Top Analyst Upgrades and Downgrades: Chipotle, 3M, Mobileye, Netflix, Seagate, Yahoo and Many More

July 19, 2016 by Jon C. Ogg

The stock market is close to all-time highs again, but stocks were indicated marginally lower on Tuesday morning. The market has moved past the Brexit uncertainty and does not even seem to be concerned about high valuations. Investors keep proving that they will buy their favorite stocks on pullbacks.

24/7 Wall St. reviews dozens of analyst research reports each morning in an effort to find new investing and trading ideas for its readers. Some of these analyst reports cover stocks to buy, while others feature stocks to sell or avoid.

These are the top analyst upgrades, downgrades and initiations seen on Tuesday morning:

Chipotle Mexican Grill Inc. (NYSE: CMG) was raised to Outperform from Underperform at CLSA. Price target data was not available early on Tuesday, but this call is just a couple trading days after Morgan Stanley warned that Chipotle’s troubles could last a few years in its analyst downgrade of the food chain. Chipotle has a 52-week trading range of $384.77 to $758.61, and closed up it 1% at $408.90 on Monday, with a premarket indication up another 1.5% at $415.00 on Tuesday.

3M Co. (NYSE: MMM) was reiterated as Buy at Jefferies, but the standout issue here is that the price target was raised to $210 from $190. Shares closed at $181.11 on Monday, versus a 52-week range of $134.00 to $181.84. The consensus analyst price target was $174.57, but the prior street-high analyst price target was $200.

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Mobileye N.V. (NYSE: MBLY) was started with a Neutral rating and its price target is $55 (versus a $48.48 prior close) at JPMorgan. The 52-week range is $23.57 to $64.48, and the consensus price target is $56.92.

Netflix Inc. (NASDAQ: NFLX) closed at $98.81 on Monday, but its stock was indicated down almost 13% at $86.00 in early Tuesday trading after earnings. The online film and media streaming giant was maintained as Underperform at Jefferies but the price target was cut to $76 from $80 in that call. Mizuho maintained its Neutral rating but cut its target to $90 from $109. Merrill Lynch reiterated its Buy rating and $121 price objective, and Credit Suisse maintained its Outperform rating and $122 target. Netflix has a 52-week range of $79.95 to $133.27.

Seagate Technology PLC (NASDAQ: STX) was raised to Neutral from Sell at Citigroup. Shares closed up 4.3% at $30.15 and were indicated up 0.3% at $30.25 early on Tuesday. The 52-week range is $18.42 to $52.88, but the consensus price target is still currently lower at $26.73.

Yahoo! Inc. (NASDAQ: YHOO) closed up 0.6% at $37.95 on Monday and was indicated down 1% at $37.55 on Tuesday after its earnings report. Yahoo was downgraded to Hold from Buy with a $41 price target (versus a $37.95 close) at Pivotal Research. RBC Capital Markets reiterated its Sector Perform rating and raised its price target to $39 from $38. Merrill Lynch said that its base case, using a 20% discount on Alibaba, suggests $43, but the upside case its $48 price objective.

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Other top analyst upgrades and downgrades were seen as follows:

ARM Holdings PLC (NASDAQ: ARMH) was downgraded to Neutral from Outperform at Credit Suisse, but this is after its high-premium buyout from Softbank. Pacific Crest downgraded ARM to Sector Weight from Overweight as well.

First Data Corp. (NYSE: FDC) was started with an Overweight rating and was given a $15 price target (versus an $11.99 closing price) at Piper Jaffray. The post-IPO trading range is $8.37 to $17.99, and the consensus price target is $15.75.

Government Properties Income Trust (NYSE: GOV) was downgraded to Underperform from Hold with a $17 price target (versus a $24.20 close) at Jefferies. The firm said that its performance in 2016 is not indicative of future returns.

Hyatt Hotels Corp. (NYSE: H) was downgraded to Hold from Buy at Stifel.

IDEX Corp. (NYSE: IEX) was raised to Buy from Neutral at Janney and the fair value estimate was raised to $96 from $87 (versus an $84.45 close) at Janney. The firm sees potential upside, based on commentary that North American industrial markets are showing signs of stabilization.

Monmouth Real Estate Investment Corp. (NYSE: MNR) was started as Buy with a $15 fair value estimate (versus a $13.49 close) at Janney. This implies roughly 16.5% upside, with a 4.8% dividend yield based on a discounted valuation despite an investment grade base of tenants.

Pure Storage Inc. (NYSE: PSTG) was raised to Neutral from Negative with an $11 price target (versus an $11.68 close) at Susquehanna.

Star Bulk Carriers Corp. (NASDAQ: SBLK) was raised to Overweight from Neutral with a $6.50 price target (versus a $3.86 close) at JPMorgan.

Super Micro Computer Inc. (NASDAQ: SMCI) was downgraded to Hold from Buy at Stifel.

VMware Inc. (NYSE: VMW) was reiterated as Buy at Jefferies and the price target was raised to $84 from $83 (versus a $62.57 close). Merrill Lynch maintained its Neutral rating. Its shares were last indicated up almost 8% at $67.50 on Tuesday after earnings.

Monday’s top analyst upgrades and downgrades included Cypress Semiconductor, Groupon, Humana, Infosys, Monster Beverage, Transocean and over a dozen more.

Merrill Lynch is remaining on the sidelines on small-cap stocks as a sector allocation. The firm said that investors should fade the momentum. Since the February lows, small caps have risen by 27%, versus 24% for mid-caps and 19% for large-caps. The firm believes that small caps are now expensive on an absolute basis, but their valuations are attractive relative to mid-caps and large-caps.