Here are Monday’s biggest calls on Wall Street:
Citi opens a negative catalyst watch on Estee Lauder
Citi opened a negative catalyst watch on the stock and said it’s cautious heading into earnings in late August.
“At EL, we are opening a 90-day negative catalyst watch as we expect below consensus initial FY′24 guidance. While that is somewhat anticipated by the market, we don’t believe investors will view a low guidance as conservative given large cuts over the last two years.”
Wells Fargo downgrades Fox to underweight from equal weight
Wells downgraded the stock due to continues cord cutting risks.
“FOXA’s earnings are mostly Fox News earnings, and Fox News is facing viewership and share pressures. With ecosystem risks also elevated we find our estimate outlook more negative and below the Street. We downgrade to Underweight.”
Loop downgrades Aaron’s to neutral from buy
Loop downgraded Aaron’s on fundamentals and valuation.
“While our downgrade is primarily based on valuation, we do have some fundamental concerns given the dramatic pandemic-driven demand pull forwards in furniture, appliances, and consumer electronics, as well as the ongoing BrandsMart integration.”
Morgan Stanley upgrades Shockwave Medical to overweight from equal weight
Morgan Stanley said shares of the cardiovascular medical device company are well positioned.
“We expect a solid improvement in reimbursement to leave street growth expectations for 2024/25 as too low, and with plenty of catalysts, we think SWAV shares are well placed.”
Goldman Sachs reiterates Nvidia as buy
Goldman raised its price target on the stock to $495 per share from $440 and said it’s in a “new phase of growth.”
“Supported by its competitive moat founded on consistent investments in hardware and software, Nvidia has been a key enabler and beneficiary of traditional AI for nearly a decade. The recent step-function increase in the company’s Data Center revenue outlook, however, suggests that the company has entered a new phase of growth driven by the emergence and proliferation of Generative AI.”
KBW upgrades BlackRock to outperform from market perform
KBW said the asset management company is “delivering good consistent organic growth and profitability.”
“We are upgrading BlackRock (BLK) to Outperform from Market Perform. BLK is delivering good consistent organic growth and profitability.”
Bank of America reiterates Amazon as buy
Bank of America said it’s bullish heading into Amazon’s Prime day on Tuesday.
“Based on our projection for $162bn in 3Q′23e Amazon GMV (gross margin value), we estimate Prime Day could represent 7.4% of GMV for the quarter (up slightly from 7.2% last year).”
Jefferies reiterates Tesla as hold
Jefferies raised its price target on Tesla to $265 per share from $185 but said it’s standing by its hold rating.
“We join a consensus view that Q2 will be a trough in auto gross margin. We value Tesla first as a superior-ROIC, software-enhanced, manufacturer but recent developments also suggest a shift in valuation drivers, with Tesla’s early focus on AI-based autonomy standing out, notably in terms of scalability.”
UBS reiterates Disney as buy
UBS said it’s cautious heading into Disney earnings in early August, but it’s sticking with its buy rating.
“We expect F3Q to show continued pressure in advertising/linear OI (operating income), slightly higher DTC dilution and mixed Parks results.”
Morgan Stanley reiterates Netflix as equal weight
Morgan Stanley raised its price target on the stock to $450 per share from $350 and said the risk/reward for Netflix is balanced.
“A year ago, nothing was priced in for either paid sharing or the ad-tier as shares traded at ~13x ’24E consensus EPS. Today, at ~30x, much is expected. We raise estimates and our PT to reflect our higher expectations and competitor withdrawal, but see a balanced risk/reward here.”
JPMorgan initiates Cava as overweight
JPMorgan said it’s long-term bullish on the Mediterranean fast food restaurant.
“After the company’s June 14th IPO priced at $22, shares are now 80% above the initial offering price but we believe still have room to grow. We agree with the market’s implicit positive view on the medium/long- term story of CAVA.”
Morgan Stanley reiterates Rivian as overweight
Morgan Stanley said it’s standing by its buy rating on the electric vehicle company.
“Rivian shares are up >80% in the past 2 weeks on high volume, taking the stock over its 200 day moving average and beyond our $24 price target. The rally appears driven by a mix of fundamental and technical forces.”
Evercore ISI reiterates Apple as outperform
Evercore said gaming is dragging on App Store growth but that it’s sticking with its outperform rating Apple shares.
“App Store revenue grew 3% in June, which brings the growth rate to -1% for the June-qtr. Weakness continues to be driven by the gaming market.”
Bank of America upgrades SEE and Weyerhaeuser to buy from neutral
Bank of America upgraded the company formerly known as Sealed Air and said it sees an attractive entry point. The firm also upgraded Weyerhaeuser and says it likes the company’s housing exposure.
“SEE faces volume headwinds in protective packaging (i.e., bubble wrap) and food (i.e., protein/meat bag) but the stock is already at multi-year relative lows. Our upgrade of wood products and timber company WY adds housing exposure in a risk-averse way given the value of timberlands.”
Stifel reiterates ServiceNow as buy
Stifel raised its price target on the stock to $600 per share from $525 and said it’s getting more bullish on the stock.
“Net/net, we expect that ServiceNow’s expanding platform, growing pipeline, and large deal momentum should enable the company to maintain 20%+ revenue growth and margin expansion in coming years.”
UBS reiterates Yum! Brands as buy
UBS said the stock is a high-quality compounder.
“We think less favorable investor positioning can create an opportunity for shares over time, and believe YUM should remain a core holding as a quality compounder supported by contributions from key drivers, incl. Taco Bell strength & KFC Int’l growth consistency.”
Oppenheimer reiterates Domino’s as outperform
Oppenheimer raised its price target on the stock to $400 per share from $375 and said it sees an attractive risk/reward.
“Following a deep-dive analysis, we believe DPZ now represents an actionable idea with a more attractive risk/reward for rest of year.”
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