Here are Monday’s biggest analyst calls of the day: Apple, Costco, Disney, Deere & more
- Jefferies initiating Moderna as buy.
- Atlantic Equities initiated Costco as overweight.
- Baird upgraded Deere to outperform from neutral.
- Goldman Sachs initiated Disney as buy.
- Morgan Stanley raised its price target on Apple to $419 from $340.
- Wedbush raised its price target on Apple to $450 from $425.
Pro Subscribers can read more here. — Michael Bloom
Big Tech higher
Shares of Netflix rose 3% during premarket trading, while Amazon and Alphabet were each more than 1% higher, putting the three stocks on track to open at record high levels. All three closed at record highs on Friday, as investors continue to favor Big Tech. Gains in these stocks and others have pushed the tech-heavy Nasdaq to a new all-time high, and an 18% gain for the year. The Dow and S&P 500, meanwhile, are still in the red for 2020. – Pippa Stevens
Bank of America raising price target on Netflix ahead of earnings
Bank of America raised its price target on Netflix to $625 from $525 on Monday morning and said it expects the “demand surge to hold” in the second quarter. “We view stable churn as a positive sign, which suggests the surge in demand from US lockdowns/social distancing has not yet been followed by a wave of en-masse cancellations,” analyst Nat Schindler said. The firm also re-iterated its buy rating on the stock ahead of the company’s earnings report on Thursday. Shares of Netflix are up 20% this month. – Michael Bloom
There’s further upside in stocks after this consolidation phase, Canaccord says
Canaccord’s chief U.S. equity strategist, Tony Dwyer, said in a note that stocks have been in a consolidation phase since early June as most of the upside since then comes from the mega-cap tech names. However, he still believes there is further upside in stocks once this consolidation phase concludes. “Historic levels of credit and liquidity, coupled with the turn in the global economy, should cause any periods of consolidation to be resolved to the upside – even with weak Q2/20 EPS reports and cautious comments from management teams,” Dwyer said. “We are in unprecedented times with substantial health, economic, social, and political unknowns … but the majority of our data continues to point to intermediate- to long-term opportunity in the economic reopening theme as we move into 2021.” —Fred Imbert, Michael Bloom
Disney jumps on Goldman’s buy rating
Shares of Disney rose more than 1% in premarket trading on Monday after Goldman Sachs initiated coverage of the media giant with a buy rating. The Wall Street firm slapped a $137 per share price target on the stock, a more than 14% rally from its current level. Goldman is betting Disney’s streaming service Disney+ will gain more subscribers and become more profitable than analysts expect. “We believe the market is undervaluing its DTC segment by >50%, based on our outlook for Disney+ reach to 150mn subs by 2025 and to achieve proﬁtability by F2021 (consensus F2023),” a Goldman Sachs analyst told clients. Goldman also expects Disney’s theme park business to return to normal following the pandemic. — Maggie Fitzgerald
Tesla shares up 7% in premarket trading
Tesla shares gained nearly 7% during premarket trading on Monday after the automaker said it will cut the starting price of its Model Y SUV by $3,000. The move follows price cuts for the company’s Model 3, Model X and Model S. Shares of the Elon Musk-led company have gained more than 250% this year, pushing the electric vehicle maker’s market value to $286 billion. The stock was set to open at an all-time high on Monday, after closing at a record during Friday’s trading session. – Pippa Stevens
Analog Devices buying Maxim Integrated in a deal worth nearly $21 billion
Semiconductor company Analog Devices said Monday that it will acquire Maxim Integrated for $20.91 billion in stock. In the deal, which is expected to close next summer, Analog Shareholders will own 69% of the combined company, with Maxim shareholders holding the rest. Shares of Analog Devices jumped more than 2% during premarket trading on Monday, while Maxim was up 19%. – Pippa Stevens
Coronavirus vaccines get ‘fast track’ status from FDA
Shares of Pfizer jumped around 3% during premarket trading on Monday while BioNTech shares gained 8% after the companies were granted “fast track” status by the FDA for their work on potential Covid-19 vaccines. “The FDA’s decision to grant these two COVID-19 vaccine candidates Fast Track designation signifies an important milestone in the efforts to develop a safe and effective vaccine against SARS-CoV-2,” said Peter Honig, Senior Vice President of Global Regulatory Affairs at Pfizer, in a statement. “We look forward to continue working closely with the FDA throughout the clinical development of this program, Project Lightspeed, to evaluate the safety and efficacy of these vaccine candidates.” – Pippa Stevens
Futures higher despite record increase in Covid-19 cases
Stock index futures rose on Monday despite a record jump in Covid-19 cases over the weekend. Futures on the Dow Jones Industrial Average gained 223 points, or 0.8%. The move implied an increase of 244 points at Monday’s open. S&P 500 futures and Nasdaq-100 futures each rose about 1%. The move higher comes even as Florida reported 15,299 new cases on Sunday, the highest single-day total for a U.S. state. The Dow and the S&P 500 are coming off their second straight week of gains, while the Nasdaq Composite is coming off its third consecutive higher week. The tech-heavy index closed at a record high on Friday, fueled by gains in names including Amazon, Apple, Netflix and Alphabet. – Pippa Stevens