Here are Tuesday’s biggest calls on Wall Street:
Evercore ISI adds a tactical outperform on Apple
Evercore said investors should look past iPhone headwinds when Apple reports earnings on Feb. 2.
“While reported earnings might be below current street expectations ($123B/$1.98) due to the iPhone production shutdowns, we are expecting a Mar-qtr guide that is ~5% above consensus driven by the recovery of iPhone sales lost in the Dec-qtr.”
Bernstein reiterates Tesla as underperform
Bernstein said it remains torn about Tesla shares.
“On one hand, the stock is now trading at close to our 2050 DCF investor sentiment is poor and if consensus numbers get appropriately reset, there could be limited downside risk to estimates. That said, it is unclear if consensus numbers will get reset sufficiently and whether Tesla could still struggle with demand issues over the course of the year.”
Goldman Sachs reiterates Tesla as buy
Goldman is sticking with its buy rating on Tesla even after the automaker said last week it was lowering prices.
“Although the reduced prices for Tesla vehicles will likely result in lower earnings, we expect this to help drive stronger volumes all else equal.”
Bank of America names Alphabet a top 2023 pick
Bank of America named the stock a top pick in 2023 and said it likes company’s with “defensive positioning.”
“We have only one Buy in the group, Alphabet, which we see as a more defensive value-focused stock.”
JPMorgan reiterates Amazon as a best idea
JPM said it’s staying bullish heading into earnings later this quarter.
“Still, AMZN remains our Best Idea & we remain confident the company can re-accelerate revenue growth & expand operating margins in 2023, driven primarily by Retail improvement.”
Wells Fargo downgrades Pfizer to equal weight from overweight
Wells said Pfizer’s stock needs a “reset” before it can work again.
“Meanwhile, uncertainty around COVID business could make investors nervous. COVID reset could occur when guidance is provided on 4Q′22 call.”
Goldman Sachs reiterates Microsoft as buy
Goldman said Microsoft has a “durable” earnings profile heading into its quarterly results next week.
“With Microsoft lagging the NASDAQ since its most recent peak on Aug 15, and trading at 20x C24 P/E, we believe the stocks’ go-forward performance is predicated on earnings durability rather than revenue growth.”
UBS reiterates Disney as buy
UBS said it’s bullish heading into Disney earnings in early February.
“We expect F1Q to show continued Parks strength (incl. record EBIT) and slightly improved DTC dilution while DTC adds slow & linear is impacted by a mixed ad environment.”
Evercore ISI reiterates Netflix as outperform
Evercore said it’s staying bullish heading into Netflix earnings Thursday.
“Based on intra-quarter data points, we view the Street’s Q4 Revenue and 4.5MM Net Adds estimates as reasonable.”
JMP downgrades Snap to market perform from market outperform
JMP downgraded the stock due to rising competition concerns.
“We downgrade shares of Snap to Market Perform from Market Outperform as we reduce Snap estimates again given declining U.S. time spent on Snap, which we believe is a direct consequence of increased competition from Reels (META, MO, $150 PT) and YouTube Shorts.”
Piper Sandler downgrades Bank of America to underweight from neutral and Wells Fargo to neutral from overweight
Piper said in its downgrade of Bank of America and Wells Fargo that it’s concerned about a tougher outlook after the banking giant’s reported earnings last week.
“It seems likely the 4Q represented a high-water mark here, and a tougher outlook (esp. thanks to deposit mix/migration) weighs on our expectations – the starting point for 2024 could be especially tough.”
Truist downgrades Roku to hold from buy
Truist said Roku’s valuation is full.
“Downgrade to Hold (from Buy), $50 year-end 2023 PT (from $90) on 20x/16x terminal EPS/EBITDA (leaving room for more cost actions). 2) Lowest visibility in group, given highest macro sensitivity and toughest disclosures/accounting, though we believe well-known.”
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