Here are Monday’s biggest calls on Wall Street:
Deutsche Bank downgrades Arm to hold from buy
Deutsche downgraded the stock mainly on valuation.
“On our downgrade of ARM to a Hold rating (raising P/T to $70) as we believe the co’s attractive growth potential and unique business model are fairly valued after its post IPO rally of nearly +40% leaves valuation at ~41x our CY25E EPS.”
Goldman Sachs downgrades SolarEdge to sell from neutral
Goldman said in its downgrade of the stock that the recovery is still too soon.
“SEDG (down to Sell): EU recovery still early innings and margin uncertainty leaves more downside risk to EPS.”
Goldman Sachs upgrades Sunnova to buy from neutral
Goldman said in its upgrade of the solar company that the stock is near an inflection point.
“NOVA (up to Buy): Resi recovery story with attractive end markets set to inflect faster (e.g. non-CA, Puerto Rico).”
Guggenheim upgrades Snap to buy from neutral
Guggenheim said the stock is “positioned for outperformance.”
“We are raising our rating on SNAP shares to BUY from NEUTRAL and our 2024 price target to $23 from $9, implying a 35% 12-month return.”
Goldman Sachs downgrades Nokia to neutral from buy
Goldman saidit sees “unfavorable vendor shifts” for Nokia.
“We downgrade Nokia to Neutral (from Buy), given our lowered confidence in Nokia’s product roadmap and competitive positioning following the recent announcement where AT&T stated that it no longer plans to use Nokia in its future wireless deployments as the carrier aims to switch to ORAN based networks.”
Wolfe upgrades Salesforce to outperform from peer perform
Wolfe said it sees double-digit growth for Salesforce.
“As a result, we are upgrading CRM to Outperform with a $315 PT which represents 25x CY25 EV/FCF (22.5x on our upside numbers) which we believe is appropriate for CRM’s ability to grow top line by double digits and FCF per share ~20%.
Jefferies upgrades Equifax to buy from hold
Jefferies said the stock is underappreciated.
“We upgrade EFX to Buy from Hold on what we believe to be underappreciated long-term dynamics.”
Bernstein reiterates Nvidia and Broadcom as outperform
Bernstein said Nvidia and Broadcom remain the firm’s favorite ideas in 2024.
“AVGO is benefiting from a robust AI story that bridges a nearer-term core slowdown as well as significant VMware accretion on the way. And NVDA is still the best way to play AI, with numbers appear set to continue inflecting higher, and valuation that is becoming extremely attractive.”
JMP downgrades Shopify to market perform from market outperform
JMP said in its downgrade of the stock that its waiting for a more attractive valuation.
“We downgrade Shopify to Market Perform from Market Outperform as shares are near our prior $80 price target, while our fine-tuned model now projects 2025 adjusted operating income to be 7% below consensus.”
Morgan Stanley downgrades Affirm to underweight from equal weight
Morgan Stanley said in its downgrade of the fin tech company that Affirm’s valuation is too tough right now.
“After +79% appreciation over the last month and +383% YTD, risk-reward appears skewed to the downside at current levels even with pending strength through a seasonally strong holiday period. Valuation seems difficult to justify across all metrics.”
Evercore ISI names Amazon a top 2024 pick
Evercore says Amazon is well positioned for 2024.
“Global market share leader in both Retail & Cloud and now top 3 provider in Online Advertising.”
Seaport downgrades Roku to sell from neutral
Seaport downgraded Roku mainly on valuation.
“Downgrading to Sell from Neutral, $75 PT -- Growth opportunities maturing, tough to justify valuation.”
Morgan Stanley downgrades Exelon to equal weight from overweight
Morgan Stanley downgraded the utility company and says it sees too much uncertainty for Exelon.
“With ~7% upside and regulatory/earnings uncertainty we are downgrading the stock to EW from OW.”
JPMorgan upgrades Prologis to overweight from neutral
JPMorgan upgraded the real estate investment trust logistics company and says it likes its growth prospects.
“We are raising our rating on PLD from Neutral to Overweight. Our more constructive stance on the stock is being driven by a variety of items tied to PLDs relative growth prospects.
Barclays reiterates Tesla as equal weight
Barclays says the stock faces many near-term challenges on fundamentals.
“Overall, while we continue to see Tesla as a long-term winner in the global EV transition, we nevertheless believe the company is facing relative challenges on near-term fundamentals.
