Here are the biggest calls on Wall Street on Friday:
Morgan Stanley reiterates Apple as overweight
Morgan Stanley says it sees an “attractive entry point” for the iPhone maker.
“Despite recent headlines causing concerns about AAPL Product demand, we have not picked up on any incremental negative data points in recent weeks and believe our Dec/Mar Q ests are already de-risked.”
Baird names Boeing a top 2023 pick
Baird named Boeing as a top idea this year and says it sees a recovery in aerospace.
“We are maintaining our bullish stance on aerospace stocks for 2023 reflecting the ongoing reopening of the economy globally and continued recovery in air travel with the biggest unknowns of international and corporate travel remaining as watch items.”
Deutsche Bank downgrades Bank of America and JPMorgan to hold from buy
Deutsche downgraded several bank stocks and says it sees the stocks setting new lows.
“In some ways, it’s tempting to get more positive given stocks are already down sharply, inflation seems to be slowing and Fed rate hikes may be coming to an end. But our gut is that stocks will set new lows and fully (or close to it) price in a U.S. recession suggesting there’s more risk from here. As part of this call, we are downgrading BAC and JPM from BUY to HOLD.”
Barclays downgrades Synchrony and Discover to equal weight from overweight
Barclays downgraded Synchrony and Discover and says it sees a more “balanced” risk/reward.
“Given that Barclays economists are calling for a recession in 2023 we think these stocks could get more inexpensive before they work, so we view the risk/reward as balanced and downgrade DFS, SYF, OMF, and OPRT to Equal Weight from Overweight.”
JPMorgan downgrades Silvergate to neutral from overweight
JPMorgan said in its downgrade of Silvergate that yesterday’s fourth-quarter metrics were “worse than expected.”
“Worse than Expected Results with Long-Term Earnings Power a Question Mark.”
Wells Fargo names Caesars and Royal Caribbean as top 2023 picks
Wells says it sees “recovery and growth tailwinds” for stocks like Caesars and Royal Caribbean.
“Post a challenging 2022, we prefer stocks in areas that are positioned to benefit from recovery or growth tailwinds in 2023.”
UBS names Target a top pick in 2023
UBS says it sees Target as a market share gainer in 2023.
“We think TGT should see better share performance as it gains from two key themes this year: 1) Share gains from retailers like BBBY (and others) closing stores and 2) a profit recovery as it retraces what it lost in ’22.”
Credit Suisse reiterates Eli Lilly as outperform
Credit Suisse named the biopharma company a top pick in 2023 and calls Eli Lilly the “gold standard.”
“Our Outperform rating is based on ‘gold standard’ growth within our coverage.”
Mizuho names Kraft and Mondelez as top 2023 picks
Mizuho said Kraft has “elasticity.” The firm also named Mondelez a top pick and says it sees a positive turning point.
“KHC: Elasticity is much better than investors feared and reflects share gains from other brands and share gains across consumer income demographics. ... .MDLZ: 2022 marked a turning point for the model.”
JPMorgan upgrades Voya Financial to overweight from neutral
JPMorgan says the financial services company has a “capital-light” business model.
“Meanwhile, we feel that VOYA is the best combination of a capital-light business mix, lower risk ... profile, and attractive valuation in the life insurance group.”
Stifel upgrades MGM to buy from hold
Stifel said in its upgrade of MGM that it sees a Las Vegas recovery.
“We believe the LV Strip will continue to flourish aided by a strong event calendar and the return of group/convention traffic.”
Wells Fargo initiates Snowflake as overweight
Wells said in its initiation of the stock that it’s built to “weather the storm.”
“While we acknowledge tough sledding for many in the current environment, our work suggests SNOW is better built to weather this storm given the company’s mission-critical technology, strong expansion dynamics inherent to this model and impressively well-balanced financial profile, which we view as deserving of a premium.”
Morgan Stanley names Wells Fargo as a top pick into earnings
Morgan Stanley says Wells Fargo could “surprise to the upside” when it reports earnings next week.
“Meanwhile, we think there’s opportunity for WFC to surprise to the upside with its 2023 expense guide.”
Wells Fargo upgrades Sunrun, First Solar and Sunnova to overweight from equal weight
Wells upgraded several solar stocks on Friday and says it sees the regulatory tide turning positive in 2023.
“We’re upgrading RUN, NOVA, FSLR to Overweight and SPWR to Equal Weight and downgrading BE to Equal Weight and BLDP to Underweight.”
