Here are Thursday’s biggest calls on Wall Street:
Credit Suisse downgrades Danaher to neutral from outperform
Credit Suisse said in its downgrade of the science and tech company that it sees “bioprocessing inventory” pressure.
“We are downgrading Danaher from Outperform to Neutral as we believe its relative exposure to bioprocessing inventory reductions and diagnostics could pressure its growth relative to peers.”
Credit Suisse upgrades CME to outperform from neutral
Credit Suisse said the global markets company is a defensive play.
“We are upgrading CBOE and CME to Outperform from Neutral owing the firm’s defensive prospects and potential to grow derivatives volumes.”
D.A. Davidson initiates Microsoft as buy
D.A. Davidson said Microsoft is well positioned for a downturn.
“We believe MSFT is at least as well positioned as the others to weather an economic downturn, given the mission critical nature of its products and lower levels of past pull-forward into 2021-22.”
Barclays names Starbucks a top 2023 pick
Barclays said the coffee giant is a “best-in-class” stock for 2023.
“We continue to view Starbucks as a premier, large cap, high growth, global consumer company, with a dominant US retail & consumer product platform, significant international growth led by China, and a best-in-class digital platform.”
UBS names Chipotle a top 2023 pick
UBS said the Mexican chain restaurant is defensive in a “tough macro.”
“CMG looks positioned for above avg resiliency in a tough macro.”
Mizuho reiterates Tesla as buy
Mizuho lowered its price target on the stock to $250 per share from $285 after the company’s delivery numbers earlier this week, but said it’s sticking with its buy rating.
“While we continue to see TSLA as a long-term global EV leader with vertical integration, strong profit margins versus newer EV incumbents, we also see headwinds to the consumer and discretionary spending.”
Stephens downgrades American Express to underweight from equal weight
Stephens said it’s concerned about the company’s exposure to a downturn.
“However, with Amex experiencing the fastest loan growth among Cards through the pandemic, as well as large commercial exposures and increased Millennial concentrations makes us think Amex is more sensitive to a downturn than peers.”
Goldman Sachs names American Express a top pick in 2023
Goldman said it sees an upside to estimates for the credit card company in 2023.
“For AXP,we see a top-line beat in 2023 (both NII and fees) while consensus seems to be modeling greater reserve build than we expect to come through.”
Bank of America reiterates Disney as buy
Bank of America said it’s standing by its buy rating on the stock but that the company needs to focus on a “strategic vision.”
“We believe priority number one for Bob Iger will beDisneyMedia and Entertainment (DMED) and the structure of the content division (vs Bob Chapek’s restructuring in 2020 that consolidated all content under Distribution). In addition, there is likely to be a significant focus on cost containment.
Bank of America downgrades PNC to underperform from neutral
Bank of America said shares of PNC are trading at a premium.
“We believe that the stock’s premium valuation more than adequately reflects the superior EPS defensibility. The shares are trading at 11.1x our revised 2023e EPS vs. 9.6x median for super regional banks.”
Cowen downgrades Coinbase to market perform from outperform
Cowen said in its downgrade of the crypto company that it has low visibility right now.
“We are downgrading COIN today to Market Perform (2), reducing 2023 revenue and adj. EBITDA estimates below Street, and lowering our price target from $75 to $36.”
BMO initiates AstraZeneca as outperform
BMO said it likes the biopharma company’s diverse array of products.
“We are initiating coverage of AstraZeneca with an Outperform rating and $82 target price. AZN is a leader in pharmaceutical drug development buoyed by its diverse portfolio of products in Oncology, Rare Disease, and Biopharmaceutical segments.”
Bernstein names Nvidia and Qualcomm as top 2023 picks
Bernstein said in its semis outlook Thursday that it likes stocks that can “play off” the bottom.
“In the current environment we would hence be looking for names that have cut, and where there is a strong secular story that can play off that bottom; NVDA, QCOM, and AMD come to mind, as well as, potentially, semicap (all rated OP).”
Bank of America downgrades Ally Financial to underperform from buy
Bank of America said Ally is most exposed to auto loans.
“Auto loan delinquencies have gradually been increasing since summer of ’21 across the credit spectrum;
Goldman Sachs names Bank of America and Wells Fargo as top picks
Goldman named several large-cap banks as top picks and said they’ll generate strong return on equity in 2023.
“Both WFC and BAC should continue to post the best NII (net interest income) trends given their industry leading deposit franchises, suggesting that they will be among the last banks in the industry to become liability sensitive.”
Mizuho names Meta and Uber top 2023 picks
Mizuho named Meta and Uber as top picks for 2023 and said it likes company’s with the ” lowest risk of downward revisions.”
“We recommend investors to play defense in US internet, choosing companies with the lowest risk of downward revisions and aggressive cost-cutting plans. Our top US picks are META and UBER.”
Piper Sandler downgrades Nordstrom to neutral from overweight
Piper Sandler said it sees earnings pressure for Nordstrom in 2023.
“Despite a difficult 2022 for our coverage (-60% simple avg vs -20% for the S&P 500), we believe there may be continued earnings pressure in 1H23 given a still volatile consumer spending environment and elevated inventory levels.”
Jefferies upgrades Oracle to buy from hold
Jefferies said in its upgrade of the stock that it has its “mojo back.”
“ORCL— Got their mojo back, upgrade to Buy. We like the reacceleration growth theme, focus on expense scrutiny and cheap multiple. Tactical pick for value investors.”
Oppenheimer names McDonald’s a top 2023 pick
Oppenheimer said the fast food chain is an “attractive defensive play.”
“MCD remains an attractive defensive play, and we anticipate measurable earnings upside regardless of the economic environment.”
Oppenheimer downgrades Wendy’s to perform from outperform
Oppenheimer said in its downgrade of the stock it sees a more balanced risk reward.
“WEN shares have gained +40% since a 13D filing on 5/24/22 by Trian Management (vs S&P’s -2.2%), and our updated analysis suggests the stock’s risk/reward and valuation are now fairly balanced.”
Jefferies downgrades CrowdStrike to hold from buy
Jefferies said it’s concerned about challenging fundamentals for the cyber security company in 2023.
“While we continue to view CRWD very positively in Endpoint and expect CRWD to take share, the upside to cons will be less in 2023. ”
UBS downgrades Victoria’s Secret and Gap to sell from hold
UBS said in its downgrade of Victoria’s Secret and Gap that the market is underestimating the pressure on industry sales.
“Earnings and P/E Pressure Ahead - Stay Bearish.”
Bank of America reiterates Amazon as buy
Bank of America said Amazon layoffs are “not a positive signal, but good for sentiment.”
“The increase in total layoffs by 8k could be a cautious sign for holiday sales, but Amazon did indicate additional layoffs were being considered in November.”
Argus upgrades Delta to buy from hold
Argus upgrades Delta on a continuing travel recovery.
“In 2023, we expect demand for leisure travel to remain strong and look for business travel to surpass 2019 levels.”
Bernstein downgrades Tapestry to market perform from outperform
Bernstein downgraded the owner of Coach and Kate Spade due to softer estimate concerns.
“Tapestry has beaten the market and sector in 2022, and it’s time to downgrade TPR to Market-Perform on softer 2023 estimates.”
Truist upgrades Comcast to buy from hold
Truist said in its upgrade of Comcast that it sees re-accelerating growth in 2023.
“These two were the worst performing large-cap stocks in our coverage universe in 2022 as investors recognized broadband flow share trends fundamentally changed, but we believe efforts to stem the erosion are proving successful and should once again cause the stocks to trade at traditional premiums to telecom stocks.”
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