Here are Thursday’s biggest calls on Wall Street:
Bernstein reiterates Tesla as underperform
Bernstein said Tesla shares are still overvalued.
“2023 has served as a reminder of how difficult TSLA is to call in the short term; however, we believe that in the long term, valuation matters, and the stock is trading above our fair value price of $150/share.”
Barclays upgrades Hilton to overweight from equal weight
Barclays said the hotel chain has underappreciated “growth prospects.”
“We shift our preference to HLT for its underappreciated net unit growth prospects amidst a slowing macro backdrop.”
Jefferies downgrades Etsy to underperform from buy
Jefferies said it sees “downside to consensus from slowing top line and moderating margin expansion.”
“Buyers are churning faster and spending less on ETSY, forcing marketing higher and putting pressure on EBITDA.”
Atlantic Equities reiterates Spotify as overweight
Atlantic Equities says Spotify has “best-in-class” music streaming.
“Spotify’s music business remains subject to a two-thirds pay away to the music labels and one key way to improve margins is to promote artists not signed to labels.”
Morgan Stanley reiterates Tesla as overweight
Morgan Stanley says Tesla’s cybertruck is a “side-show” right now.
“A lot has changed since Franz von Holzhausen threw a metal ball at the ‘Armor Glass’ window of the Cybertruck in November 2019. The truck is real and we had a great time with it last week behind the Austin plant. But financially it may be more of a ‘side-show’ to the Tesla story today.”
UBS initiates Marathon Petroleum as buy
UBS calls the petroleum company a “cash machine.”
“We initiate with a Buy rating and target price of $165/shr. In the past two years, MPC has paid out $19.3Bn to shareholders (supported by Speedway sale proceeds) – the highest amongst independent refiners.”
UBS initiates Phillips 66 as buy
UBS calls Phillips 66 a “diversified refiner with a growing midstream footprint.”
“Cash return to shareholders is competitive and we see PSX returning ~$18.8Bn to shareholders between 2023E and 2026E.”
Jefferies reiterates Target as buy
Jefferies said it sees “significant upside potential” ahead for Target.
“Based on company-provided guidance, TGT has the most margin recapture potential in 2023 among the Value Retail names we cover.”
Bernstein reiterates Costco as outperform
Bernstein said it sees the big box retailer as a “reliable deliverer” of growth.
“Costco, which we still see as a perennially reliable deliverer of low-teens EPS growth.
Bank of America reinstates Sysco as buy
Bank of America said it sees a “compelling margin recovery” story for shares of the food distributor.
“While margin recovery for SYY has been prolonged, we see a compelling trajectory for EBIT margin expansion in F2H and beyond as SYY focuses on improving productivity and supply chain efficiency.”
Bank of America reiterates Goldman Sachs as buy
Bank of America said the investment bank is “best-in-class.”
“We reiterate Buy as we believe GS is one of the best financial franchises globally at relatively discounted valuations with shares trading at 1.15x P/Book and 9x 2024 P/E.”
Bank of America reiterates Taiwan Semiconductor as buy
Bank of America said the semiconductor company has “strong AI potential.”
“Taiwan Semiconductor Manufacturing Co. is a key beneficiary and among our 20 global AI stock picks owing to the rising and widening applications of large language models (LLMs) and generative AI, led by ChatGPT.”
Evercore ISI reiterates Apple as outperform
Evercore said concerns about slowing iPhone growth are overdone.
“We think contrary to investor concerns, AAPL is well-positioned to grow iPhone units in CY23 and beyond driven by multiple tailwinds.”
Wells Fargo reiterates Signature Bank as overweight
Wells said the commercial bank is the “last man standing” at the crypto bar.
“The crypto landscape for banks just got lonelier with SI winding down operations. While SBNY has self-imposed limits on crypto deposits, they may get a bit of pricing power with the exit. We like SBNY for its diversification and sub-TBV valuation.”
Evercore ISI reiterates Meta as a top pick
Evercore named Meta a top pick, noting it still likes the company’s business model.
“META is clearly moving to reduce a cost structure that arguably became bloated post Covid. Our checks suggest improved ad attribution is helping to recover more ad $’s, and Reels is well on its way to closing its monetization gap.”
Oppenheimer reiterates Meta as outperform
Oppenheimer said it’s standing by its outperform rating onMeta.
“We are increasing our target to $235 (was $220) on higher advertising estimates as AI investments are beginning to drive improved targeting.”
Goldman Sachs reiterates FedEx as buy
Goldman said the shipping giant is well positioned heading into earnings next week.
“While there remains near term risk we continue to believe that should the economy indeed begin a bottoming process over 1H2023, FDX is well positioned to take eventual volume growth and drive it over their relatively high fixed cost Express network to improve margin as it has done in prior cycles.”
Mizuho reiterates Rivian as buy
Mizuho lowered its price target on the electric vehicle company, but said it’s standing by shares of Rivian.
“Maintain Buy, lower estimates/PT to $35 (prior $37) with higher interest expense and potential dilution.”
JPM reiterates Eli Lilly as overweight
The firm said it sees an attractive entry point for shares of the pharmaceutical company.
“Overall, we see the LLY story as very much on track and LLY remains one of our favorite names in the group.”
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