Here are Monday’s biggest calls on Wall Street:
MoffettNathanson upgrades Disney to outperform from market perform
Moffett upgraded Disney shares after the entertainment giant announced it was bringing back former CEO Bob Iger.
“We applaudDisney’s Board for the courage to make this change.”
Loop downgrades Workday to hold from buy
Loop said it’s concerned about slowing growth for the the human capital software company.
“Our most recent checks indicate that its core HCM (human capital management) business is slowing, which we believe could lead the company to issue a conservative 24-month subscription revenue growth guidance for next year (FY24) that could be well below our/Street estimate of 20%.”
JPMorgan reiterates Amazon as top idea
JPMorgan said the e-commerce giant is well positioned heading into the holiday season.
“AMZN remains our best idea, but of course it is also subject to macro headwinds, as evident in the company’s 4Q revenue outlook.”
JPMorgan names Target and Costco top holiday picks
JPMorgan said Target and Costco are well positioned heading into the holiday shopping season.
“Third, from a category perspective, we see festive apparel (not athletic) and beauty (TGT, ULTA) as the biggest winners along with food (BJ, COST, TGT, WMT) driven by inflation and the ongoing shift back to experiences (entertaining and travel) vs. goods wallet normalization, as we’ve long discussed.”
Raymond James upgrades Comerica to outperform from market perform
Raymond James said the bank is well positioned for a recession.
“We are upgrading CMA shares to Outperform and establishing an $85 price target following the recent selloff in the stock post earnings juxtaposed with its relatively solid fundamental positioning heading into a potential recession.”
Wells Fargo upgrades Silvergate to equal weight from underweight
Wells said shares are at a “fundamental floor.”
“Our downside scenario played out faster than expected, and crypto winter has morphed into an existential question of survival. This is difficult for SI, as all current and future growth engines are essentially on hold.”
Goldman Sachs upgrades On Holding to buy from neutral
Goldman said the footwear and sports apparel company has an “attractive business model.”
“We expect On’s strong product proposition centred on innovation to drive continued rapid growth and best-in-class gross margins.”
Raymond James downgrades Cigna and UnitedHealth to outperform from strong buy
Raymond James downgraded several insurers on Monday and said it still likes the stocks but that it sees some near-term headwinds.
“While we are moving our ratings on UNH and CI down a notch, we remain generally constructive on these names. In the case of CI, we note the relatively low exposure to MA (medicare advantage) and continued strong performance of the PBM with 2023 upside from biosimilars. In the case of UNH, we note the offsets from its diverse revenue streams, the tail effect from $20B of YTD M&A, and some offset from its fee for service exposure in Optum Health.”
Argus downgrades Carvana to sell from hold
Argus said in its downgrade of the used car company that it thinks Carvana will struggle to be profitable.
“Carvana appears to have lost some of its competitive advantage as many traditional dealerships have expanded online sales.”
UBS initiates American Express as neutral
UBS said American Express has “limited upside potential.”
“But, we think consumer-sensitive stocks like AXP may have limited absolute upside potential as investors anticipate a recession, and deteriorating credit drives our ’23E EPS 12% below consensus, and our ’24E is 11% below.”
Morgan Stanley initiates Las Vegas Sands as overweight and names DraftKings as a top pick
Morgan Stanley said in its initiation of Las Vegas Sands that it sees an attractive risk/reward. After a change in analyst coverage, the firm also called DraftKings a top “secular growth story.”
“DraftKings (DKNG.O, Top Pick - 34% Upside): Best Secular Growth Story Poised for Profit Inflection. Las Vegas Sands (LVS.N - 11% Upside): Leader in Macau Mass + best balance sheet = attractive risk-reward.”
Goldman Sachs initiates Mobileye as buy
Goldman says the autonomous vehicle company is a market leader in the race to autonomous vehicle technology.
“We believe that Mobileye is the leading auto tech enabler for ADAS (advanced driver assistance systems) and AV (autonomous vehicle) applications, and we view the company as well positioned for growth given its vision/AI capabilities that are applicable for both ADAS and AVs, its ability to provide full solutions, and its strong market share.”
Morgan Stanley downgrades MongoDB to equal weight from overweight
Morgan Stanley said in its downgrade of the database platform company that it’s concerned about slowing growth for MongoDB.
“While still a favorite LT growth story, a challenging spend environment will likely weigh on growth for the next few quarters resulting in FY24 cons expectations that may be too high.”
Cowen downgrades Intel to market perform from outperform
Cowen reinstated coverage of Intel and downgraded the stock, saying it sees “tough fundamentals.”
“Reinstating At Market Perform As Tough Fundamentals In 2023/24 To Be Offset By A Protected Dividend, Opportunities In 2025.”
Barclays downgrades RH and Williams-Sonoma to equal weight from overweight
Barclays said in its downgrade of the stocks’ that it’s concerned about a “weakening housing cycle.”
“We are downgrading both WSM and RH on a weakening housing cycle that we believe will have a trickle-down impact on home furnishing spending over the next 12 to 24 months and high-end wallet pressure.
UBS reiterates Microsoft as buy
UBS said it likes that Microsoft is relying on price increases to drive greater revenue.
“Combined with the big O365/M365 (and other) price increases earlier this year, Microsoft is now clearly leaning far more heavily on price as a revs driver than it has in many years.”
JPMorgan reiterates Charles Schwab as overweight
JPMorgan said Charles Schwab is well positioned as one of the biggest “distributors of third-party mutual funds.”
“We see Schwab continuing to better monetize its platform, leveraging its position as one of the largest distributors of third-party mutual funds.”
Deutsche Bank reiterates Nio
Deutsche said it thinks the worst operational issues for Nio may be over.
“NIO continues to frustrate us/investors with another round of operational issues which are holding back volume in 4Q but we are optimistic that the worse may finally be over, further supported by the government’s gradual pivot away from COVID zero.”
Morgan Stanley upgrades Restaurant Brands to equal weight from underweight
Morgan Stanley said it likes that the owner of brands such as Burger King appointed the former Domino’s CEO as executive chairman.
“We are upgrading the shares of QSR to EW, PT to $71; the appointment of Patrick Doyle, former CEO of DPZ, as executive chairman is the catalyst.”
Cowen reiterates Coinbase as outperform
Cowen said trading volumes for the crypto company remain “above pre-FTX turmoil levels.”
“An updated analysis suggests COIN avg. daily spot trading volumes remain above pre-FTX turmoil levels, albeit at a smaller margin than our prior analysis from 11/14.”
Goldman Sachs reiterates Salesforce as buy
Goldman Sachs said it’s bullish heading into Salesforce earnings next week.
“Adjusting estimates to reflect trough top-line growth in FY24; remain constructive on path to profitability.”
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