Top Analyst Upgrades and Downgrades: IBM, Lennar, Regions, Shake Shack, Shopify, TerraForm, McDonald's and Many More
Stocks tanked on Friday but were indicated sharply higher on Tuesday after the three-day weekend and after China’s gross domestic product met expectations. While investors may feel that every rally has been a sucker’s bet in 2016, the reality is that investors have bought every market pullback for over four years. 24/7 Wall St. reviews dozens of analyst reports each morning of the week. The aim is to find new investing and trading ideas. Some analyst reports cover stocks to buy, while other reports cover stocks to sell or avoid.
We recently ran a downside projection using the most bearish analyst targets on Wall Street, and that indicated a Dow of 15,076 for a potential floor, versus a bullish case at the start of 2016 for Dow 19,700.
These are this Tuesday’s top analyst calls.
International Business Machines Corp. (NYSE: IBM) was reiterated as Underperform at Jefferies, and the price target was cut to $110.00 from $125.00. What stands out here is that Jefferies now has the most negative price target, even lower than the prior $125 target Credit Suisse has on IBM. This is far lower than the bullish and bearish outlook for IBM in 2016.
Lennar Corp. (NYSE: LEN) was raised to Buy from Neutral with a $52.00 price target (versus a $40.91 prior close) at Sterne Agee CRT. Lennar’s consensus price target is $54.43 and its 52-week trading range is $39.52 to $56.04.
McDonald’s Corp. (NYSE: MCD) was raised to Buy from Neutral with a $130 price target (versus a $115.18 close) at BTIG. The firm talked up all-day breakfast and returns of capital. McDonald’s has a consensus price target of $120.65 and a 52-week range of $87.50 to $120.23.
Regions Financial Corp. (NYSE: RF) was raised to Overweight from Neutral with an $11 price target (versus an $8.20 close) at Piper Jaffray. Regions was also reiterated as Buy with a $10.00 fair value estimate at Janney Capital Markets.
Shake Shack Inc. (NYSE: SHAK) was raised to Outperform from Market Perform at William Blair, noting that its premium has come more in line with peers if you consider its growth rate. Shake Shack closed at $32.07 and was indicated up 6% at $34.00 or so on the call. Still, Shake Shack trades at 82 times consensus 2016 earnings estimates.
Shopify Inc. (NYSE: SHOP) was raised to Overweight from Equal Weight at Morgan Stanley. Shares closed at $19.89, with a consensus analyst target of $35.83 and a post-IPO range of $17.00 to $42.13.
TerraForm Power Inc. (NASDAQ: TERP) was downgraded to Neutral from Buy with an $11.00 price objective (versus a $9.41 close) at Bank of America Merrill Lynch. The firm sees TerraForm in a runoff valuation range of $9 to $12 with reasonable discount rates and positive outcomes to the pending Vivint transaction.
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Other key analyst upgrades and downgrades from this Tuesday were in shares of the following companies: