Here are Tuesday’s biggest calls on Wall Street:
UBS reiterates Apple as buy
UBS said Apple’s iPhone supply chain headwinds are abating.
“Utilizing UBS Evidence Lab data that tracks iPhone availability across 30 countries, wait times across most markets including the US and China improved relative to both last week and two weeks ago indicating the supply chain disruptions are easing on the margin.”
Cowen reiterates TJX Company as outperform
Cowen said it’s feeling more bullish on the stock after a series of recent management meetings.
“We left meetings more bullish onTJX’sscale within the global retail ecosystem. TJX’s opportunities across apparel, footwear, accessories, home, beauty, and kids are increasing.”
Piper Sandler reiterates Tesla as outperform
Piper said reports of Tesla cutting production in China are mostly overdone.
“If Tesla does eventually decide to cut production, we think macro headwinds and a new factory in Berlin will be to blame, NOT competition from Chinese peers.”
JPMorgan downgrades Royal Caribbean to underweight from overweight
JPMorgan said the cruise company that is “vulnerable.”
“To this end, we prefer NCLH to CCL and RCL, as we see the latter two — particularly RCL — as more vulnerable to near-term ebbs and flows of financial market conditions given the magnitude and timing of future capital commitments.”
Bank of America reiterates Chipotle as buy
Bank of America said the Mexican chain restaurant has “price elasticity.”
“We maintain our Buy rating as we believe underlying frequency trends auger well for the future: we expect lower income consumers who have traded-out (to at home) should come back when economic conditions improve even as the company retains the higher income consumers who have traded down intoChipotlefrom full service concepts.”
Oppenheimer upgrades General Electric to outperform from market perform
Oppenheimer said it’s starting to see strong execution from GE.
“Our Outperform rating reflects strong Aviation momentum along industry recovery path, with strong execution amidst widespread industry supply-chain challenges impacting the commercial business and internal production challenges serving military markets.”
Citi opens a negative catalyst watch on Charter
Citi added a negative catalyst watch heading into the company’s analyst day.
“We remain Neutral on CHTR shares and believe the upcoming analyst meeting could highlight that financial performance may need to take a step back vs. consensus expectations in 2023 to eventually take two steps forward with an enhanced broadband network experience.”
Bank of America adds Burlington to the US1 list
Bank of America added Burlington to the firm’s top picks list.
“The US 1 list is intended to represent a collection of our best investment ideas that are drawn from the universe of Buy-rated, US-listed stocks (including ADRs), covered by BofA Global Research fundamental equity research analysts.”
Morgan Stanley upgrades JPMorgan to overweight from underweight
Morgan Stanley said in its double upgrade of the banking giant that it has “multiple resiliency” in a recession.
“With this note, we double upgradeJPMto Overweight from Underweight on operating leverage inflecting positively, CCB (JPM’s Consumer & Community Bank) taking market share, relative multiple resiliency during recessions, and progress being made on higher CET1 (common equity tier) ratio regulatory requirements.”
Bernstein initiates Target and Costco as outperform
Bernstein said Target is “great value on a long-term winner. The firm called Costco a “much coveted port in the storm.”
“Target is perhaps one of the best-positioned retailers for long-term growth: They’ve seen massive traffic gains since Covid that we believe are going to stick. ... .Costco has long been a reliable, if perhaps boring deliverer of routinely solid business results, stock gains that consistently beat the S&P, and a premium P/E — both absolute and relative.”
RBC initiates Valvoline as outperform
RBC said the auto oil change company is a high-margin business.
“Following the sale of its global products division (expected to close in the next few weeks), we think VVV will be a faster growing, higher margin business, with strong FCF generation.”
BMO downgrades SL Green Realty to market perform from outperform
BMO downgraded the real estate investment trust company due to demand uncertainty.
“We downgrade SLG to Market Perform, post its 2022 Investor Conference. SLG’s 12.9% dividend cut was a prudent move, in our view, although it may have to supplement its common with a special dividend in 2023, due to dispositions.”
William Blair names Starbucks a top 2023 pick
William Blair said it sees “topline momentum” for the coffee giant heading into next year.
“We believe Starbucks is well positioned to deliver both earnings and sales upside over the next year given ongoing topline momentum despite consumer fragility in many parts of the world, with recent healthy double-digit comps in all major regions of the world except China—including accelerating trends in the United States and ongoing strength in regions of greater consumer pressure such as Europe.”
Bernstein reiterates Alphabet as outperform
Bernstein said in its analysis of Alphabet that margins can go higher.
“In our optimistic case, we can see a path to 34% operating margins in 2025 which could be worth an extra $2 in EPS.”
Raymond James reiterates Coinbase as underperform
Raymond James said it’s standing by its underperform rating as there’s too much uncertainty for the crypto company.
“We believe Coinbase’s relative success can be attributed to its position as a trusted, regulated U.S. based exchange. That said, one could argue that this is akin to being viewed as the best house in a bad and deteriorating neighborhood.”
Deutsche Bank upgrades Estee Lauder to buy from hold
Deutsche said in its upgrade of the stock that it sees “makeup margin expansion.”
“We are upgrading EL to Buy given increased likelihood of China reopening by the start of EL’s FY24 and increased confidence in makeup margin expansion.”
Citi initiates Xponential Fitness as buy
Citi said the owner of fitness brands like Pure Barre is defensive.
“XPOF has carved out a defensible and profitable position as the industry leader in the boutique fitness space. The company’s asset-light franchise model allows for quick scaling of the business, with recurring revenues buffering the downside in the event of a recession.”
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