gajrawala downgraded the name on valuation.
ON SLOWING ENGAGEMENT: Wedbush analyst James Hardiman downgraded Peloton (PTON) to Neutral from Outperform with a price target of $115, down from $130. With consumers now back to having a full complement of in-person workout options along with an "unprecedented and ever-growing list" of digital and at-home choices, Hardiman argued that the next leg of Peloton's growth story post-pandemic will require savvy marketing and compelling new products. A series of engagement data across various social media platforms, as well as Peloton's own metrics and Google (GOOG) trends, have all seen year-over-year growth decelerate substantially in the June quarter, Hardiman noted. Though a meaningful deceleration is factored into management's fourth quarter guidance and consensus estimates, the analyst believes the bigger concern for investors should be the company's upcoming full year 2022 guidance.
POST-COVID RECOVERY: Goldman Sachs analyst Brooke Roach initiated coverage of Gap (GPS) and Tapestry (TPR) with Neutral ratings and price targets of $35 and $42, respectively. The analyst initiated coverage of the Apparel and Brands sector saying that as the sector emerges from an "unprecedented eighteen months of volatility," the post-COVID recovery period has been supportive for apparel and brands. For Gap, Roach sees better opportunities for stock outperformance in other names and believes its recent transformational changes are now well understood. Regarding Tapestry, he believes the stock is "without a strong near-term catalyst" amid toughening compares.
The analyst also initiated coverage of
BUY ESTEE LAUDER, ULTA BEAUTY: Raymond James analyst Olivia Tong upgraded Estee Lauder (EL) to Strong Buy from Market Perform with a $355 price target. Tong expects Estee Lauder to see a meaningful acceleration post-COVID as consumers return to school, work, travel and social gatherings, and feels it is a best-in-class performer within the high-growth Beauty category.
The analyst also upgraded Ulta Beauty (ULTA) to Outperform from Market Perform with a $395 price target after taking over coverage of the name. The Beauty category is well-positioned to accelerate as consumers reengage post-COVID, replenish their makeup drawer and look for something new, Tong contended. The analyst believes fast-growing trends like self-care/skincare have staying power and will benefit Ulta, already growing to 28% of sales versus 21% two years ago.
Additionally, Tong upgraded Sally Beauty (SBH) to Market Perform from Underperform, Newell Brands (NWL) to Strong Buy from Market Perform, and downgraded Church & Dwight (CHD) to Underperform from Market Perform. The analyst also initiated coverage of e.l.f. Beauty (ELF) with an Outperform, and Coty (COTY) and Yatsen (YSG) with Market Perform ratings.
ANALYST FOCUS LIST: JPMorgan analyst Samik Chatterjee raised Apple's (AAPL) price target to $175 from $170 and added the shares to the firm's Analyst Focus List as a "Growth idea." He kept an Overweight rating on the name. Data points supporting a favorable view on the shares "continue to trickle in," including an upside revision to iPhone 12 build estimates by JPMorgan's Apple Supply Chain analyst as well as continued strength in sales of Mac devices, Chatterjee told investors in a research note. The analyst believes Apple shares are "positioned for upside," led by upward revisions to iPhone 12 volumes and share gains in key geographies, including China, as well as upside to investor expectations for the upcoming iPhone 13, which he believes remain low.
PepsiCo
+0.72 (+0.47%)
Peloton
-4.335 (-3.62%)
Alphabet
+43.09 (+1.65%)
Alphabet
+36.91 (+1.45%)
Gap
+0.21 (+0.67%)
Tapestry
+0.17 (+0.41%)
Ralph Lauren
+0.52 (+0.45%)
Capri Holdings
+0.01 (+0.02%)
Canada Goose
+0.18 (+0.43%)
VF Corp.
-0.72 (-0.88%)
Casper Sleep
-0.405 (-5.28%)
Yeti
+2.17 (+2.35%)
Levi Strauss
+0.29 (+1.01%)
Kontoor Brands
+1.05 (+1.84%)
Lululemon
+11.07 (+2.99%)
Estee Lauder
+4.11 (+1.28%)
Ulta Beauty
+7.91 (+2.33%)
Sally Beauty
+0.4 (+1.90%)
Newell Brands
+0.51 (+1.93%)
Church & Dwight
-0.94 (-1.09%)
e.l.f. Beauty
+0.48 (+1.87%)
Coty
+0.16 (+1.85%)
Yatsen
-0.165 (-1.85%)
Apple
+3.18 (+2.18%)