Tuesday, July 27

Tesla, Alphabet, United Technologies & more

Elon Musk, co-founder and chief executive officer of Tesla Motors Inc., speaks during an interview at the company’s assembly plant in Fremont, California, U.S., on Wednesday, July 10, 2013.

Bloomberg | Bloomberg | Getty Images

Here are the biggest calls on Wall Street on Thursday:

Deutsche Bank raised its price target on Alphabet to $1,600 from $1,475

Deutsche raised its price target on Alphabet citing more confidence surrounding Google Cloud.

“We think the shares currently discount limited value for Google Cloud given it is losing money, and capitalizing Google Cloud Platform at 15x revenue and G-Suite at 5x revenue on 2022, we see the overall Google Cloud business worth $225B today, just shy of $325/share, up from the $205/ share we used in our August note on mega-cap SOTP valuations. .. .In light of our more confident outlook around Google Cloud, we increase our 12-month target price on Google’s shares to $1,600 (up from $1,475 previously), on slightly higher estimates and rolling out target price multiples to a blend of 2020 and 2021 metrics.”

SunTrust upgraded CrowdStrike to ‘buy’ from ‘hold’

SunTrust said in its upgrade of the cyber security company, that it had delivered “differentiated” intelligent agent technology and that the market was “ripe” for disruption.

“The company has developed a category-defining cloud platform for cybersecurity, a market ripe for disruption. CrowdStrike has delivered differentiated intelligent agent technology, Threat Graph database leveraging sophisticated AI models and behavior analytics, and an expansive set of cloud modules that address a wide variety of security use cases.”

Credit Suisse initiated United Technologies as ‘outperform’

Credit Suisse initiated United Technologies and noted a “significant and durable value” in each of the conglomerate’s business segments.

“We initiate coverage with an Outperform rating as we see significant and durable value in each of UTX’s business segments, value which we believe remains underappreciated by the market. We view UTX’s aerospace businesses as a particularly potent source of strength due to their technologically-enabled competitive moats, the long-term growth potential of their aftermarket revenue streams, and the fundamental power of their end markets.”

JMP Securities downgraded Tesla to ‘market perform’ from ‘market outperform’

JMP downgraded the stock after the company reported lower than expected delivery numbers.

“Tesla’s unit production and delivery data yesterday, although not significantly far off consensus, undershot our higher expectations. More importantly, the delivery data show low single- digit sequential unit growth, and we know of no operational issues that could have prevented TSLA from delivering more vehicles if demand were available.”

Wells Fargo downgraded TD Ameritrade to ‘underperform’ from ‘outperform’

Wells Fargo double downgraded the stock after the company cut its commission rates to zero and said it had a “current worst-in-class” earnings growth profile.

“Organic growth is slowing, interest rates are declining and significant chunks of trading revenue are going away. The only positives we see (other than the possibility of a short-term relief rally for the stocks) are likely expense cuts and stock buybacks, but EPS benefits from those sort of actions don’t deserve a very high multiple, in our view. Our Underperform rating on AMTD reflects its current worst-in-class EPS growth profile, corporate governance missteps (uncertainty in the CEO role) and fewer idiosyncratic drivers of upside relative to peers.”

Buckingham downgraded Delta Airlines to ‘neutral’ from ‘buy’

Buckingham said in its downgrade of Delta that among other things, increased global economic “uncertainty” might lead  to challenged pricing next year.

“With or without a recession, shares are likely to re-rate lower for longer on 4Q cost pressures annualizing into 2020 that imply a consensus outlook that that is too aggressive. Lumpy supply tied to the return of the Max and increasing global economic uncertainty – which is starting to impact business travel volumes – suggest pricing next year is going to be challenged.”


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