A JetBlue plane
Tom Williams | CQ-Roll Call Group | Getty Images
Here are the biggest calls on Wall Street on Wednesday:
Deutsche Bank named JetBlue as a ‘catalyst call’ short-term investment idea
Deutsche said investors should buy the airline’s stock and that it had a “good” balance sheet and “solid” market position among other things.
“Recent pullback in JBLU share price provides an attractive entry-point, in our view, as the stock is currently trading at 6.8x our 2020 EPS estimate of $2.40 or two standard deviations below its 10-year forward P/E average of 10.4x. Additionally, we think the name has attributes that should help mitigate the impact of growing trade disputes and/or weaker GDP growth: good balance sheet, solid market position, primarily domestic operator and costs under control as it is on track to achieve it flat to 1% 2018 – 2020 CASM CAGR goal. “
Credit Suisse named Monster Beverage as a ‘top pick’
Credit Suisse said the Reign performance energy drink was showing “mixed” trends.
“We reiterate our Outperform rating and move Monster to our Top Pick following price depreciation of 15% from July. Reign’s primary objective—to arrest share gains at Bang—appears to have been successful. Despite ongoing distribution gains, Bang’s share has flattened at 8% since Reign launched. In fact, Bang lost share in the most recent period. “
Stifel upgraded Papa John’s to ‘buy’ from ‘hold’
Stifel raised Papa John’s after the company announced a new CEO.
“We believe the CEO change represents a tactical opportunity for investors giving them time to weigh the results of the turnaround. We were surprised at the speed with which the board acted to effect this change and believe investors will likely give CEO Rob Lynch some time to demonstrate his strategy is working. We have previously seen sentiment reverse quickly on highly-shorted stocks, such as Chipotle and Dine Brands, following a change in executive leadership with these stocks experiencing large moves well before better results materialized.”
Bank of America downgraded Autodesk to ‘underperform’ from ‘neutral’
Bank of America cut the maker of computer-aided design software after the company reported earnings and lowered its 2020 earnings forecast.
“Autodesk printed stronger than expected July Q but lowered F20 guidance across the board, albeit slightly to account for weakness in manufacturing and construction in select geos such as UK, Germany and China. We downgrade ADSK from Neutral to U/P with a new PO of $127 vs $170 using triangulation method on lower ests/valn multiples. “
Barclays downgraded Anheuser-Busch InBev to ‘underweight’ from ‘equal weight’
Barclays said in its downgrade of the beer maker that the market’s valuation of the company was “overly simplistic.”
“ABI has had a good share price run in recent months, but we see 3 reasons for this to end. We d/g to UW and go against the 92% of analysts who are buyers or holders. The 3 critical operational issues are: 1) Key markets of Brazil, Colombia and South Africa are likely to cede share to Heineken. 2) ABI’s largest market, the US, is likely remain in structural decline. 3) ABI’s Chinese business is likely to underperform other European operators in the market. The market’s valuation of ABI is overly simplistic, in our view – it ignores inflation and minority interests. “
Note: This call occurred before the bell on Tuesday.