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Today's top analyst calls - July 26: LOW HD GPS DIDI SIX DISH T

SLOWING TAILWINDS: Wedbush analyst Seth Basham downgraded Lowe's ($LOW) to Neutral from Outperform with a price target of $210, down from $225, as he shifts his outlook on home improvement retail from positive to neutral. The analyst noted that existing home sales price turnover has peaked, and widely-cited forecasts call for only minimal increases in 2022 as weakening affordability and limited supply constrain sales. At the same time, Home Depot ($HD) and Lowe's achieved sales growth well beyond that dictated by housing and well above the broader home improvement retail industry since the pandemic began, and Basham believes that most of this relative sales strength will prove transitory-including some pulled-forward demand highlighted by companies such as Electrolux-as the economy normalizes.

BUY GAP: Deutsche Bank analyst Gabriella Carbone upgraded Gap ($GPS) to Buy from Hold with a price target of $42, up from $38. "Volatile trends" are now largely behind the company, said the analyst, who sees a path to consistent EBIT margin gains, driven by a reduction in fixed costs, mix shift to the "higher-margin and growth businesses" of Old Navy and Athleta, and improved profitability at the Gap brand. Gap is a very different company now than it was pre-pandemic given the removal of "trap" costs within the business, Carbone added.

ACTIVE INVESTIGATIONS: Atlantic Equities analyst James Cordwell downgraded DiDi ($DIDI) to Neutral from Overweight with a $25 price target. While "sensible goals" should "ultimately lead to a vibrant Chinese internet sector," the range of potential outcomes for DiDi while it is the target of active investigations in China leaves him unable to recommend the stock until there is more certainty, Cordwell told investors in a research note. Though he believes the most likely outcome will be manageable penalties "to curb - but not completely destroy - the company's dominant position," a delisting cannot be ruled out.

INFLECTION IN THE STORY: Wedbush analyst James Hardiman upgraded Six Flags ($SIX) to Outperform from Neutral with a price target of $50, up from $44. Despite a sharp selloff in recent months, the analyst continues to think that the theme park industry is a compelling reopening play, and that Six Flags represents a compelling combination of massive underperformance over the course of the pandemic, manageable reopening headwinds, and significant-yet-realistic margin enhancement post-pandemic opportunities.

'NEW LEASE ON LIFE': MoffettNathanson analyst Craig Moffett upgraded Dish ($DISH) to Neutral from Sell with a price target of $40, up from $15, after the company signed a services agreement with AT&T ($T). AT&T has granted Dish a "new lease on life" and more than that, it has afforded Dish "enormous optionality," Moffett told investors in a research note. The Dish/AT&T network service agreement is a "game changer" for Dish and a "disastrous result" for the wireless incumbents, the analyst added. Further, he believes the extended timeline granted in the agreement not only gives Dish more time to build out its network, but also improves the likelihood of a strategic partnership and future financing. Moffett now views Dish's bankruptcy risk as "much lower."


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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