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PLACE IN INDUSTRY, GROWTH OPPORTUNITY

RBC Capital analyst Joseph Spak upgraded Tesla (TSLA) to Sector Perform from Underperform, with a price target of $700, up from $339. The analyst admitted to getting Tesla shares "completely wrong," with a new framework that re-evaluates the company's place in the industry, its growth opportunity, and its inexpensive access to capital.

Spak also amended his 2025 deliveries forecast to 1.7 million, or a 28% five-year unit CAGR, versus his prior view of 1.3 million to reflect Tesla's capacity additions and BEV share assumption.

TAX RISKS

JPMorgan analyst Andrea Teixeira downgraded Coca-Cola (KO) to Neutral from Overweight, with an unchanged price target of $55. The analyst sees increased risk that the company loses its current tax dispute with the Internal Revenue Service.

In November, the U.S. Tax Court ruled in favor of the IRS, which determined that Coca-Cola would owe $3.3 billion in taxes for the tax years of 2007 through 2009. On top of that, there is a risk that this amount could more than triple should the IRS apply the same tax treatment to Coca-Cola for the tax years after 2009, Teixeira told investors in a research note.

The analyst believes this tax overhang "may linger into a good part of 2021."

BUY MCDONALD'S

Oppenheimer analyst Brian Bittner upgraded McDonald's (MCD) to Outperform from Perform for first time since 2012, with a $240 price target. The stock's recent underperformance "highlights subdued investor sentiment" at a time when there are catalysts for upside, Bittner told investors in a research note.

The analyst believes McDonald's "dominant" U.S. business enters 2021 "armed with upgraded sales strategies to drive outperformance." Further, he sees potential for an "offensive recovery" in the "hard-hit" international business and visibility into EBIT margin as well as free cash flow tailwinds beyond 2022.

MOVING TO THE SIDELINES

Oppenheimer analyst Brian Bittner downgraded Wendy's (WEN) to Perform from Outperform without a price target. The analyst remains upbeat toward a "continuation of strong fundamentals," but struggles to identify drivers for financial upside to the consensus model over the next two years.

LOW EXPECTATIONS

Cowen analyst John Kernan upgraded Foot Locker (FL) to Outperform from Market Perform, with a price target of $55, up from $38. The analyst believes consensus estimates for Foot Locker look conservative through fiscal 2022.

Beyond the fourth quarter of 2020 and the first quarter of 2021, which will benefit from stimulus checks, sell-side estimates appear too low through 2022 on sales and earnings, Kernan told investors in a research note. The analyst believes Foot Locker's durability is higher than the stock's current valuation implies.