Here are the biggest analyst calls of the day: Macy’s, Chipotle, Beyond Meat, Caterpillar & more

“We see increasing downside risks to CAT‘s Construction and Energy & Transportation segments. Resources segment and share repurchases continue to support EPS, but are unable to fully offset these headwinds. We now see negative EPS growth in FY20, 10% upside to our PT, and a balanced risk reward.”

“WM has outperformed the group YTD in part due to the pending ADSW acquisition. We view management’s bull-case 7-9% EBITDA/FCF growth outlook for 2019-2021 as comfortably achievable with the addition of ADSW, which presents an attractive relative valuation on combined company estimates. That said, we are moving to SW on WM as we look for greater visibility on the next catalyst that will drive relative outperformance at current levels.”

“We are initiating coverage of the diversified managed care group including UNH (Buy, Price Target $270), HUM (Buy, Price Target $316), CI (Buy, Price Target $180) and ANTM (Neutral, Price Target $262). Although political rhetoric will likely create increased volatility in the group leading up to the 2020 Presidential election, our ratings are based on the fundamental outlook for the industry, which we view as positive.”

“Our investment thesis in Stitch Fix rests on what we see as two characteristics that support its valuation: 1) it is an apparel retailer that has shown considerable topline growth potential; and, 2) it is a technology company that has consistently generated positive free cash flow. Therefore, we see the potential for a business that can self-fund growth in a category that remains open to disruption.”

“We have been negative as we thought the rate of cigarette declines cast doubt on the long-term outlook. However, we now expect less bad volumes next year as we think (1) e-vapor usage will fall due to the negative publicity around vaping and the imminent flavor ban, and (2) this will help cigarettes. The stock is below our target and we think it no longer looks expensive relative to overseas peers. Unfortunately we expect the short-term newsflow (on FDA regulation and earnings) to be difficult.”

“In our view, DPZ‘s outlook has been meaningfully de-risked after last week’s updated 2- to 3-year guidance, which included lowering the domestic SSS range by 100bps as well as announcing F3Q19’s 2.4% domestic SSS, its lowest in 7 years. We see several drivers of upside to consensus’s 2020 estimates and are raising our price target to $310, up from$280 prior, as we anticipate investor sentiment to improve into 2020.”

“The US Softlines Retailer group (incl M/JWN/KSS/JCP/GPS/LB among others) is now trading at a -3% discount to its 5-yr avg EV/EBITDA (vs. a +3% premium to the 5-yr avg one year ago today)—adding some margin of safety for Softlines stocks. That said, the negative NT industry data points are adding up. As we look across our coverage, we see the most risk of negative revisions to 2020 Street ests for Macy’s, GPS and LB—and we think low valuation alone won’t be sufficient to protect further stock downside.”

“Based on: 1) Stock has sold off recently despite solid industry ad spend checks, 2) Ongoing Discover content rollout (8 new shows this fall) gives us higher conviction on realizing potential Snap ARPU expansion, 3) the secular tailwind from OTT traction taking linear TV time, benefitting Online video ad spend, 4) 4Q expected to be Snap’s first positive EBITDA quarter, changing the narrative, and 5) recent public CEO comments suggest better appreciation of need for stock performance.”

“We are moving to Neutral on Chipotle and raise FY19 adj. EPS to $13.70 (from $12.70) and FY20 to $17.15 (from $15.50) on a stronger comp and margin outlook. While we still struggle with the valuation upside, our expectations that CMG will deliver near-term EPS upside to consensus makes a correction in the multiple unlikely, driving our decision to move to Neutral.”

“Since transferring coverage, we’ve viewed RCL as best in class, further solidified by the positive momentum in Asia – something that has eluded peers. Results could be messy, but Dorian is a one-time, and adv. booking sentiment remains strong aside from Dorian, and at a current near-trough PE multiple, we see substantially more upside than downside, even if leverage is higher than peers’.”

“We continue to expect significant growth in the plant-based meat category and expect there to be upside to management’s FY19 sales guidance. Specifically, management expected sales to exceed $240m in FY19, which could be conservative as it does not include the incremental revenue from potential new foodservice and retail partnerships, like Dunkin Donuts, McDonalds and HelloFresh.”