Here are the biggest calls on Wall Street on Tuesday:
Bank of America reiterates Apple as neutral
Bank of America said China remains a risk for Apple.
“China has been a 20%+ contributor to Apple’s revenues and while competitive risks are increasing, we also note the sale of wearables (Watch and AirPods) has created a stickier ecosystem in China, which is helping to overcome some of the challenges associated with a traditionally less sticky ecosystem.”
Bernstein reiterates Tesla as underperform
Bernstein said shares of the automaker are still overvalued.
“We continue to believe that Tesla is a car company, and that the competitive nature of the auto industry (which is becoming increasingly competitive and global) will make it difficult for any player to have a sustained cost or profitability advantage.”
Goldman Sachs reiterates Nvidia as buy
Goldman said reports on Monday that Nvidia would partner with Arm to make chips would prove a positive for Nvidia shares.
“On 10/23, during market hours, Reuters reported that Nvidia and AMD could begin shipping Arm-based PC CPUs as soon as 2025.”
Goldman Sachs reiterates Microsoft as buy
Goldman said it’s bullish on the stock heading into earnings after the bell on Tuesday.
“Going into the print, we reiterate our Buy rating and $400 PT as we expect Microsoft to report solid results vs our estimates of +9% revenue growth, 25%/26% Azure growth (in USD/CC), and EPS of $2.58.”
UBS downgrades Regions to neutral from buy
UBS said the Birmingham, Alabama-based regional bank is going into the “penalty box.”
“It is always difficult to downgrade a stock that has already been hammered ~13% over the past few days since reporting. But in a market where investors have razor thin patience for bank stocks and macro trends aren’t in favor of multiple expansion, we think it is difficult for the market to re-rate any stock with company-specific disappointments - like we saw at RF.”
Stifel upgrades Ingersoll Rand to buy from hold
Stifel said shares are very “compelling” right now.
“We view the recent pullback in IR shares, the expected improvement in U.S. and global short-cycle industrial demand, and Stifel’s Chief Equity Strategist expectation for cyclical value to outperform, as creating an attractive entry point for investors in this high quality industrial name and so are raising our rating to Buy.”
DA Davidson upgrades Braze to buy from neutral
DA said shares of the cloud-based software company will benefit from “resilient growth.”
“We view BRZE’s resilient growth, in a tough spend environment, upcoming crossover into profitability and relative valuation as key reasons to own BRZE ahead of a similarly challenging CY24.”
Needham initiates Lattice Semiconductor as buy
Needham said in its initiation of the semiconductor company that it’s bullish on the stock.
“While Lattice is not immune to macroeconomic challenges, we believe the company has managed distributor inventory well and expect the company to keep the channel clear into CY24.”
MoffettNathanson upgrades DraftKings to outperform from market perform
Moffett said in its upgrade of the gaming company that it has robust conviction in the stock.
“Our conviction in the DraftKings story is stronger than ever. As such, we upgrade DraftKings from Neutral to Buy with an increased price target of $37 (+$6 higher), which is 31% above the current share price.”
Piper Sandler upgrades American Express to neutral from underweight
Piper said in its upgrade of the credit card issuer that the bottom is likely in.
“We are upgrading AXP to Neutral from Underweight and adjust our price target to $151 from $150 following 3Q23 earnings.”
Piper Sandler downgrades Monster to neutral from overweight
Piper said in its downgrade of Monster that it had previously been just “wrong.”
“When we upgraded to Overweight in August, MNST had modest U.S. measured retail sales growth acceleration and Bang looked like an attractive acquisition, but we were wrong about both.”
Redburn Atlantic Equities initiates On Holding as buy
Redburn said in its initiation of the shoe company that On is a “rare asset.”
“From a standing start in 2010 to approaching $2bn of sales, it has become a discernible brand competing effectively with the best. This speaks to the ability to execute alongside retention of the entrepreneurial spirit and relentless innovation focus.”
Loop initiates Trade Desk as buy
Loop said the ad tech company is one of the top growth stories.
“We view The Trade Desk as one of the best long-term growth opportunities available to technology and media investors today.”
Morgan Stanley reiterates Amazon as overweight
Morgan Stanley said Amazon is a top pick heading into earnings later this week.
“Near-term, we think the set-up into AMZN’s 3Q23 print is positive, with expected upward revisions to forward EBIT estimates driven by durable strength in topline retail sales as AMZN gains share of retail at its highest pace since pre-Covid...”
Wells Fargo initiates Public Storage as overweight
Wells initiated the storage company and says it’s a favorite name in the sector.
“PSA is our top pick in the sector, as we believe (a) 2023 guidance appears achievable, (b) its balance sheet/liquidity stacks up favorably vs. peers; and (c) its large pool of lease-up properties provides outsized growth.”
Seaport initiates Amazon, Meta and Alphabet as buy
Seaport initiated Amazon, Meta and Alphabet on Tuesday, saying it sees further upside for all three.
“We are constructive on the long-term growth of the sector though revenue growth is generally mixed across the sector with some companies still recovering from the pandemic while others are facing tougher comps. Additionally, macro concerns remain over a weakening consumer (e.g. higher interest rates) and geopolitical concerns.”
Baird names Planet Fitness a fresh pick
Baird said it sees compelling upside for Planet Fitness shares.
“We separately have added a Bullish Fresh Pick to PLNT based on our view that sentiment already reflects uncertainty tied to recent developments supporting potential for compelling upside if the current leadership can make necessary changes to improve unit economics to position for a re-acceleration in growth beginning 2025E.”
KeyBanc initiates Criteo as buy
KeyBanc said it sees multiple expansion for the ad tech company.
“We believe Criteo’s model transition and AdTech sector volatility has masked the Company’s progress in Retail Media.
Barclays upgrades Rio Tinto to overweight from equal weight
Barclays said in its upgrade of the metals and mining company that shares are very attractive.
“Upgrade Rio Tinto to Overweight – seasonality, consensus and valuation all supportive.”
Morgan Stanley downgrades FMC Corp. to equal weight from overweight
Morgan Stanley said in its downgrade of the chemical manufacturer that it sees slowing sales growth for FMC.
“Downgrade to Equal-weight as severity of sales/EBITDA rebase resets risk/reward balance and no longer provides suitable base case upside for an Overweight rating.”
JPMorgan upgrades PVH to overweight from equal weight
JPMorgan said in its upgrade of the owner of brands like Tommy Hilfiger that it sees margin expansion ahead for PVH.
“Supporting a multi-year brand unlock in which CEO Larsson (appointed in Feb 21) is focused on driving increased desirability of the Calvin Klein and Tommy Hilfiger brands.”
Daiwa downgrades Enphase Energy to neutral from buy
Daiwa downgraded the solar company due to slowing growth.
“We downgrade ENPH to a 3/neutral as inventory destocking continues longer than expected and growth drivers slow into 2024.”
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