Here are Tuesday’s biggest calls on Wall Street:
Morgan Stanley reiterates Apple as overweight
Morgan Stanley said it’s standing by it’s overweight rating on Apple shares heading into earnings on Feb. 2.
“Dec Q beat now priced in but myriad next twelve months catalysts keep Apple as top pick.”
Telsey reiterates Amazon as outperform
Telsey said the e-commerce giant is well positioned to gain market share.
“Overall, we believe Amazon should still continue to gain market share by leveraging its sticky Prime member base, small business relationships, technological edge, and retail consolidation.”
Bernstein reiterates Apple as market perform
Bernstein said it’s “ambivalent” about Apple shares heading into earnings next month.
“We are ambivalent on the stock and ultimately see risk-reward on AAPL as neutral to slightly negative.”
Loop initiates GlobalFoundries as buy
Loop initiated the semiconductor manufacturer with a buy and said it’s well positioned to benefit from growth in the auto and smart device markets.
“We initiate coverage of GlobalFoundries with a BUY rating. We believe GFS is ideally positioned to benefit from the secular growth in key end markets in semis (Autos, IoT, DC and Smart Devices), helped by their purpose-built technologies.”
JPMorgan initiates Okta, Palo Alto Networks and CrowdStrike as overweight
JPMorgan initiated several cyber security companies on Tuesday and said “accelerating tailwinds within the cybersecurity market are driving demand.”
“We are initiating on the Security Software industry with Overweight ratings on PANW, FTNT, CRWD, S and OKTA, Underweight ratings on VRNS and QLYS, and Neutral ratings for CYBR, TENB, ZS, CHKP, RPD and NABL.”
KeyBanc upgrades Lyft to overweight from sector weight
KeyBanc said its survey checks show ridesharing data appears stable.
“When we layer this in with aggressive cost-cutting action in recent quarters and an ongoing recovery along the West Coast, we see meaningful opportunity for improvement in Lyft’s EBITDA over the course of 2023.”
Bernstein downgrades Advanced Micro to market perform from outperform
Bernstein said it’s concerned about a deteriorating PC market.
“And our belief that AMD would prove relatively more immune to channel degradation proved unfortunately incorrect, and in recent months we have been growing more wary of potential PC dynamics, both given the market outlook as well as exacerbated by Intel’s semi destructive behavior as of late as they use both price and capacity as a strategic weapon, continuing to overship even amid broader breakdowns in the industry.”
Oppenheimer initiates Target as outperform
Oppenheimer said Target is well positioned for long-term gains.
“Longer term, we believe the company is well positioned to continue capturing share, driven by digital efforts, store investments, merchandising success on the exclusive brand front, competitor liquidations over time, partnerships with other brands/retailers, and traction with grocery efforts.”
UBS downgrades Sealed Air to neutral from buy
UBS said it sees weak growth for the company.
“We downgrade SEE to Neutral and trim estimates on expectations of weaker market growth and slower automation recovery.”
JPMorgan upgrades Blackstone to overweight from neutral
JPMorgan said the alternative asset management company is “best-in-class.”
“we see a retail franchise still intact and positioned for stronger growth over the intermediate term, a real estate franchise with such good performance from which we expect growth even if the asset class falls from favor, and an insurance operation that is adding layers of revenue/ earnings growth via credit and real estate debt investments for multiple years.”
Atlantic Equities reiterates Warner Brothers Discovery as outperform
Atlantic Equities said it sees an 80% upside for the stock.
“Cord cutting is undeniably accelerating and we currently estimate US pay TV subscribers are declining at a rate of 7% per year. However, we believe that newly merged Warner Bros. Discovery can partially offset this as it negotiates new carriage agreements.”
Mizuho reiterates Coinbase as underperform
Mizuho says it’s standing by its sell rating on shares ofCoinbaseand that its survey checks show that “despite January’s Bitcoin rally, retail investors continue to shy away from crypto.”
“With take rates 50-100 times higher than institutional, retail transaction revenue accounted for 83% of COIN’s total revenue in 2021.”
UBS names BJ’s, Costco and Walmart top 2023 picks
UBS said it expects “non traditional channels to outperform supermarkets in the year ahead.”
“Both BJ & COST have recently seen record membership renewals & premium membership penetrations, suggesting customers have been gravitating to their offerings to maximize spending power. Plus, COST has a membership fee hike likely on the horizon & BJ traditionally follows on this front one year later. WMT’s investments in fresh quality, private label, & price position it well to take further market share across the income spectrum.”
Morgan Stanley upgrades Marathon Oil to overweight from neutral
Morgan Stanley said Marathon Oil has “peer-leading FCF and shareholder returns.”
“Accretion from the recently closed Ensign transaction helps offset some of the impacts from lower commodity prices, supporting peer-leading FCF and shareholder returns.”
Baird downgrades Peloton to neutral from overweight
Baird said in its downgrade of the stock that it’s taking a more cautious view.
“PTON has been an extremely challenging call down substantially from early-2021 highs as demand pull-forward and poor execution have become more clear.”
Bernstein downgrades Lululemon to underperform from market perform
Bernstein said in its downgrade ofLululemonthat the company has a “reset” coming.
“Now, with no more pent-up demand, a more cautious consumer outlook, and negative margin mix shifts, earnings growth will decelerate materially and we expect the multiple to follow.”
Piper Sandler reiterates Tesla as overweight
Piper said its checks show thatTesladelivery wait times have not picked up significantly.
“We note that wait times ticked up very slightly in Germany over the weekend, which is the first up-tick in many months, but beyond this, we haven’t noticed a major inflection in wait times.”
Morgan Stanley reiterates Ford as overweight
Morgan Stanley said it sees an opportunity for Ford to “to exercise its self-help muscle.”
“A deterioration in auto industry conditions for 2023 (lower price/mix, rising rates, unfulfilled tech bets) necessitates a fresh look at structural costs and the ability to fund loss-making projects. We see an opportunity for Ford to exercise its self-help muscle.”
Wells Fargo reiterates Disney as overweight
Wells said it likes Disney’s setup into earnings on Feb. 8.
“We expect Bob Iger’s first public call since returning as CEO to be action packed. With a proxy battle looming, management’s best avenue to defend against activism is a higher stock price.”
Wells Fargo initiates Chipotle and Starbucks as overweight
Wells said both stocks are levered to a recovery.
“Our SBUXests are above-Street through ’25 behind return to office gains domestically, an NT China recovery and underappreciated white space; CMG sentiment appears mixed, short interest is up, P/E is -30% vs. historical; we see LT growth levers & traffic fears overblown.”
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