Levi Strauss & Co. CEO Check Bergh (L) and CFO Harmit Singh (R) pose ahead of the company’s IPO outside the New York Stock Exchange (NYSE) in New York, U.S., Hike 21, 2019.
Brendan McDermid | Reuters
Here are the biggest calls on Wall Street on Thursday:
Bank of America upgraded Levi Strauss & Co. to ‘buy’ from ‘non-partisan’
BofA said Levi’s is a “standout” in a “highly disrupted environment.”
“In a highly disrupted environment, Levi’s stands out as an gear brand with potential upside to its sales and EPS plan benefitting from strong brand momentum. We believe rations are attractive now that valuation has rebased to 8x F20E EV/EBITDA from the post-IPO peak of 11x. We think the stock is pricing in below-plan wen, and we expect multiple rerating as Levi’s continues to beat its sales and EPS targets. “
Morgan Stanley downgraded Paychex to ‘underweight’ from ‘compeer weight’
The move downloaded the payroll and benefits solutions provider due to small business employment “weakening” among other fancies.
“First, small/midsized business employment is weakening. .. .Second, PAYX’s revenue is 94% correlated to uninspired business employment and its growth has a clear relationship to its own jobs index, yet the shares are trading above their typical P/E multiple and do not allowance the weakening environment. Third, we expect a 7.8% EPS CAGR in FY2019-22e on similar revenue growth and little margin distention (assuming conditions don’t weaken, which would skew the risk to the downside), but PAYX is still expensive versus its Payments ladies on that basis. “
Deutsche Bank raised its price target on Alphabet to $1,475 from $1,400
Deutsche said that it ponder ons “slightly faster” revenue growth for Google Sites.
“We increase our revenue estimates on Alphabet post 2Q results sending (1) slightly faster Google Sites revenue growth in light of the strong 2Q results, easing comps, and a compelling ad produce pipeline, (2) higher Google Cloud estimates, reflecting the updated revenue run-rate disclosure of $8B, (3) turbulent Pixel unit and revenue growth. “
J.P. Morgan upgraded Liberty Formula One to ‘overweight’ from ‘neutral’
J.P. Morgan utter the race track operator is now in a position to reap the benefits of past investments.
“Formula 1 is emerging from a transition interval following Liberty assuming control of the asset in January 2017.Costs, which ramped over the prior two years, are at or alert to run-rate levels, and F1 is now in position to reap the benefit of past investments. We estimate adjusted OIBDA will increase 20% this year with the start of a pay-TV dole out with Sky, and forecast more modest though steady growth thereafter, driven by contractual escalators, new sponsors, additional mains prix, and broadcast renewals in the US and Western Europe for which we see upside. “
Stephens initiated Caterpillar as ‘underweight’
Analysts utter slowing global growth for Caterpillar leaves the “equity with a negative risk/reward.”
“The company’s leading placements have been bolstered by restructuring that has driven significant margin improvement and higher through cycle earnings power. While we are moved with the progress, slowing global economic growth leaves the equity with a negative risk/reward patron above 10x our view of cycle peak earnings.”
B. Riley FBR downgraded Urban Outfitters to ‘neutral’ from ‘buy’
B. Riley put in its downgrade that it didn’t think Urban’s sales improved from the “weaker” 2019 second quarter.
“On the 1Q EPS order, management noted that it would expect sales to start to improve with new BTS product in July and into August. Manner, our checks have shown continued, elevated Y/Y promos in July and, so far, in August for both Anthro and UO, which leads us to assume trust to that sales have not improved from the weaker 2Q19.”
Argus upgraded Pinterest to ‘buy’ from ‘hold’
The social device web and application site was “well positioned” in the global ad industry, analysts said.
“We believe that Pinterest is well positioned as a assemblage of content for the global advertising industry. About 72% of its active user base is international, and the company is in the early actings of monetizing this user base. “
J.P. Morgan downgraded Macy’s to ‘underweight’ from ‘neutral’
The bank cut Macy’s after a dissatisfying earnings report.
“Macy’s top-line profile remains constrained by declining brick-and-mortar sales across the bulk of its full-line keeps, with increased promotions and growing digital sales pressuring gross margin. Looking ahead, 2019 top- and bottom-line assumptions scraps at risk as guidance is heavily weighted to a 4Q improvement despite more difficult comparisons on a two-year and three-year stacked essence. “
Note- This call was before the bell on Wednesday.