AMD downgraded, American Airlines upgraded: Wall Street's top ...
AMD downgraded, American Airlines upgraded: Wall Street's top analyst calls
The most talked about and market moving research calls around Wall Street are now in one place. Here are today's research calls that investors need to know, as compiled by The Fly.
Top 5 Upgrades:
Wolfe Research upgraded American Airlines (AAL) to Outperform from Peer Perform with a $17 price target. The firm is selectively recommending investors increase exposure to airlines as domestic capacity growth slows, noting that American is the only airline that hit its capacity and CASMx guidance in 2023.
Goldman Sachs upgraded StoneCo (STNE) to Buy from Neutral with a price target of $21, up from $12. The outlook looks slightly more favorable for Brazil payment stocks, as growth seems to be reaching a positive inflection point, which can lead to further upside risks to earnings, the analyst tells investors.
UBS upgraded J.B. Hunt (JBHT) to Buy from Neutral with a price target of $234, up from $205. The company's Q4 earnings report provided evidence that their intermodal margin has likely reached bottom and shows potential for gradual improvement in 2024, as well as pointing to a stronger cyclical upturn in 2025, the firm says.
BTIG upgraded SentinelOne (S) to Buy from Neutral with a $30 price target. The firm conducted a number of field checks across the security software space and spoke with five large enterprise CISOs/CIOs over the last couple of weeks and notes there was "a clear uptick" in discussions on the endpoint security space at all contacts.
Bernstein upgraded Union Pacific (UNP) and Norfolk Southern (NSC) to Outperform from Market Perform with price targets of $280 and $272, respectively. The firm thinks high quality, low volume North American transportation dividend paying stocks "will get a look as the interest rate regime turns, and railroads fit that bill."
Top 5 Downgrades:
Northland downgraded AMD (AMD) to Market Perform from Outperform and removed the firm's price target. AI chip growth in calendar 2023 benefited from the ChatGPT moment, average selling price increases, double ordering, and Chinese companies stockpiling, notes the firm, which argues that current consensus expectations for AI growth reflect "irrational exuberance."
Oppenheimer downgraded Home Depot (HD) and Lowe's (LOW) to Perform from Outperform with price targets of $345 and $230, down from $360 and $275, respectively. The firm assumes a more cautious near-term stance towards home improvement retail.
HSBC downgraded Lululemon (LULU) to Hold from Buy with an unchanged price target of $500, citing valuation. The stock had a fantastic run in 2023 and the current valuation does not look compelling in the context of impending moderation of growth, the firm says.
Barclays double downgraded Archer Daniels (ADM) to Underweight from Overweight with a price target of $60, down from $95. The firm cites weaker crush margins, tougher ethanol compares and lingering challenges in Nutrition for the downgrade. Roth MKM, Baird and Goldman Sachs also downgraded Archer Daniels but to Neutral-equivalent ratings.
Morgan Stanley downgraded e.l.f. Beauty (ELF) to Equal Weight from Overweight with a price target of $168, up from $137. The shares are appropriately valued after nearly tripling since the beginning of 2023 and rallying 10-fold since a pre-COVID beginning of 2020, the firm notes.
Top 5 Initiations:
Benchmark initiated coverage of Maplebear (CART), the parent of Instacart, with a Buy rating and $32 price target. Despite the firm's expectation for future digital grocery market share loss to competing intermediaries and traditional grocers, Benchmark argues that the stock's current valuation underappreciates the company's discounted free cash flow outlook and addressable market.
Goldman Sachs initiated coverage of Worthington Enterprises (WOR) with a Sell rating and $50 price target. The firm believes the company is well positioned to execute against its initiatives, but looks for this to be more than offset by weak industry and end market dynamics over the next 12 months.
Barclays initiated coverage of NiSource (NI) with an Overweight rating and $28 price target. NiSource has limited rate case risk and an attractive entry point at a small valuation discount to both gas and electric comp groups, the firm argues.
UBS initiated coverage of Enovis (ENOV) with a Buy rating and $75 price target. The firm believes the company can deliver orthopedics market-leading high single digit sales growth through at least 2027 as the portfolio mix shifts to higher growth reconstructive.
JPMorgan initiated coverage of EyePoint Pharmaceuticals (EYPT) with an Overweight rating and $35 price target. In the lead indication of wet age-related macular degeneration, which afflicts at least 1.5M patients in the U.S. alone, EyePoint has recently showcased Phase 2 data that suggest it can possibly be a six-month maintenance treatment option as a new mechanism of action in the paradigm, says the firm.
