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Here are the biggest analyst calls of the day: Pinterest, US Steel, Mylan & more

Michael Bloom
  • UBS downgraded U.S. Steel to sell from neutral
  • Rosenblatt Securities initiated Pinterest as neutral
  • Wells Fargo downgraded Mylan to market perform from outperform
  • Wedbush upgraded LendingClub to outperform from neutral
  • J.P. Morgan upgraded Mosaic to overweight from neutral


Here are the biggest calls on Wall Street on Wednesday

UBS downgraded U.S. Steel to 'sell' from 'neutral'

UBS said it sees market share losses in the coming years.

"We downgrade US Steel X to Sell from Neutral as we estimate near-term capital investment will not reverse market share losses in the coming years. Geospatial analysis conducted by UBS Evidence Lab shows planned capacity additions will result in 2.6% more domestic market coverage for electric arc furnace (EAF) producers versus 2.5% less for blast furnace (BOF) producers by 2022 (see UBS Evidence Lab inside: Is this the End Game?). We are reducing our 2019-2021 EBITDA estimates by 31% and raising our capex estimates by 94% on average. X is investing significantly in its asset base to remain competitive, but the result is negative free cash flow over three years (2019-2021 UBSe). We think the investment may only modestly reduce costs, and markets for new products may not be proven. We estimate X is pricing in EBITDA of US$94/st versus our US$82/st estimate and a US$64/st five-year average."

Rosenblatt Securities initiated Pinterest as 'neutral'

Rosenblatt initiated Pinterest PINS and said the digital ad marketplace is very competitive.

"We initiate PINS PINS with a Neutral rating and $32 DCF-based price target, reflecting ~11% upside from last night's closing price. While we find Pinterest's visual discovery platform truly unique and its mid-to-low funnel return prospects for advertisers promising, we also acknowledge an incredibly competitive digital ad marketplace and daily time spent on social platforms nearly maxed out. With that said, our forecast reflects reasonably aggressive assumptions for both MAU and ARPU growth, particularly in the US, where competition is most fierce. Further, while the depressed margin profile for a relatively mature (yet still young) company appears ready to be levered, we hesitate to compare its potential just yet relative to more mature and dominant ad platforms."

Wells Fargo downgraded Mylan to 'market perform' from 'outperform'

Wells Fargo downgraded Mylan MYL , saying the drugmaker was performing "below expectations."

"We are downgrading shares to Market Perform as the company continues to perform below our expectations. We believe the ~20% decline today (vs. the S&P500 -1.9%) reflects the negative earnings report today and with this type of decline, some speculation previously made in the press about a potential sale to private equity may re-emerge. However, we have decided to return to our core belief that the risks outweigh the valuation especially what we consider EPS uncertainty."

Wedbush upgraded LendingClub to 'outperform' from 'neutral'

Wedbush upgraded the peer-to-peer lending company after the company's positive earnings report.

"Reflecting significant gains across all fronts over the last 3 years, LC LC now operates with a more complex, more diversified source of loan buying/funding, a tighter focus around its primary credit niche (at-prime to super-prime), and a focus on operating efficiency that has it within eye sight of generating an adjusted EBITDA margin of 20% by the end of 2019. We think adjusted EBTIDA margins will continue to grow and that the business will succeed at growing revenue at 12-15% for a sustainable period per year. We are increasing our price target from $3.75 to $5.00 and upgrading the shares from NEUTRAL to OUTPERFORM."

J.P. Morgan upgraded Mosaic to 'overweight' from 'neutral'

J.P. Morgan said Mosaic MOS , which mines phosphate and potash, is making the right moves over the long-term to create shareholder value.

"Mosaic MOS has been a poor equity performer over a one, three, five, and ten year period, and we think the shares are now priced to create a favorable risk/reward balance. Mosaic has underperformed the market by (18%) over a one-year period, by (41%) over three years, by (104%) over five years, and by (258%) over ten years. The sources of the underperformance have been acquisition missteps, water-inflows into its largest potash mine, low-returns on phosphate equity investments, the underperformance of a collection of higher-cost assets, and a weak agricultural cycle. Mosaic's approach to value creation is now simpler, and its 2019 performance is probably anomalously low, which we think creates a positive trading opportunity."




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