Apple, Netflix, Disney, Ralph Lauren & more

Robert Iger, Chief Executive Officer of Disney, poses in “Star Wars: Galaxy’s Edge” during a media preview event at Disneyland Park in Anaheim, California, May 29, 2019.

Mario Anzuoni | Reuters

Here are the biggest calls on Wall Street on Tuesday:

RBC raised its price target on Alphabet to $1,500 from $1,425

RBC raised its price target and said it was bullish on the company’s Google Maps segment.

“We reiterate our Outperform rating on GOOGL in the wake of our deep-dive analysis on Google Maps. We first wrote about Google Maps in 2013 and believe it remains one of the greatest under/un- monetized 1B+ user ‘Net platforms {along with  WhatsApp). In this report, we detail a series of product changes we have tracked at Google Maps and analyze a series of growing monetization opportunities.”

Pivotal lowered its price target on Netflix to $350 from $515

Pivotal said even though it was remaining long term bullish, it was lowering its target price on Netflix on growing competition among other things.

“In the end we remain long term bulls on the NFLX story and still think they win the global OTT race and ultimately generate substantial profitability. Our new forecasts imply they are going to respond to content cost acceleration by revving up their own content spend that will allow them to maintain their subscriber growth while pushing back profitability materially. In the end our view is that very few players can (or will) keep up with these spend levels and that ultimately this will be a 2-horse race (NFLX and Disney) where both horses can win, with Amazon on the periphery and there is a reasonable shot that AT&T will screw up HBO as a competitor.”

Wells Fargo initiated Disney as ‘outperform’

Wells Fargo called the company a top pick and said Disney was in “rarified air” as it appeals to consumers of all ages.

DIS is arguably not just a Media company, but a unique global consumer brand leader. Its DTC business is second in value only to NFLX. It’s $116bn Park & Consumer business is a large cap in and of itself. Studio is arguably the biggest and best in the world, now even bigger with 20th Century Fox. Media Nets aren’t growthy, but they’re cash annuities, and we apply an academically consistent 6x EV/EBITDA multiple on ESPN, given our bearish sports view. We see Disney as being in the rarified air of appealing to consumers of all ages and generations across continents and product offerings.”

Guggenheim upgraded Snap to ‘buy’ from ‘neutral’

Guggenheim said its upgrade reflected “strong” usage trends among other things for the social media company.

“We believe SNAP is well positioned to outperform our Internet and Media coverage universe through year end and provide an investor return of nearly 30% over the next 12 months. The combination of strong usage trends, industry-leading access to 18-34 year-old users and platform improvements should drive growth in advertiser demand. We see long-term revenue potential at SNAP as the most under-appreciated in our universe which should support a sustained premium valuation multiple.”

Goldman Sachs upgraded Wynn to ‘buy’ from ‘neutral’

Goldman Sachs said its upgrade of Wynn reflects a “stabilizing” of gross gaming revenue.

“From a stock perspective, we upgrade WYNN to Buy and raise our price targets across our gaming coverage exposed to Macau to reflect stabilizing gross gaming revenue $/day, improving second derivative of key leading indicators (net credit impulse & OECD leading indicator), and economic stimulus in the region. With fundamentals poised to inflect positively at the same time both valuation and estimates have come in, we believe the space is set for outperformance.”

Jefferies upgraded Apple to ‘buy’ from ‘hold’

After a change of analyst, Jefferies upgraded the stock and said that Wall Street is underestimating 5G’s impact.

“Given the advanced technology and components involved, 5G devices will be high-end. Our analysis of market share by price level shows Apple‘s share increases as prices go higher. We think the Street underestimates the benefit Apple gets from this heading into the 5G cycle. Street expectations call for 190m units for the FY’21 5G iPhone cycle, or 9% below the 6-year average unit volume for iPhone.”

Read more about this call here.

Atlantic Equities upgraded Ralph Lauren to ‘overweight’ from ‘neutral’

Atlantic Equities upgraded the stock and said Ralph Lauren‘s valuation is at a level last seen during the 2009 recession despite the improved performance of the apparel maker.

“The market is pricing in a risk to earnings and a near-term recession, but we believe management has a number of levers to allow performance to hold up well even in a slowdown. The turnaround has thus far been successful in improving the distribution network and the supply chain, with current investments focused on elevating the brand and reestablishing the core classic positioning. We see current valuation as a good opportunity to buy into a high quality brand.”

Oppenheimer downgraded Blackstone to ‘perform’ from ‘outperform’

Oppenheimer downgraded the financial services company mainly on valuation.

“We have steadily been recommending purchase of BX shares for the past four years because we thought that the company had the best business model in financial services, and perhaps one of the best in any industry, but was chronically undervalued. We still feel the same way about the business model, but the stock is up 79% YTD vs. up 18% YTD for the S&P 500 and has reached our price objective, and we cannot help but want to take a pause after such a move.”

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