9:09 am Top Pre-Market Analyst Actions
- Travelers (TRV) was upgraded to Buy from Neutral at BofA/Merrill owing to the company's US exposure. While many firm have been touting UK exposure as reasoning for downgrades in the wake of the UK referendum vote, BofA/Merrill this morning flips the switch, calling on the company's domestic business as reasoning for their bullish view.
- A near +1.2% start this morning has TRV back on the winning side of things as the stock has been relatively weak since YTD highs in early-April, down nearly -6.7% since that time
- Tesla Motors (TSLA) was downgraded to Hold from Buy at Argus based on the company's recent bid for SolarCity (SCTY). Firm thinks the deal adds a new level of risk at a time when TSLA is still struggling to be profitable.
- Despite the morning downgrade, TSLA is slated for a +1.4% open; shares are down nearly -13.9% YTD and -26.3% off early-April highs
- L Brands (LB) was downgraded to Underperform from Neutral at BofA/Merrill due to weakening comps, Victoria's Secret challenges and increased popularity of the bralette.
- LB is getting slammed in 2016, losing nearly -31% since the start of the year; the retail space has been pressured this year, especially recently, taking LB -1.2% this morning in the wake of the downgrade
- VBL Therapeutics (VBLT) was initiated with a Buy at H.C. Wainwright owing to the company's upcoming GLOBE study milestone, and the arrival of the Phase 2 thyroid cancer, initiation of the Phase 2b study in ovarian caner and interim analysis of the GLOBE study as driving catalysts.
- This thinly traded healthcare name is prepping for a strong open this morning, +9.4%, on light volume; the stock has fallen off highs of the year from earlier this month, down nearly -47.9% since that time
Briefing.com note: This is a select subset of all of the morning's analyst actions, which can be seen on our Upgrades/Downgrades Calendar here
9:08 am ComScore downgraded to Market Perform at Telsey Advisory Group; tgt lowered to $35
Telsey Advisory Group downgrades SCOR to Market Perform from Outperform and lowers their tgt to $35 from $60. Firm noted this morning, co filed an 8-K indicating that it was not in a position to file its FY15 10-K and 1Q10-Q. While they did not expect co to actually file earnings reports, firm had expected more of an "informed update". In its 8-K, co stated that its Audit committee had completed a substantial amount of its "factual inquiries" but that it needed more time reach a final conclusion. As a result firm is downgrading the stock. Their take on the 8-K is that co is farther away from resolving its accounting issues than they had expected. Firm's concern is that any revisions to its financial statements do not reflect just reductions in Non-Monetary Revenue (NMR), but lower Stock-based Comp (SBC) and dis-synergies with the integration of Rentrak's operations.
9:08 am EnLink Midstream upgraded to Neutral at Robert W. Baird; tgt raised to $16
Robert W. Baird upgrades ENLC to Neutral from Underperform and raises their tgt to $16 from $8. After two key upstream deal announcements this month, firm believes ENLK's 2016 volumes and cash flows will shift to the higher end of its full-year guidance, predicated on additional producer capital flowing to ENLK's STACK and Permian footprint. They switch from "bear case" to "base case" valuation metrics, which drives their ENLK target price to $20/unit and their ENLC target price to $16/unit. They upgrade ENLC from Underperform to Neutral and reiterate Outperform rating on ENLK.
9:08 am Credit Suisse downgraded to Sector Perform at RBC Capital Mkts
RBC Capital Mkts downgrades CS to Sector Perform from Outperform as firm has pushed expectations of an ROTE above the COE further out. The Non Investment Bank at CHF10ps (previously CHF13ps) is the bulk of the share price but a low return from the IB (net of Non-Core) of 2% means we see more limited upside. Meeting capital targets is dependent on the Swiss IPO, which it is unlikely to get credit for near term. PT to CHF12 (from CHF18).
9:08 am Olin upgraded to Outperform at Cowen; tgt raised to $31
Cowen upgrades OLN to Outperform from Market Perform and raises their tgt to $31 from $18 and raising their 2017 EBITDA est above consensus for two reasons. First, the integration risks of the OLN/DOW transaction have diminished. Second, firm believes the synergy mechanisms are underappreciated and may be more valuable than currently assumed bringing earnings power to the shares beyond more caustic soda and higher caustic soda prices.
9:07 am NexPoint Residential initiated with a Buy at Canaccord Genuity; tgt $20
Canaccord Genuity initiates NXRT with a Buy and price target of $20 as they believe co will experience outsized NOI and FFO growth over the near and medium terms and drive NAV materially higher through a value-creating renovation strategy. Exposure to B-quality assets in Southeastern and Southwestern markets further insulates NXRT from supply growth and rent/ income ratios approaching maximum levels. Firm expects multifamily investors to continue to rotate out of major urban gateway market exposure into the traditionally more defensive "middle America" markets, which favors NXRT. However, in addition to that benefit, firm believes co also has outsized growth and the stock still trades at an 18% discount to firm's current NAV est. In firm's view, not only does NXRT have the right strategy, but it operates in the right markets at this stage in the cycle and trades at the right valuation to see material upside. The stock is up 35% YTD, and while it could take a ST breather, firm sees another 13% upside through year-end, making NXRT our top multifamily pick.
- Security Upgrades & Downgrades