Good morning. Here’s your daily equity research roundup from the Street.
- Best Buy (BBY): Citi analyst Kate McShane is upgrading BBY to Neutral from Sell, citing better risk verse reward after the stock pulled back some 35 per cent over the last few months. Given current “trough valuations” and a “compelling free cash flow profile,” McShane sees limited risk to the downside from here. She also notes that “the departure of Chairman/Founder Dick Schulze increases headline risk around BBY screening well as a potential LBO target.”
- JPMorgan Chase (JPM): Analyst Marty Mosby likes what he saw yesterday at JPM CEO Jamie Dimon’s testimony in front of the Senate Banking Committee. He says there are three catalysts that could get JPM back to a healthy premium to tangible book after the selloff resulting from their announced trading loss: 1) guidance on decreased exposure to the trade, 2) a renewed share repurchase program, and 3) restored confidence in long term earnings prospects.
- Zynga (ZNGA): Analysts Scott Devitt and John Egbert are reiterating their Overweight rating on ZNGA but are lowering their price target on the stock to $13.00 from $15.00, citing only “potential risks.” However, with regard to the Overweight rating, they write that risk versus reward on the stock is much better at these levels than before after shares have fallen “to ~50% of their value at IPO due to lock-up expirations, sector weakness, and misperceptions about DAU declines hurting bookings.”
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