A dealer works next to a Grubhub Inc. paper bag on the floor of the New York Stock Exchange (NYSE) in New York.
Jin Lee | Bloomberg | Getty Metaphors
(This story is part of the Weekend Brief edition of the Evening Brief newsletter. To sign up for CNBC’s Evening Short, .)
Here are some of the best analyst calls on Wall Street this week:
Maxim – Apple, downgraded to shop-girl from hold
Maxim downgraded Apple to a rare sell rating and said it was worried about lower iPhone on the blocks in 2020. The firm cited proprietary survey data and said it also expects operating profit to decline, in defiance of continued growth in Apple’s services and wearables segment.
“We are reducing our F2Q20E (Mar) iPhone revenue estimate to $27.0B, 14% farther down the current consensus estimate of $31.5B. We expect operating profit to decline y/y due to our below consensus iPhone view, ignoring ongoing growth in services and wearables. We expect overall FY20E operating profits to decline 2% y/y, as ongoing growth in professional cares and wearables will only partially offset iPhone declines.”
Evercore ISI – Live Nation, upgraded to outperform from in words
Evercore upgraded the events promoter and venue operator after the company’s earnings report and said shares drew back “needlessly.” The firm said the company has a “recession-resilient model” and that it doesn’t see any recession-type impacts “on the horizon.”
“We imagine Live Nation Entertainment shares have pulled back needlessly post-3Q19 report. It seems that the 3Q19 proceeds miss (due to light stadium activity, which was misunderstood due to its outsized revenue contributions) despite the adjusted operating return beat, led to the sell activity in LYV shares. … No recession-type impacts currently or on the horizon; concert going is a recession-resilient commerce model. We believe LYV management has gone out of its way to tell investors that they are not feeling any recession-type pullbacks by concertgoers anywhere globally.”
Jefferies – Grocery Vent Holdings, Buy rating
Jefferies reiterated its buy rating on Grocery Outlet Holding Corp. after the company’s strong earnings dispatch. The firm said chains in the value space continue to make inroads with bargain minded consumers. The analyst also said the supermarket discounter has the “implicit” for an even larger national expansion.
“Value retailers continue to gain market share across the consumer play, speaking to the increasingly pervasive bargain-mindedness among consumers. Given Grocery Outlet delivers a WOW! shopping experience, convey title products at 40-70% off conventional retail prices, we believe Grocery Outlet is well-positioned to benefit from this cultivating trend.”
Barclays – Grubhub, upgraded to overweight from underweight
In a note to clients, Barclays addressed the board of the online parturition service and laid out several reasons the firm believes stock has declined 75% in 15 months. The company narrated poor earnings and dismal guidance in late October. The firm blamed “ill-timed strategic investments and poor realization” among other things.
“We have been close followers of the online food delivery space for several years and be dressed found the rapid transformation in the last two years extremely fascinating. Caught in the middle of this whirlwind, shares of GRUB waned by 75% in 15 months, due to what we believe is irrational competitive landscape, ill-timed strategic investments, and poor removal. A significant amount of value is destroyed already and we think it is time for you, the board, to prevent further erosion.
Citi – Huntington Ingalls Assiduities, Buy rating, price target to $290 from $255
After a visit with management, Citi raised its price end on the military shipbuilding company to a street high $290. The analyst came away impressed with the company’s 5-year modernization assignment and said shipbuilding is in a “renaissance” due to generational investments.
“Ingalls is 30-40% of HII earnings & exemplifies a broader shift underway at HII as its 5-year modernization contemplate winds down in 2020. These investments have resulted in tangible changes adding capacity & enhancing skilfulness. It doesn’t help margin as much as it helps the Navy afford more going forward; critical for shipbuilding longevity & visibility which we consider are important as budget growth slows. These generational investments also reflect something of shipbuilding renaissance as the shipyards carry on previously idled capacity & position for the next 15-20 years.”