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Today's top analyst calls - June 24: PYPL STX AAPL AMZN WMT MGM

MGM A BUY: Deutsche Bank analyst Carlo Santarelli upgraded MGM Resorts ($MGM) to Buy from Hold with a price target of $54, up from $42. The "next leg of the stock story" is likely to be improving margins that extend well beyond the "over 30%" targets management has discussed as the Las Vegas Strip goal, as well as the 32.5% peak margins of 2006, Santarelli tells investors. The analyst sees out year consensus estimates for MGM as being too low and, accordingly, the perceived embedded sports / iCasino valuation as too high. As such, despite the strong performance in shares, he raised forecasts for MGM and upgraded the shares.

PAYPAL INITIATED: DA Davidson analyst Christopher Brendler initiated coverage of PayPal ($PYPL) with a Buy rating and $325 price target. The company's pricing changes announced last week alter its outlook, the analyst tells investors in a research note, adding that he had been concerned about the take rate pressure, but last week's news put PayPal in a "whole new light" as it reflects the platform's power. Brendler adds that the changes should have a "long tail" as they eventually rollout to contractual relationships as well as PayPal's international business.

'CHIA FROTH':
Northland analyst Gus Richard upgraded Seagate ($STX) to Outperform from Market Perform with an unchanged price target of $98. The stock has traded off since the company positively pre-announced on June 8, which coincides with cryptocurrency Chia having fallen from $1685 on May 14 to a bottom of $213 on June 22, noted Richard. While stating that "correlation isn't causation," he sees it as likely that much of the recent volatility in Seagate shares is a function of being a derivative Chia investment and thinks the volatility will likely diminish as investors understand the HDD supply and demand dynamics are favorable excluding the impact of Chia. Given the pullback in Seagate shares, he is less concerned about "Chia froth," the analyst added.

CONCERNS ABOUT IPHONE S CYCLE OVERBLOWN: Morgan Stanley analyst Katy Huberty raised the firm's price target on Apple ($AAPL) to $162 from $161 and keeps an Overweight rating on the shares, telling investors that she thinks concerns about "a more evolutionary rather than revolutionary" iPhone "S" cycle declines and worries that cyclical work and learn from home demand will decelerate are overblown, which creates a long-term buying opportunity. In the near-term she believes the June quarter will be stronger than originally expected and she also argues that next year won't look like past "S" cycles given that Apple recently expanded trade-in, financing, and installment offers that improve iPhone affordability while also noting that 5G adoption is still in the early stages.

PRIME DAY SALES ROSE 13%: Piper Sandler analyst Thomas Champion believes Amazon.com's ($AMZN) Prime Day continues to grow and estimates the seventh annual event reached $10.9B in cumulative sales, up 13% year-over-year. Champion thinks estimate units sold hit 259M, up 8% year-over-year, and his analysis suggests a "heavy" first-party mix driven by Amazon devices and electronics, with a slightly higher selling price than 2020. He reiterates an Overweight rating on Amazon shares with a $4,000 price target.

VALUATION MULTIPLE ATTRACTIVE: Citi analyst Paul Lejuez continues to believe that Walmart ($WMT) is "emerging from the pandemic stronger than ever." He expects strength over the next several years to be driven by growth in "additional higher-margin profit streams" such as advertising, fulfillment services, marketplace and financial technology. Though on the surface Walmart trades at 11.2 times 2021 expected EBITDA, Lejuez's analysis suggests the stock really trades at 10.4 times EBITDA, below the peer group which is trading at 13 times. Walmart has an attractive multiple and is even cheaper using a sum-of-the-parts analysis, Lejuez tells investors in a research note. He keeps a Buy rating on the shares with a $179 price target.


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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