Here are the biggest analyst calls of the day: Beyond Meat, Bank of America, Kellogg & more


Beyond Meat CEO Ethan Brown speaks before ringing the opening bell at Nasdaq MarketSite, May 2, 2019 in New York City.

Drew Angerer | Getty Images

Here are the biggest calls on Wall Street on Friday:

D.A. Davidson initiating Beyond Meat as ‘underperform’

D.A. Davidson said its view does not reflect a negative view of the company or its ability to execute, but rather the size of the total addressable market and the number of frequent purchasers.

“We think Beyond Meat has achieved a significant breakthrough which legitimizes a nascent segment (plant based meat) within a $1.4T category; our thesis does not reflect a negative view of the company, the quality of its portfolio, or its ability to execute. Rather, our cautious approach to the total addressable market—specifically, fewer likely frequent purchasers of plant based meat as compared to milk given roughly half the number of non meat eaters versus lactose intolerant—informs long term forecasts we believe are lower than the consensus view.”

Read more about this here.

KBW downgraded Bank of America to ‘market perform’ from ‘outperform’

KBW downgraded the stock on the escalation of the trade war impacting economic growth, as well as prospects for further Fed rate cuts.

“We recently upgraded shares of Bank of America as we had expected economic conditions to improve. However, post the Fed’s rate cut we got an escalation of the trade war which is now expected to lower economic growth and we now forecast further rate cuts from here which will pressure BAC earnings. Our updated estimates based on KBW’s Economic Baseline are below consensus and in a falling rate environment where the yield curve remains inverted, we believe that creates an environment where it will be difficult for shares to outperform and a Market Perform is appropriate.”

Read more about this call here.

Berenberg initiated Delta & American Airlines as ‘buy’

Berenberg said that it expected American and Delta, would be able to generate free cash flow “in a range of scenarios.”

“We initiate amid market worries over both capacity growth and demand weakness. In this environment of fear, our work suggests that US airlines can generate free cash flow in a range of scenarios, particularly for our Buy-rated stocks. We think there is selective opportunity in the sector on our outlook for pre-tax 2020 margin expansion amid pricing concerns from above-trend capacity growth.”

Goldman Sachs upgraded Kellogg to ‘buy’ from ‘neutral’

 Goldman predicted Kellogg would see accelerating organic sales and improved profit margins in its upgrade of the stock.

“We also raise our target price to $72 (from $58), which implies 14% upside to shares from current levels. A number of changes have occurred at the company in recent years that we believe will sustain a faster growth trend at K than the company has been able to historically achieve; primarily a strategic pivot to snacks (vs. its legacy cereal-first approach) and completed M&A (albeit at lofty valuations) which has bolstered its EM exposure.”

Goldman Sachs downgraded Conagra to ‘neutral’ from ‘buy’

Goldman said that consensus estimates for earnings and sales are “too high” in the near term.

“We downgrade CAG to Neutral from Buy as we lower our estimates and price target on fresh analysis of its portfolio. While we continue to see a path to outsized synergy and deleverage-fueled EPS growth for the company over the next three years, we believe both management and FactSet consensus estimates for sales and earnings may be too high in the near term. This near-term risk balances our longer-term optimism and causes us to step to the sidelines for now.”

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