Here are Wednesday’s biggest calls on Wall Street:
TD Cowen downgrades Freyr Battery and EVgo to market perform from outperform
TD downgraded EVgo and said the EV infrastructure company has funding needs. The firm also downgraded Freyr and said it’s concerned about “rising rates and a potential ‘higher for longer’ scenario.”
“As a result, we downgrade EVGO & FREY to Market Perform from Outperform given the aforementioned concerns and potential for more funding needs.”
Goldman Sachs reiterates Apple as buy
Goldman said it’s bullish heading into Apple earnings next week.
“We’re encouraged by the acceleration in Services revenue growth driven by a recovery in app spending, as well as continued growth in the iPhone installed base and increasing hardware attach per user. For
BMO upgrades Progressive to outperform from market perform
BMO said in its upgrade of the auto insurance company that “offensive growth” is coming.
“PGR’s pivot back to offensive growth during a time when many of its peers continue to ‘heal’ is highly likely in the coming months, aided by double-digit auto inflationary pressures decelerating off all-time highs while at the same time, pricing-power has reached even higher mid/ high-teens levels.”
Bank of America reiterates Microsoft as a top pick
Bank of America said it’s standing by its buy rating after Microsoft’s strong earnings report on Tuesday.
“With incremental AI contribution coming in Azure and Office, we expect organic topline to accelerate to mid/high teens cc in H2FY24 (in an upside case).”
Wells Fargo upgrades Gap to overweight from equal weight
Wells said the turnaround is taking shape for Gap.
“Desperate for idiosyncratic long ideas in retail, the setup at GPS has become compelling—with right-sized inventory, improved cost controls and new mgmt set to inflect the narrative and drive material upside to Street.”
Needham initiates Palo Alto Networks as buy
Needham said the cybersecurity company is a leader in the space.
“We initiate coverage of PANW with a Buy rating and a $305 Price Target. PANW has transformed itself into a stalwart in Cybersecurity as the leader in network firewalls with >25% and growing market share.”
Goldman Sachs initiates SharkNinja as buy
Goldman said it sees margin expansion for the product design and tech company.
“Against a choppy macro backdrop, we believe SN’s innovation-led market share growth story is attractive, and we see potential for growth across categories and geographies, bolstered by margin expansion from easing cost pressures.”
Deutsche Bank upgrades Livent to buy from hold
Deutsche said it sees an attractive entry point for the lithium company.
“We are upgrading Livent to BUY rating and our PT is now $21, implying over ~35% upside vs the current share price.”
Citi downgrades Etsy to neutral from buy
Citi said there’s low visibility on the e-commerce company heading into 2024.
“While over the longer term we still believe Etsy has an opportunity to accelerate and capture more of its TAM, in the near term we still see too many headwinds that could pressure discretionary spend and Etsy’s opportunity to return to double-digit growth.”
Barclays upgrades Verizon to overweight from equal weight
Barclays upgraded the telecom giant after its earnings report on Tuesday and said it likes the company’s free-cash flow.
“We believe the expected improvement in second derivatives across unit growth, ARPU, service revenue, EBITDA and free cash flow is still not reflected in valuation, and upgrade VZ to OW.”
Piper Sandler downgrades Regions and Citizens Financial to neutral from overweight
Piper said in its downgrade of Regions that it sees shares rangebound for the foreseeable future. The firm also downgraded Citizens and said it sees too many “moving parts.”
“On CFG, we still believe strongly in the model, management team, and L-T prospects; but with myriad moving parts, the potential to outperform seems further out than we would like. As for RF, still an excellent company, but a sizeable 3Q miss and some credit deterioration all suggest to us that the shares will be too rangebound for now for it to return to outperformance over the next year.”
Bank of America downgrades TransUnion to underperform from buy
Bank of America double downgraded the stock due to concerns about consumer lending.
“We downgrade TRU to Underperform from Buy, as we expect the slowdown in consumer lending to persist into mid/late-2024
SocGen downgrades Farfetch to sell from neutral
SocGen said in its downgrade of the online luxury company that it’s concerned about heightened competition for Farfetch.
“Low valuation is not enough; several issues must be resolved to attract investors.”
Deutsche Bank upgrades Paccar to buy from hold
Deutsche said the machinery company is “best-in-class.”
“PACCAR is a best-in-class Machinery company that has historically executed very well in a downturn given relatively mild decremental margins - and the company’s Parts business has continued to grow as a percent of sales, creating a clear cycle over- cycle uplift in profitability and reducing earnings cyclicality vs. history.”
UBS upgrades Chewy to neutral from sell
UBS said worst may be over for the stock.
“We upgrade our rating on CHWY to Neutral from Sell as we believe the stock now largely reflects the potential NT [near term] challenges.”
Goldman Sachs reiterates Alphabet as buy
Goldman said it’s standing by its buy rating on Alphabet after its earnings report on Tuesday.
“Broadly, we had a more constructive reaction to this earnings report than the after-hours stock performance implies as core revenue continues to accelerate, services margins continue a positive progression, and the company remains committed to returning capital to shareholders.”
Bernstein reiterates Nvidia as outperform
Bernstein said “material upside” is still possible for Nvidia shares.
“NVDA (outperform, $675): The datacenter opportunity is enormous, and still early, with material upside still possible.”
Wells Fargo upgrades Veeva Systems to overweight from equal weight
Wells said it sees double-digit growth for the computer application company.
“We see a path to double-digit revenue growth returning for Commercial Cloud and expect Veeva to fully defend its CRM turf with its top 25 pharma clients.
Bank of America initiates Syndax as buy
Bank of America said it sees upside for the pharmaceutical company.
“We initiate coverage of Syndax Pharmaceuticals with a Buy rating and a $29 PO. Syndax is a clinical stage biopharma company advancing a novel treatment for certain leukemias with high unmet need.
Compass Point downgrades Affirm to sell from neutral
Compass Point said it sees too much uncertainty for the fintech company.
“Putting this together, we believe the near-term setup has more downside risks for AFRM shares and that the upside optionality is more limited with shares trading at 2.93x 4Q23 TBV per share of $6.54.
Deutsche Bank downgrades Corning to hold from buy
Deutsche said in its downgrade of Corning that the recovery is taking longer than expected for the glass company.
“Demand weak across key end markets, with an inflection unlikely until 2H24.
Jefferies initiates Utz as buy
Jefferies said the snacks company is a “differentiated food play.”
“In a sector clouded by potential GLP-1 impact and current price/volume headwinds, we view UTZ as a differentiated food play in an historically attractive category.”
Monness, Crespi, Hardt & Co. downgrades Alphabet to neutral from buy
Monness said it’s concerned about regulatory headwinds.
“We believe Alphabet is well positioned to capitalize on the digital ad trend, participate in the cloud’s growth, innovate with AI, benefit from digital transformation, and leverage a leaner cost structure; however, regulatory headwinds persist, competition is dynamic, and we believe the darkest days of this downturn are ahead of us.”
Piper Sandler downgrades Livent and Albemarle to neutral from overweight
Piper downgraded several lithium stocks on Wednesday due to concerns about EV manufacturing challenges.
“We are reducing our ratings and PT’s for LTHM and ALB to Neutral from Overweight and $19 (prior $33) and $155 (prior $255), respectively, based on challenges in EV manufacturing and demand, which may conspire to significantly degrade lithium’s S/D dynamics.”
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