Raymond James downgrades Palo Alto Networks to market perform from outperform
Raymond James downgraded the stock mainly on valuation.
“We are downgrading PANW to Market Perform from Outperform. Since May 2021, a period when PANW had underperformed peers, but our work suggested an upcoming period of broader platform sales with larger deal sizes that we thought would ultimately lead to a period of healthy growth and incremental profitability.”
Raymond James upgrades Check Point to outperform from market perform
Raymond James said it sees an acceleration in growth for the software company.
“We are upgrading CHKP to Outperform from Market Perform and introducing our 2025 estimates. While we understand investor skepticism regarding the longer term business trajectory, we continue to focus on the stock, and this tactical call is reminiscent of our call in Jan 2022 followed by our subsequent move in April 2023.”
Deutsche Banks names KKR as top ideas in 2024
Deutsche said KKR and Charles Schwab are two of the firm’s top ideas in 2024.
“For calendar 2024, our top pick overall is KKR (KKR-Buy) within the alternative managers.”
Wells Fargo upgrades Progressive to overweight from equal weight
Wells said the auto insurer is working on getting back to growth.
“PGR saw PIF [policies in force] continue to decline sequentially in November as PGR is set on meeting its 96% combined ratio target for the year.
JPMorgan upgrades Bank of New York Mellon to overweight from equal weight
JPMorgan said the bank has an attractive valuation.
“Hence US servicing deposits should see faster decline in rates with rate cuts which should benefit Bank of New York and State Street relatively more.”
BMO upgrades Tronox to outperform from market perform
BMO said the stock is at an inflection point for the chemicals company.
“We are raising TROX to OP with a $18 TP. We expect 2024 will mark the inflection point for TROX with the end of destocking and at least modestly improving demand for the industry and potentially more for Western producers.”
Deutsche Bank downgrades M&T Bank to hold from buy
Deutsche said it sees a lack of near-term catalysts for the bank.
“We are downgrading MTB from BUY to HOLD given strong relative stock performance ytd (and in 2022) and as further meaningful outperformance in the near/medium term seems unlikely.”
Morgan Stanley downgrades Liberty Formula One to equal weight from overweight
Morgan Stanley said it’s concerned about slowing broadcast revenue growth.
“As a result, we are downgrading FWONK to EW as we see its premium multiple as less sustainable as the business likely slows and the market frets over the business’s ability to continue to see strong broadcast revenue growth.”
JPMorgan names Fifth Third and PNC top picks
JPMorgan says PNC and Fifth Third are the firms’ favorite ideas in 2024.
“Relatively among our names, given the uncertainty about the economic outlook, we relatively prefer banks with better credit risk outlook such as PNC and Fifth Third.”
Deutsche Bank reiterates Boeing as buy
Deutsche raised its price target on the stock to $320 per share from $270 and says the stock will grind higher.
“Few large cap industrial stocks can match Boeing in its ability to move. In the four weeks since our upgrade, the stock has rallied 27% vs. ~7% for the XLI.”
Morgan Stanley reiterates Netflix as overweight
Morgan Stanley raised its price target on the stock to $550 per share from $475 and said it’s a “market leader.”
“Media’s pivot to profitability is driving down streaming losses across the sector. It also benefits OW NFLX as market leader.”
Bank of America upgrades Royal Bank of Canada to buy from neutral
Bank of America said the Canadian bank is best in class.
“We upgrade our rating on Royal Bank of Canada-RY to Buy from Neutral, PO to $146 ($110 USD), implying 11% upside from current levels, plus 4.3% dividend yield. Strong execution, deal driven synergies and best-in-class ROE defensibility create a compelling risk/reward despite the macro uncertainties.
HSBC initiates Thermo Fisher as buy
HSBC said Thermo Fisher is well positioned for robust growth.
“With the potential for a cyclical recovery in the Life Science tools market and one of the better execution stories, we think the company is set for a return to high single-digit (7-8%) organic growth.”
HSBC initiates Teva as buy
HSBC said the pharma company has “margin improvement.”
“Teva’s increasing focus on innovative medicine is becoming the new driver for growth and margin improvement.”
HSBC initiates AppLovin as buy
HSBC said the ad tech company is well positioned.
“We also initiate on mobile app marketing and monetizing platforms provider AppLovin (APP US) at Buy with a USD53.20 target price; as the market leader in mobile app install advertising with a lead in AI solutions, we think AppLovin is well positioned to benefit from the budding recovery of the segment.”
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