Top 5 Upgrades:
UBS upgraded Moderna (MRNA) to Buy from Neutral with a price target of $191, down from $221. The firm acknowledges the uncertainty around the endemic COVID market and Moderna's 2023 revenue, but says the stock's pullback has begun to reflect the significant risk to its COVID vaccine revenues but not its pipeline beyond COVID.
BMO Capital upgraded Sherwin-Williams (SHW) to Outperform from Market Perform with a price target of $275, up from $269. The firm sees "reasonable upside" to its above consensus estimates with raw materials fading in the near-term and the housing markets showing signs "that it may not be as bad as previously feared."
Gordon Haskett upgraded Burlington Stores (BURL) to Buy from Accumulate with a price target of $175, down from $200, as the firm makes changes in its retail coverage rating based on its latest Shades of Grey Portfolio update rankings.
KeyBanc upgraded Sotera Health (SHC) to Overweight from Sector Weight with a $24 price target. The firm is confident in Sotera's revenue growth outlook, saying it could benefit from improving medical device volumes as well as investments to support industry capacity.
BofA upgraded Alliant Energy (LNT) to Buy from Neutral with a price target of $58, up from $55. Recent Iowa Utilities Board decisions in support of advance ratemaking for solar suggest an improvement in perception of the regulatory climate in that state that will drive re-rating in Alliant shares, the firm says.
Top 5 Downgrades:
UBS downgraded Alphabet (GOOGL) to Neutral from Buy with a price target of $132, up from $123. The firm sees limited upside to consensus estimates and near-term monetization risk.
Goldman Sachs downgraded Tesla (TSLA) to Neutral from Buy with a price target of $248, up from $185. After rallying 108% year-to-date, the shares better reflect Goldman's positive long-term view of Tesla's growth potential and competitive positioning. Of note, Tesla also was downgraded to Equal Weight at Morgan Stanley and Barclays last week.
BMO Capital downgraded Celanese (CE) to Market Perform from Outperform with a price target of $119, down from $133. The macro environment "appears to have stalled" with the China recovery muted, Europe struggling, and the U.S. slowing, the firm notes.
Gordon Haskett downgraded Ross Stores (ROST) to Accumulate from Buy with an unchanged price target of $120. Sentiment on the group remains depressed, with retail lagging the broader S&P 500 by over 1,000 basis points year-to-date, notes the firm, who adds that the firm's survey work and proprietary traffic data "appear to be improving/bottoming, albeit modestly."
JPMorgan downgraded Mercury Systems (MRCY) to Neutral from Overweight with a price target of $37, down from $56. The firm's "remaining hope" for Mercury's turnaround story was a sale of the company, but Mercury was unable to find a buyer, announcing the end of its strategic review on Friday afternoon, along with CEO Mark Aslett's resignation and a search for a new CEO.
Top 5 Initiations:
Wells Fargo initiated coverage of Texas Roadhouse (TXRH) with an Equal Weight rating and $113 price target. Rising beef costs, moderating comps and a full valuation will likely limit the stock's near-term upside, says the firm.
Wells Fargo initiated coverage of Brinker International (EAT) with an Underweight rating and $31 price target. Considering the company's negative traffic and fading price/mix, fiscal 2024 consensus comp estimates "look optimistic," contends Wells.
Wells Fargo initiated coverage of Cheesecake Factory (CAKE) with an Equal Weight rating and $33 price target. The firm is cautious on the company's implied sales improvement in the second half of 2023.
BWS Financial initiated coverage of Impinj (PI) with a Sell rating and $45 12-month price target. BWS believes the stock is "priced for perfection when there are signs of higher risk for a downside move."
William Blair resumed coverage of Elastic (ESTC) with a Market Perform rating and no price target. While the firm views Elastic's long-term story as attractive, it believes the current share setup is balanced given risks related to cloud optimizations, small business headwinds, and its execution on guidance for a strong revenue growth acceleration in the back half of fiscal 2024.
