Here are Thursday’s biggest calls on Wall Street:
Morgan Stanley reiterates Nvidia as overweight
Morgan Stanley said investors should continue to buy the dip in shares of Nvidia despite reports of AI chips supply constraints.
“NVIDIA is selling off sharply because of guidance from a key OEM customer (SMCI, not covered) for systems revenues to decline slightly in the September quarter. While it is generally clearly understood by investors that this is a function of supply, not demand - specifically supply of NVIDIA GPUs - we are hearing general consternation about some of the complex dynamics of triangulating very strong supply chain to q/q growth.”
TD Cowen reiterates Home Depot as outperform
TD said the stock is best-in-class heading into earnings next week.
“HD: Best-In-Class Operator With Attractive Offensive & Defensive Characteristics.”
Deutsche Bank names Walmart and Ulta as top picks
Deutsche said it sees upside to estimates for Walmart due to GLP-1 obesity drugs. The firm also said Ulta is well positioned into earnings later this month.
“Our top picks are WMT and ULTA: 1) WMT = continued sales momentum fueled by grocery share gains and upside from GLP-1 with ability to drive better margins starting in 2H, and 2) ULTA = large share price correction and likely cleaner set-up into results with upside to SSS vs. consensus and FY outlook.”
Citi downgrades Petrobras to neutral from buy
Citi downgraded the Brazilian petroleum company mainly due to political risks.
“PBR may continue to follow international prices but with a strategy that differs from that of the past, with a poor PPI correlation.”
Oppenheimer names Freshpet a top idea
Oppenheimer added the stock as a top pick and said it likes the company’s management.
“Based on our work, we are re-adding FRPT to top pick status and raising our price target to $100. We are now increasingly confident in management’s ability to deliver on both top and bottom-line targets following more robust volume trends lately, coupled with significant progress on driving profit improvements.”
Wedbush upgrades Roblox to outperform from neutral
Wedbush upgraded the stock after its earnings report, noting it’s compelling.
“On balance, however, Roblox may have the most compelling growth trajectory among the video game names in our coverage universe after taking into account its user base size, its new products, and the potential to revisit its approach to profits.”
Morgan Stanley upgrades Kornit Digital to overweight from equal weight
Morgan Stanley said investors should buy the dip on shares of the digital printing company.
“Kornit’s stock fell 21% today, after reporting a relatively in-line quarter but guiding down 2H revenue about 7% below Consensus expectations.”
Bank of America reiterates Disney as buy
Bank of America said it’s standing by its buy rating on the stock after Wednesday’s earnings and that its valuation is attractive.
“Near term catalysts include: (1) additional updates on the strategic outlook (including potentially rationalizing the asset base) for DIS with a positive message likely at the Analyst event in September and (2) upside to initial cost saving plan.”
Jefferies upgrades Global Payments to buy from hold
Jefferies said the payments company “renewed scarcity value.”
“With few stories/set-ups improving coming out of 2Q, we believe GPN has a renewed scarcity value with estimates in a safer place and a depressed multiple that makes for an asymmetric risk/reward.”
Truist downgrades Penn to hold from buy
Truist said more time is needed to digest the company’s deal with ESPN.
“PENN reported an in-line Q2, though the ESPN announcement was the focus. With the stock outperforming today, we’re opportunistically downgrading to Hold as we think the market will take time to digest this new deal.”
Goldman Sachs reiterates Palo Alto Networks as buy
Goldman said it sees an improved setup heading into Palo Alto earnings next week.
“We believe the set up for the stock is improving into the Aug 18 EPS and Analyst Day Event.”
DA Davidson upgrades GoodRx Holdings to buy from neutral
DA upgraded the prescription drug company after its earnings report and says it has “increased confidence in the company’s ability to achieve revised numbers.”
“GoodRx reported a fine 2Q, then provided mixed guidance as management evolves the business and works through short-term headwinds in the process of putting the company on firmer footing.”
Bank of America reiterates Nio as buy
Bank of America raised its price target on the electric vehicle company to $15.40 per share from $13 and said it sees solid delivery momentum continuing after the company’s July deliveries report.
“NIO reported July deliveries of 20.5k units, up 104% YoY/ 91% MoM [month over month].”
Bank of America reiterates Tesla as neutral
Bank of America said it’s standing by its neutral rating on the stock as cutting prices is keeping margins under pressure.
“TSLA benefited from volume growth, but price cuts pressured margins to levels that resemble traditional OEM [original equipment manufacturers margins.”
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