Sherwin-Williams and Penn National coverage initiations also among notable calls
Check out today's top analyst calls from around Wall Street, compiled by The Fly.
'INCREMENTALLY' POSITIVE ON SPOTIFY: Credit Suisse analyst Brian Russo upgraded Spotify (SPOT) to Outperform from Neutral with a price target of $315, up from $215. Russo, who raised his 2021 subscriber forecast by 4M, noted he is now above consensus for both MAUs and subscribers in 2020 and 2021. The "Joe Rogan Experience" podcast that becomes exclusive to Spotify in January could drive an incremental 5M subscribers by the end of next year, predicts Russo, who also believes at least 1M of the 60M smartphone users that have been offered free Spotify by Russia mobile carrier MTS are likely to become paying subscribers in 2021.
ULTA TO BENEFIT FROM REOPENING OF ECONOMY: DA Davidson analyst Michael Baker initiated coverage of Ulta Beauty (ULTA) with a Buy rating and $280 price target. While beauty business trends remain challenging, the analyst believes the company should benefit from continued reopening of the economy. Baker added that Ulta Beauty offers opportunity for market share gains from department stores given the struggles of other retailers amid a rebound.
RISING REPAINT DEMAND: KeyBanc analyst Kenneth Zener initiated coverage of Sherwin-Williams (SHW) with an Overweight rating and $805 price target. The company has "near-term support" from rising repaint demand and longer-term support from the rising base of repaint surfaces, market share gains and net pricing power, Zener told investors in a research note. Further, the analyst argued that the Sherwin-Williams share gain story is evident, both in store count, same store sales, and recently do-it-yourself gains at Lowe's (LOW).
MARKET SHARE GAIN: Rosenblatt analyst Bernie McTernan initiated coverage of Penn National (PENN) with a Buy rating and $80 price target, which he noted represents a "Street high" and equates to 45% upside from the stock's closing price on September 8. While he continues to expect DraftKings (DKNG) and FanDuel to be leaders in the online betting space, his base case assumes Penn National is able to gain 15% market share in territories where they launch. McTernan also sees Penn being able to drive online sports betting margins above peers, driven by its Barstool partnership and physical footprint.
BUY EXXON MOBIL: MKM Partners analyst John Gerdes initiated coverage of Exxon Mobil (XOM) with a Buy rating and $55 price target. The company's "immutable" dividend" will likely result in about $15B of additional debt being accumulated in 2021-2022, the analyst told investors in a research note. Gerdes sees Exxon Mobil with $6.9B in negative free cash flow this year assuming the $20.9B in planned CapEx, before the company returning to positive cash flow of about $13.6B in 2021-2022 assuming CapEx reduction to $16B-$17B per year and NYMEX oil rebound to $47.50 and $55 per barrel in the next two years respectively.
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