Here are the biggest calls on Wall Street on Monday:
TD Cowen initiates On Holding as outperform
Cowen initiates the shoe manufacturer and says it sees a strong growth opportunity.
“We are initiating coverage with an ONON with an Outperform rating and $38 price target. Our survey work on customer acquisition and the market share opportunity highlights long tailed growth opportunity, while consensus margin estimates look conservative through FY25 and guidance for FY23 is likely to be raised.”
Citi downgrades AT&T to neutral from buy
Citi downgraded the stock on valuation.
“AT&T has an opportunity to sustain positive revenue growth, improve margins and FCF, and find valuation support near current levels, while we recognize AT&T could incur possible future liabilities and financial risk from the industry’s historical use of lead sheathed cabling.”
Citi opens a positive catalyst watch on Valvoline
Citi opened a positive catalyst watch on Valvoline and says it has robust fundamentals.
“We open a 30-day upside catalyst watch based on strong fundamentals and the stock’s relative under-performance post completion of the Dutch tender offer on 6/8.”
Goldman Sachs upgrades Chewy to buy from neutral
Goldman said in its upgrade of the pet food company that it sees the “potential for continued positive net sales growth and rising gross margins.”
“Both of these factors support our preference for AMZN as our top pick within eCommerce and our upgrade of CHWY to Buy (where we see the potential for continued positive net sales growth and rising gross margins).”
Goldman Sachs upgrades Yelp to buy from neutral
Goldman upgraded the review website app company and says it sees improving ad fundmentals.
“we upgrade YELP from Neutral to Buy, with a new PT of $47 (from $38) on the back of stable/rising local advertising trends, an analysis of the incremental margin opportunity and the potential for stable/increased shareholder returns in the years ahead.
Read more about this call here.
Citi opens a positive catalyst watch on Bank of New York Mellon
Citi opened a positive catalyst watch on the investment bank ahead of earnings on Tuesday.
“We expect BK to hold its 2023 NII (net interest income) guide when it reports on Tuesday and, consequently, are opening a positive catalyst watch.
Citi reiterates Nvidia as buy
Citi raised its price target on the stock to $520 per share from $420 and says it sees an attractive risk/reward for top AI beneficiary Nvidia.
“We continue to see favorable risk-reward on accelerating Y/Y data center sales through the year with China ban, slower macro impact on gaming demand, and competition as key near- to long-term downside risks.”
Deutsche Bank reiterates Netflix as buy
Deutsche raised its price target on Netflix to $475 per share from $410 and says it’s bullish heading into earnings later this week.
“Expectations have risen, making for a tougher valuation case, but we are reiterating our Buy rating.”
Goldman Sachs adds Baidu to the conviction buy list
Goldman said the China internet company is a top AI beneficiary.
“We view Baidu as one of the best positioned China Internet names pivoting to the secular Generative AI theme (as highlighted in our thematic report), with its expanding AI product suite backed by its 4 layers of Generative AI service offerings.”
Wells Fargo reiterates Tesla as equal weight
Wells said it’s cautious heading into Tesla earnings later this week but raised its price on the stock to $265 per share from $170.
“The company beat Q2 delivery volume consensus. However, we forecast auto gross margin falls to 17.5% due to continued price cuts & weaker mix. We raise our PT to $265, but remain EW.”
Morgan Stanley reiterates Apple as overweight
Morgan Stanley raised its price target on Apple to $220 from $190 and says India is the company’s “next frontier.”
“We est Apple India can grow 7x over the next 10 yrs (to $40bn), add 170mn new users, and account for 15% of revenue growth. PT up to $220.”
Morgan Stanley downgrades Conagra to equal weight from overweight
Morgan Stanley said in its downgrade of the food products company that it sees packaged food volumes “softening.”
“We downgrade CAG to EW as we see headwinds to CAG’s growth outlook from softening packaged food volumes, risk of increasing trade down, and potential for increasing reinvestment limiting EPS growth.”
Morgan Stanley downgrades Pepsi to equal weight from overweight
Morgan Stanley said it sees “limited upside” left for Pepsi.
“We downgrade PEP to EW post a strong Q2, as we see it as now fairly valued post large stock outperformance with catalysts played out & PEP at modern-day record valuation highs vs. multiple peers.”
Barclays initiates SAIA as overweight
Barclays initiated the freight transportation company and says it likes the stock’s valuation.
“However, we generally favor those with a cheaper valuation and clearer opportunity for margin improvement, such as SAIA and XPO.”
Raymond James downgrades FIGS to market perform from outperform
Raymond James downgraded the hospital uniform company mainly on valuation.
“Our checks on Google Trends indicate searches were +15% y/y (same as 1Q) through searches by month decelerated. LT, we still view FIGS has attractive growth opportunities, esp. in non-scrubs and International, and structural margins are in the mid/high-teen%, but our view reflects less conviction on near-term trends.”
JPMorgan upgrades Progressive to overweight from neutral
JPMorgan said it’s standing by shares of the auto insurer.
“PGR’s June results were poor, but do not alter our long-term view of the company’s earnings power and growth potential.”
Bernstein upgrades Aramark to outperform from market perform
Bernstein said in its upgrade of the food, facilities and uniform company that shares will “surprise to the upside.”
“Despite some recent momentum, Aramark has lagged the index by 16% this year, and its key comps Compass and Cintas by 8%. We see the uncertainties of the investment story beginning to clear, with near term margin inflection set to surprise to the upside.”
Oppenheimer reiterates Chipotle as outperform
Oppenheimer raised its price target on the stock to $2,350 per share from $2,050 and says it’s too attractive to ignore.
“But after refreshing our analysis and reassessing our CMG thesis, we believe the near-term and long-term earnings power vs consensus remains too attractive.”
Bank of America reiterates Take-Two as buy
Bank of America raised its price target on the stock to $170 per share from $146 and says the video game company is well positioned.
“TTWO is rolling out one of the largest PC/Console game pipelines in the history of video games. Its games each have 10s of millions of fans, and sales span multiple console generations, PC, and with the addition of Zynga (acquired in May 2022) potentially mobile phones.”
Citi opens positive catalyst watches on NXP Semiconductors and Intel
Citi opened a positive catalyst watch on Intel and NXP and says it sees “upside to estimates.”
“Launching positive 90-day catalyst watches on NXP, INTC and negative 90-day catalyst watches on AMD, TXN, GFS.”
Credit Suisse reiterates Meta as outperform
Credit Suisse raised its price target on the stock ahead of earnings later this month and says it sees further upside to revenue growth.
“We preview Meta’s 2Q23 results — we increase our price target from $277 to $361 as we once again recalibrate our estimates, factor in capital structure changes, and roll forward our valuation parameters to 2024.”
Evercore ISI reiterates Arista Networks as outperform
Evercore added the stock to its tactical outperform list and says AI will drive upside for the long term.
“AI To Drive Long-term Upside: We expect ANET to see modest upside vs. street expectations for the June-qtr and management will likely remain prudently conservative around H2:23 and CY24 commentary at this point.”
