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Today's top analyst calls - Sept 21: VZ T TMUS BBWI SDC WMG FSLR

MORE BULLISH ON T-MOBILE THAN VERIZON, AT&T: Loop Capital analyst Stephan Bisson initiated coverage of Verizon ($VZ) with a Hold rating and $57 price target. Verizon has "steadily growing" wireless assets and a "potentially exciting future" with 5G enabling new products such as mobile edge compute and fixed wireless broadband, Bisson told investors in a research note. However, the analyst says the company's current growth isn't fast enough to drive multiple expansion and the upside to numbers from mobile edge compute is difficult to quantify. Bisson thinks investors "will have time to see the products develop before diving in."

The analyst also started coverage of AT&T ($T) with a Hold rating and $30 price target. Once the company's deals are closed, AT&T will essentially be a wireless and wireline communications company with revenue and EBITDA growth trends growing "relatively slowly" at 1.7%-1.8% annually, Bisson told investors in a research note. The analyst's $30 price target is based on a $26 per share value for the remaining company and $4.50 per share value for the 71% equity AT&T shareholders will own of WarnerBros-Discovery.

Meanwhile, Bisson initiated coverage of T-Mobile ($TMUS) with a Buy rating and $160 price target. The analyst believes T-Mobile's competitive position is aided by its industry-leading network, and expects it will produce "continued outperformance in subscriber additions and the financials." Bisson also noted that T-Mobile's network reaches tens of millions more people compared to AT&T and Verizon, adding that T-Mobile's Ultra Capacity 5G has "significantly" more coverage than AT&T or Verizon's comparable options.

BUY BATH & BODY WORKS: Argus analyst Taylor Conrad upgraded Bath & Body Works ($BBWI) to Buy from Hold with a $72 price target. The analyst cited the company's second quarter results rising sharply from year-ago levels along with its reinstated dividend. Conrad also notes that valuation on the stock at 14-times her full year 2023 earnings per share estimate is below the peer average of 19-times. To thrive in the current environment, retailers need to have products that sell easily at brick-and-mortar stores and management teams that can make quick merchandising decisions, and Bath & Body Works fits that criteria, the analyst told investors in a research note.

MARKET SHARE LOSS, GROWTH UNCERTAINTY: Stifel analyst Jonathan Block downgraded SmileDirectClub ($SDC) to Hold from Buy with a price target of $7, down from $9. The stock may be "going to the moon" or "crashing back to earth," but the company appears to be facing more headwinds than tailwinds, the analyst told investors in a research note. Block added that the challenges for SmileDirectClub include market share losses to Direct-to-Consumer players domestically and potentially abroad, with competitive landscape set to intensify further with DENTSPLY SIRONA likely rolling Byte out internationally in 2022. The analyst further stated that he has always questioned the company's aspirations in the Teen market, expecting this initiative to achieve "only modest success" in coming years.

STREAMING GROWTH: Credit Suisse analyst Meghan Durkin upgraded Warner Music Group ($WMG) to Outperform from Neutral with a price target of $48, up from $37. Warner is well positioned as one of the top three music labels globally, benefiting from the global transition to on demand music streaming, Durkin told investors in a research note. The analyst sees further upside in the stock as its growth outlook, margin profile and valuation "become clarified." Durkin also sees "healthy" ongoing streaming growth at Warner Music's Recorded Music segment through fiscal 2025, including mid-teens growth from paid subscriptions and advertising supported streaming platforms. At the same time, new revenue should "continue to layer on" from new partners in social, gaming and fitness industries, the analyst added.

ON THE SIDELINES: KeyBanc analyst Sophie Karp initiated coverage of First Solar ($FSLR) with a Sector Weight rating. First Solar, as the largest U.S.-based solar manufacturer with the non-silicon-based product, is uniquely positioned to benefit from the unfolding policy initiatives favoring domestic content and creating barriers for imports, Karp told investors in a research note. At the same time, Karp feels First Solar is unlikely to benefit from the near-term price increases as its order book for 2021-2022 has been locked in for some time and the stock is trading at the upper and of its historical range.


Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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