Here are Monday’s biggest calls on Wall Street:
Goldman Sachs upgrades Chevron to buy from neutral
Goldman said it sees a cash flow inflection for the oil and gas giant.
“We upgrade Chevron from Neutral to Buy on (a) leading capital returns; (b) clear inflection in cash flow in 2024 and volumes in 2025; and (c) relative valuation, particularly in 2025.”
Bernstein reiterates Nvidia as outperform
Bernstein said it’s standing by its outperform rating on the stock.
“We believe that NVDA and other AI infrastructure hardware vendors offer the most near term upside potential, but carry the most risk of an overbuild.”
Morgan Stanley names Keurig Dr Pepper a top pick
Morgan Stanley said the beverage giant is its new top pick.
“Our most significant change is doubling down on our recent upgrade to OW at KDP by moving it to our top pick in beverages, and we are moving down STZ both as our favorite name in beverages after recent striking stock outperformance with the stock up 31% from its January bottom and at an all-time high.”
Jefferies downgrades Carvana to underperform from hold
Jefferies said there’s still a “rough road ahead” for the used car seller.
“We are downgrading to Underperform and lowering our PT to $30, as cons downside could resurface concerns about the viability CVNA’s business model.”
TD Cowen upgrades GoodRX to outperform from market perform
TD said the company’s partnership with pharmacy benefit managers is a game changer.
“We upgrade GDRX to Outperform from Market Perform, as we believe GDRX’s PBM partnerships not only generate a new LT revenue stream, but integrates GDRX into the health care ecosystem.”
Piper Sandler reiterates Apple as overweight
Piper raised its price target on the stock to $220 per share from $180 and said it’s standing by its overweight rating.
“We feel that Apple is well positioned going into the print and guide next week and that generally speaking, the China handset concerns for Apple are a bit overblown.”
Morgan Stanley reiterates Walmart as overweight
Morgan Stanley said Walmart+ continues grow and gain new members.
“Latest survey points to ~21m Walmart+ members (~16.5% household penetration), similar to our prior survey and near a record high. ”
JPMorgan downgrades Penske to underweight from neutral
JPMorgan said earnings are starting to normalize for the transportation company.
“PAG’s execution has been undeniably strong across all aspects of the business along with significant de-leveraging of the balance sheet since the pandemic and shares have outperformed (+80% last 24 months vs peers +10%) as a result.”
Bank of America upgrades Hasbro to buy from neutral
Bank of America said it’s bullish heading into earnings later this week.
“We’re upgrading Hasbro from Neutral to Buy ahead of the company’s 2Q earnings call on Thursday, August 3rd. We expect Hasbro will report an earnings beat given strong demand for The Lord of the Rings Magic set which released in late June.”
Deutsche Bank upgrades New York Community Banc to buy from hold
Deutsche said it likes the regional bank’s execution.
“Continued execution on the transformation of the business model has been strong leading into 2Q earnings, and the clarity on both a solid expense outlook and further growth opportunities from the private client team additions post earnings, should generate strong earnings growth which lead us to upgrading NYCB shares to BUY.”
Jefferies downgrades Ford to hold from buy
Jefferies downgraded the automaker due to worsening electric vehicle losses.
“Ford cut back to Hold on worse EV losses and strategic wobble.”
RBC downgrades CSX to sector perform from outperform
RBC downgraded the railroad company mainly on valuation.
“CSX has been operating fluidly in recent quarters, which has translated into business wins and solid results.”
Oppenheimer downgrades General Electric to perform from outperform
Oppenheimer downgraded the stock mainly on valuation.
“GE delivered a broad-based beat/raise. Downgrade to Perform, based on shares at/+ our target multiples. GE shares are +35% since our 12/5/22 upgrade (vs. S&P +15%); 65% returns including value of 80.1% of GEHC shares spun to GE shareholders.”
Bernstein downgrades Southwest to market perform from outperform
Bernstein said in its downgrade of the stock that it has “lost confidence.”
“We have lost confidence in the earnings trajectory of LUV as margin recovery is lower than expected with no clear-cut exit out of near term headwinds. Downgrading to Market-Perform.”
Evercore ISI reiterates Amazon as outperform
Evercore said it’s standing by Amazon heading into earnings later this week.
“AMZN is one of our Top Picks in Large Cap. We continue to see an attractive set-up on the stock based on our Triple Trough Thesis (trough multiple, trough margin, and trough revenue growth).”
Piper Sandler upgrades Sweetgreen to overweight from neutral
Piper said the tide may be turning for the fast casual restaurant company.
“While it has been ‘tough sledding’ thus far for SG as a public company, we think the tide may be turning here a bit, and we’d advise positioning for what we expect will be a meaningful improvement in sentiment in the coming months.”
Piper Sandler upgrades Wayfair to overweight from neutral
Piper said it sees numerous positive catalysts ahead for Wayfair.
“Additionally, Wayfair is on the cusp of driving sustained EBITDA profitability, and we expect the company’s Investor Day on August 10th will provide investors with greater long-term confidence on profitability outlook.”
Credit Suisse downgrades UPS to neutral from outperform
Credit Suisse said it’s concerned about the recent labor wage increases.
“We were relieved to see UPS reach an agreement with its union this week, thus averting a strike (final vote remains outstanding). Nevertheless, the Teamsters appear to have secured rather large wage increases, which we expect will be a drag on UPS earnings in the year ahead.”
Morgan Stanley downgrades Salesforce to equal weight from overweight
Morgan Stanley said positive catalysts are in the “rear-view mirror” for the stock.
“While confident in Salesforce’s longer-term opportunity to further penetrate large enterprises with more vertically oriented solutions, near-term catalysts, including margin expansion and price increases, are now in rear-view mirror.”
Morgan Stanley upgrades Adobe to overweight from equal weight
Morgan Stanley said in its upgrade of Adobe that it sees generative AI driving creativity.
“A return to mid/high-teens EPS growth over the next 3 years warrants upside to the multiple & price target, supporting our upgrade to Overweight.”
Barclays reiterates Tesla as equal weight
Barclays said Tesla should not be dismissed in the battle for electric vehicle trucks.
“In short, we believe that the EV truck market is likely to remain niche for the time being, with the Detroit 3 (D3) likely to hold a moat around the pickup market, including in EV trucks. However, we believe that competitive threats from TSLA and Rivian should not be discounted.”
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