We are upgrading
to Buy from Neutral and establishing a $36 price target. This is based on 11 times our estimated 2021 earnings per share and represents 22% upside potential from current levels. The shares are down 19% this year and trade at 8.5 times our 2021 estimated EPS. At these levels, and in this environment, the risk/reward is favorable, and we see both defensive traits and positive catalysts over the next 12 months. Defensive traits include a strong balance sheet, robust cash flow, and no inventory risk. Potential catalysts are small-business expansion, monetization of classifieds, a new CEO, and operational enhancements. We believe that it’s time to “Buy It Now.”


Outperform Price $9.95 on April 7

by Wedbush

We are adding KeyCorp to the Wedbush Best Ideas List. KeyCorp is better positioned than most of its peers to handle this unprecedentedly low interest-rate environment, due to its hedging strategy. KeyCorp has done a tremendous amount of work to derisk its loan portfolio and is better positioned for this next downturn. And consumer-loan growth (never a driver at KeyCorp) is starting to pick up, with a focus on [customers with] high FICO scores.


Hold Price $175.59 on April 8

by Stifel

McDonald’s is commonly viewed as a defensive stock, in terms of its fundamentals and price volatility, especially during uncertain environments. This is evidenced by the stock’s year-to-date performance (-11%), compared with the Stifel Restaurant Index (-21%) and the S&P 500 index (-18%).

McDonald’s has several competitive advantages over other restaurant chains. However, we believe there are risks that many investors may be overlooking, including: McDonald’s will likely bear more of the franchise relief than other highly-franchised companies; McDonald’s global footprint exposes it to more countries where stores are completely closed; and politically, it may be difficult for McDonald’s to continue to pay a hefty dividend while its franchisees accept federal government financial support.


Overweight Price $450 on April 8

by Wells Fargo Securities

Our EPS estimate for the first quarter rises from $6.58 to $7.01 (mainly on an idiosyncratic nonoperating gain), but falls by 1%, from $27.95 to $27.60, for 2020, and by 3%, from $31.55 to $30.50, for 2021.

Our 12-month price target remains at $490 (based on 16 times our 2021 EPS estimate). We reiterate our Overweight rating, mainly on the relatively favorable prospects for BlackRock’s fund flows and the firm’s financial strength.

We forecast first-quarter-end assets under management of $6.516 trillion (-12.3% versus the Dec. 31 level). The decrease of $914 billion includes $15 billion for total net outflows, $840 billion for market depreciation, and $59 billion for downward foreign-exchange adjustments. For most asset managers, we expect AUM shrinkage of much worse than 12% in the first quarter.

In the other direction, BlackRock is poised to generate advisory revenue and/or base fees from its recent bond-buying mandate from the Federal Reserve (and perhaps similar mandates).

Sirius XM Holdings

Outperform Price $5.17 on April 9

by Barrington Research

Economic strains will likely drive subscribers lower. March new-car sales were at the lowest seasonally adjusted rate since June 2010.

A significant negative factor is how the disruption in commutes and incomes [caused by the Covid-19 pandemic] impacts decisions on keeping the service. The new-car funnel remains important, but has become the source of less than half of all subscriber additions, reflecting an expanding presence in the used-car channel. However, used-car sales will certainly slow, as well.

In its first year of operating Pandora, Sirius had significantly improved that service’s profitability. However, ad-based services have been significantly [hurt] by reductions in ad budgets since shelter-in-place orders were issued in many states.

Overall, Sirius’ business model should enable some stability, despite the economic disruptions. Even so, we are reducing our estimates on key metrics, [including] EPS, now 17 cents a share (formerly 24 cents). When things return to normal, subscriber growth should rebound. Price target: $7.50.

O-I Glass

Market Perform Price $7.36 on April 8

by BMO Capital Markets

A higher percentage of bottled beverages are consumed on-premise (at restaurants, sporting events, etc.) versus canned beverages. Glass also has high fixed costs. Finally, Mexico’s temporary suspension of beer production is another headwind. O-I has withdrawn fiscal-year 2020 guidance. [We are] lowering our target price to $8 from $13.

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