Wells Fargo upgrades Lululemon to overweight from equal weight
Wells said in its upgrade of Lululemon that it likes stocks that are defensive and market share gainers.
“Our key focus within this call is on 1) high-quality, defensive, market share gainers with a higher degree of top-line and margin visibility (we select BURL [also naming our ‘Top Pick’], ROST, LULU, and NKE in this basket).”
Evercore ISI downgrades Hershey to in line from outperform
Evercore downgraded the Reese’s peanut butter cup maker, mainly on valuation.
“We are downgrading HSY on valuation and less EPS upside — after a year of ‘blowout’ reports that were rewarded by the market.”
Cowen downgrades Constellation Brands to market perform from outperform
Cowen said in its downgrade of the beer-and-wine stock that it sees too many headwinds.
“We are downgrading STZ to Market Perform as we have growing concerns over downtrading, in both the above-premium beer segment, as well as wine. STZ’s industry leading beer margins will also face continued headwinds.”
Citi initiates Waste Management as buy
Citi said in its initiation of the stock that it has “underappreciated pricing power.”
“WM is the largest operator in the high-quality U.S. waste business, nearly double the size of the next largest competitor; the company is poised to benefit from whitespace growth in renewable natural gas investing $825mm through 2026 to add $400mm in run-rate EBITDA.”
Piper Sandler names Amazon a top 2023 pick
Piper Sandler says it sees share gains and easing comps for the e-commerce giant.
“AMZN is on track to be the fastest growing digital advertising platform for FY22 at ~20% y/y.”
Bank of America initiates Boot Barn as buy
Bank of America says the shoe company is a “best-in-class western footwear and apparel retailer.”
“We’re initiating on Boot Barn with a Buy rating as we have a high degree of confidence in the company’s long-term store growth potential.”
Needham names Uber a top 2023 pick
Needham says Uber’s valuation is “reasonable.”
“Emerging revenue streams from advertising and grocery.”
BMO reiterates Nike as outperform
The firm says it’s sticking with shares of Nike.
“Though we cannot call shares ‘inexpensive,’ we expect easing China compares and improving narrative to carry shares higher near-to-midterm.”
Bank of America names Domino’s a top 2023 pick
The firm says Domino’s is well positioned in a declining macroeconomic environment.
“We think pizza is well positioned for increasingly budget-focused consumers while labor inflation slows.”
KeyBanc reiterates Bed Bath & Beyond as underweight
Keybanc lowered its price target on Bed Bath & Beyond to 10 cents per share from $2.00 after the company’s weak earnings results on Thursday.
“As a result, we lower our price target to $0.10, as we believe creditors are in the best position to realize value from assets such as buybuy BABY.”
Jefferies reiterates McDonald’s as buy
Jefferies says the fast food chain is a share gainer and defensive.
“We view MCD as the best defensive/offensive play in restaurants given a looming recession, but also the opportunity to take share.”
Morgan Stanley names Moderna a catalyst-driven idea
Morgan Stanley says it’s cautiously optimistic regarding Moderna’s RSV (respiratory syncytial virus) vaccine.
“Moderna is expected to release the Ph3 IA1 analysis of its RSV vaccine in older adults this winter.
Evercore ISI adds Costco to its `fab five’ list
The firm says Evercore is a defensive stalwart.
“Bottom Line: COST is added to our Fab Five portfolio providing defensive ballast along with KR.”
Wells Fargo names Microsoft a top pick in 2023
Wells called Microsoft a best idea for 2023 and says it likes the company’s “reach and scale.”
“We’re doubling down on large-cap platform players with strong mgmt teams + proven ability to consolidate customer spend given advantages of reach and scale.”
Cowen upgrades Molson Coors to outperform from market perform
Cowen says the beer company is now on “firmer footing.”
“We are upgrading TAP to Outperform and raising our PT to $60. After a decade of revenue declines, we view TAP now on much firmer footing to deliver solid revenue growth fueled by 1) market share gains in beer, 2) consistent beer pricing.”
Evercore ISI reiterates Netflix as outperform
Evercore says its recent survey checks show thatNetflix’sad-tier service is driving growth.
“And the key take from our SAVOD (subscription & ad-supported video on demand) survey is that, while very early days, we believe the company’s BWA (Basic With Ads) offering is driving solid incremental subscriber growth.”
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