Top Pre-Market Analyst Actions; GME +2% as BofA sees some under-appreciated catalysts, TWTR -2% following downgrades
Upgrades:
- GameStop (GME) was upgraded to Buy from Neutral at BofA/Merrill as they see a number of under-appreciated catalysts during the next few years including the upgrade of mid-cycle consoles from Sony (SNE) and Microsoft (MSFT) in addition to the new Nintendo (NTDOY) console, virtual reality, a favorable view of the software base, and a growing collectible business.
- Shares of GME take a +2.9% tick into the open this morning, little changed YTD (+1.2%) as the stock is on the way back up from multi-month lows in June near the $25.25-level
-
Hortonworks (HDP) was upgraded to Buy from Neutral at DA Davidson owing to four main points -- Recent Hadoop Summit reveals continued fundamental momentum; Optics around cash usage likely to improve; Domestically focused; Attractive valuation.
- HDP is indicated +2.2% this morning on relatively light volume; the stock holds a strong +48.5% gain off YTD lows from mid-February and is +9.0% off June lows
Downgrades:
-
Twitter (TWTR) was downgraded to Neutral from Buy at Monness Crespi & Hardt and to Neutral from Buy at SunTrust as the former sees waning confidence in the monetization of the product in spite of their favorable view of the content side. Firm concedes they are avid users of the product, but see limited upside to estimates and an unlikely takeout.
- Since a late-April, early-May selloff which took the stock down -39% YTD at its lows, shares are up about +32%; TWTR is indicated -2.3% this morning, however, as two downgrades leave the stock modestly off multi-month highs from Friday which broke past the $18-level for the first time since the early parts of March
-
CoreSite Realty (COR) was downgraded to Sell from Hold at Stifel largely based on valuation with a target price of $79. Firm noted COR has been a standout performer among peers in recent years, both in terms of execution and shareholder value creation. They fear however that the current valuation at 25x 2017E AFFO leaves little margin for error with respect to upcoming quarterly results / guidance, and they see the potential for NT rev/EBITDA headwinds.
- COR is indicated -1.0% this morning, slowing slightly from the strong pace of the advance the stock has seen in 2016; shares are higher +63.9% YTD and +20% since the beginning of June
Others:
-
CenturyLink (CTL) was initiated with a Neutral at Macquarie as they view challenging residential growth, data center monetization that could be capped and valuation as reasons to begin coverage where they do.
- CTL, like many Telecoms (IYZ) this year, has been on an out-performing bias versus the broader market; the stock trades a modest +0.1% this morning on light volume, yet still posts +21% YTD gains