Check out today's top analyst calls from around Wall Street, compiled by The Fly.
PELOTON REMOVED FROM ANALYST FOCUS LIST, DOWNGRADED AT SEVERAL FIRMS: JPMorgan analyst Doug Anmuth lowered the firm's price target on Peloton Interactive (PTON) to $90 from $138 and keeps an Overweight rating on the shares. Despite beating subscriber guidance in fiscal Q1, Peloton's earnings were disappointing as the company significantly reduced its outlook for fiscal 2022, Anmuth tells investors in a research note. The operating environment is difficult to project, the company over-estimated near-term demand and traffic levels for both the Bike and Tread, says the analyst. Anmuth removed Peloton from JPMorgan's Analyst Focus List but maintains an Overweight rating entering the company's "strongest seasonal period."
Meanwhile, MKM Partners analyst Rohit Kulkarni downgraded Peloton to Neutral from Buy with a price target of $70, down from $130, after its Q1 earnings miss and guidance cut. The analyst states that he was wrong about the company's ability to execute amidst re-opening and competitive headwinds, adding that based on the management's commentary, we believe consumer preferences appear to have changed rapidly. The shift is leading to lower conversions on website and foot traffic, higher recall-related costs, and lower gross margin as sales mix-shifted towards low-price bikes, Kulkarni tells investors in a research note.
Stifel analyst Scott Devitt downgraded Peloton Interactive to Hold from Buy with a price target of $70, down from $120. The company's fiscal year outlook has seen "rapid deterioration," Devitt tells investors in a research note. It was initially provided last quarter and significantly reduced alongside the fiscal Q1 results as Peloton lowered revenue guidance by $800M or 15% at the midpoint, citing limited visibility due to challenging compares, reopening economies, and cost pressures related to supply chain constraints, says the analyst. He expects it will take several quarters to determine a more normalized pace of growth and sees limited near-term upside as Peloton works through this "digestion period."
Analysts at Telsey Advisory and WestPark Capital also downgraded Peloton shares.
INCREASED UNCERTAINTY: Morgan Stanley analyst Sanjit Singh downgraded Citrix (CTXS) to Underweight from Equal Weight with a price target of $85, down from $90. While the company's Q3 revenue was ahead of estimates, the Q4 sales, margins and earnings guide was below expectations, Singh tells investors in a research note. Management plans cost cuts to restore margins and unlock resources to invest for growth, says the analyst. However, in the context of rising competitive threats, Singh thinks a "more aggressive commitment to product innovation is needed to secure durable growth." He cites increased near-term uncertainty and lower estimates for the downgrade.
SHAKE SHACK UPGRADED: BTIG analyst Peter Saleh upgraded Shake Shack (SHAK) to Buy from Neutral with a $100 price target. Despite the sales and margin miss in Q3, the company's fundamentals appear to have "bottomed," and the return to work along with an increase in tourism activity should drive outperformance, the analyst tells investors in a research note. Saleh adds that while he has limited visibility on commodities, the more aggressive price increase taken in October is evidence that management will defend margins at this level.
PAPA JOHN'S DOWNGRADES: Deutsche Bank analyst Brian Mullan downgraded Papa John's (PZZA) to Hold from Buy with a price target of $136, up from $127. The analyst cites valuation for the downgrade following "another strong quarter." Both adjusted earnings and adjusted EBITDA were ahead of consensus, Mullan tells investors in a research note.
Additionally, Northcoast analyst Jim Sanderson downgraded Papa John's to Neutral from Buy with a $136 price target, noting that the stock has caught up to his "bullish price target." He believes sales growth will trend "more towards historical norms in 2022," forecasting low to mid-single-digit same-store sales growth and mid to high single digit unit growth with continued inflationary cost pressures.
NIKOLA DOWNGRADED AFTER RALLY: BTIG analyst Gregory Lewis downgraded Nikola (NKLA) to Neutral from Buy without a price target following the company's Q3 results. The quarter helped push the stock up 21% on the day and to its highest level since July, Lewis tells investors in a research note. The analyst likes Nikola's long-term story but with the stock up 50% over the last month he downgrades the shares on valuation. Lewis sees the potential for the hydrogen side of the business to be worth upwards of $30 per share as a standalone business, but is "waiting for more tangible signs of execution."
Peloton
-3.84 (-4.27%)
Citrix
+0.73 (+0.77%)
Shake Shack
+2.37 (+3.12%)
Nikola
+2.715 (+21.36%)
Papa John's
+16.77 (+13.63%)