Uber Technologies CEO Dara Khosrowshahi and co-founder Garrett Camp take a selfie photograph on the trading floor of the New York Stock Exchange during the company’s IPO in May 10, 2019.
Brendan McDermid | Reuters
Here are the biggest calls on Wall Street on Friday:
Atlantic Equities upgraded Uber to ‘overweight’ from ‘neutral’
Atlantic Equities upgraded the stock mostly on valuation after the company’s earnings report.
“We are upgrading Uber to Overweight from Neutral due to an increasingly benign competitive environment in ridehailing and more attractive stock valuation. We expect the improving ridehailing competitive landscape to drive accelerating revenue growth and moderating segment losses in that business across FY19, while a new Eats fee structure should augment food delivery unit economics while still enabling rapid gross bookings growth. Meanwhile, the stock is now on less than 0.7x FY20 EV/gross bookings, which we view as too low for the clear market leader in transportation as a service. “
Piper Jaffray upgraded Kraft Heinz to ‘neutral’ from ‘underweight’
Piper Jaffray said that many of the risks for the company appear to be “priced in.”
“We remain cautious on the outlook for KHC and its ability to build or maintain brand equity in a way that can drive sustainable organic growth, especially given its $15B write-down on its key Kraft and Oscar Mayer brands. We believe a new CEO is the right move, but also believe he needs incremental brand spending to rejuvenate KHC’s dusty brands, which could weigh on EPS by another $0.15-0.20 (not yet in our model). Divestitures are also likely dilutive, perhaps by $0.20-0.30. However, at 9x our 2020E EPS, risks appear to be reflected in valuation. We maintain our $31 target but raise our rating from UW to Neutral. “
Goldman Sachs upgraded Canada Goose to ‘buy’ from ‘neutral’
Goldman said Canada Goose is now a “show me” story after the company’s earnings report.
“GOOS reported F4Q results on 5/29 and the stock traded off 31% vs. S&P500 -1%. The key focal point for investors was Direct-to-Consumer sales growth, which slowed from the elevated growth rates experienced earlier in the year, and missed consensus estimates, driving the first consolidated revenue miss since GOOS went public. We think it is appropriate for a high multiple stock to experience significant de-rating in response to a sales miss. “
Deutsche Bank downgraded J. Jill to ‘hold’ from ‘buy’
Deutsche Bank downgraded the retailer after the company’s guidance reduction.
“We are downgrading shares of JILL to Hold from Buy (PT goes to $2) given product assortment issues that have led to conversion challenges, declining sales, and heavy inventory levels requiring significant markdowns. “
Bank of America downgraded Nucor to ‘underperform’ from ‘buy’
Bank of America downgraded the steel maker on a “souring” price outlook.
“We downgrade Nucor to Underperform from Buy as part of a sweeping review of U.S. steel names, now incorporating: 1) lower near-term prices especially for sheet and rebar; 2) new lower 2021E-2022E forecasts to incorporate our Steelmageddon™ looming glut theme; and 3) a DCF analysis that factors in this three-year cautious stance but an assumed recovery afterward. “