Here are the biggest calls on Wall Street on Friday:
Bank of America said Ford is starting to hit a more “sustainable inflection in earnings.”
“We are upgrading our investment rating on Ford from Neutral to Buy, which is predicated on our view that Ford is just starting to hit a more sustainable inflection in earnings (even more so in 2020), driven by the combination of a favorable product cadence in the all-important US/NA market and restructuring efforts with its Global Redesign. In the face of a tough cycle/macro, we believe this self-help turnaround story will start to get more credit among the investment community, and that improved execution and communication may allow Ford’s multiple to recover over time. Along with our upgrade, we are raising our forward estimates, as well as our PO from $13 to $14.”
Read more about this call here.
Nomura said it sees a path to profitability in the “near-to-medium term.”
“Pinterest‘s user base and revenue are growing faster than any company in our coverage. Its domestic user base (MAUs), while already 25% greater than Twitter’s, will likely continue to improve, and we expect international MAU growth to ramp at a more significant pace. To analyze and evaluate the company, we use Twitter as our guide and reference; PINS’ per-visit engagement is on par with Instagram’s.”
Longbow thinks that Whirlpool will see “above consensus” earnings.
“We are upgrading the shares on the expectation that WHR can generate above consensus earnings – upside is from a combination of (a) price/cost-driven NA margin performance, (b) a gradually improving situation in EMEA, (c) a favorable cyclical turn in LA, and (d) a shareholder-friendly capital allocation plan. We believe these drivers can remain in force through 2019 and into early 2020.”
“The magnitude of the sell-off/underperformance in managed care and the broader services sector on fears of Medicare for All has been extreme and overdone, in our opinion. While we have had our reservations on the MCOs, we see risk/reward as more favorable today, and don’t subscribe to the view of a continued “overhang” and “uncertainty.” Instead we see some continued recovery as more realistic views prevail and investors become more numb to the low-likelihood headlines and political rhetoric of single payor, on top of fundamentals that remain generally stable at now steeply discounted valuation. We are upgrading ANTM, CNC and UNH to Buy (from Neutral) and maintain our Buy rating on CI and HUM.”
B. Riley said that Yelp‘s pricing visibility is “declining.”
“Reasons for our Downgrade. 1) Effective Cost per click (CPC) declined 8% as more traffic was sent to advertisers thereby increasing their ROI. Since CPC is an output, we are not sure at what volume it can stabilize and until then it will continue to drop providing headwinds; 2) We had high hopes for RAQ and expected a V2.0 to be a key driver. The new version has not launched and we are seeing the second straight quarter of stagnant to declining Q/Q annualized revenue due to lower CPC; 3) With RAQ not a growth driver anymore, Home & Local ex-RAQ grew slower than Local advertising; 4) New products released so far are small and not consequential to reduce churn or drive revenue, in our opinion. As a result, we are reducing our estimates to the lower end of guidance for FY19. We lowered our FY19/FY20 revenue estimates by -2%/-8% and AEBITDA from $235.0M/$280.3M to $220.0M/$250.0M.”