Here are Wednesday’s biggest calls on Wall Street:
Bank of America reiterates Walmart as buy
Bank of America raised its price target on the stock to $190 per share from $175 and said it sees upside to estimates heading into earnings next week.
“We raise PO to $190 (was $175) to reflect 28x (was 26x) our F25E adj. EPS as we think WMT will continue to gain share in an environment challenged by: consumer shift to grocery/necessities, which have inflated at a higher rate (25%) vs. most other categories.”
UBS reiterates Home Depot & Lowe’s as buy
UBS said it sees next week’s earnings reports for the home improvement retailers as a “low impact” event.
“The most likely case is that the upcoming prints from HD / LOW will be low impact events for the stocks. We believe this is because the bulls and the bears are going to be left with a void of evidence that will change their views.”
JPMorgan upgrades DraftKings to neutral from underweight
JPMorgan upgraded DraftKings mainly on valuation after Disney and Penn announced a partnership on Tuesday.
“Given where current after-market levels are ($29+, down ~10% from its closing price), we are using this price weakness to up our rating to Neutral from Underweight.”
Barclays upgrades Dish to equal weight from underweight
Barclays upgraded the stock after Dish announced a deal to merge with Echostar.
“The Dish/Echostar deal and potential exercise of spectrum purchase option with TMUS should buy Dish at least another year, if not more, to deal with its capital needs, Upgrade to EW.
BTIG downgrades WeWork to neutral from buy
BTIG said it’s no longer confident that the company can reach profitability.
“We Were Wrong. Flexible Workspaces Have a Future In the Office Ecosystem, but WeWork, In Its Current State, May Not.”
JPMorgan reiterates Peloton as overweight
JPMorgan said it sees an “attractive risk/reward” for the exercise equipment company.
“We remain positive on Peloton’s L-T positioning in the connected fitness space & we’re more optimistic into FY24 as PTON’s brand relaunch, Fitness-As-AService (FAAS) rental program, Peloton Certified Refurbished (PCR) bikes, and new Digital App strategy should help increase demand & return the company to revenue growth.”
Berenberg upgrades Marqeta to buy from hold
Berenberg said in its upgrade of the payment solutions company that an overhang was removed after Marqeta announced an extension of its agreement with Block.
“In conjunction with the release of its Q223 report yesterday, Marqeta (MQ) announced a four-year extension of its contract with Block (SQ, Not Rated) to power its Cash App card product, removing a significant overhang on the stock.”
Bank of America reiterates Rivian as buy
Bank of America said the electric vehicle maker is in the right place at the right time.
“We reiterate our Buy rating on RIVN, which is predicated on our view that the company is one of the most viable among the start-up EV automakers and also a relative competitive threat to incumbent OEMs [original equipment manufacturers].”
UBS downgrades UPS to neutral from buy
UBS downgraded the stock after its earnings report on Tuesday and said it’s concerned about cost pressures.
“The combination of a greater than expected decline in Domestic Package volumes (-12% in June and -11% in July) and clear visibility to significant year 1 Teamster contract cost pressures (we estimate 6% - 8%) create a backdrop of pressure on UPS’s Domestic Package margin which is likely to extend through 2Q24.”
Jefferies upgrades Eli Lilly to buy from hold
Jefferies said in its upgrade of Eli Lilly that GLP-1 is one of the “biggest drug classes of all time.”
“We’re bullish on LLY for several reasons: 1) LLY has an attractive growth profile in a recessionary environment, 2) we’re bullish on GLP1 & see GLP-1 as being one of the biggest drug classes of all time.”
Wells Fargo upgrades Chart Industries to overweight from equal weight
Wells said the engineered equipment company is well positioned in the energy transition.
“Upgrade to OW from EW and raise PT to $224 from $162. GTLS remains well-positioned for the Energy Transition with deleveraging a supporting event. Valuation based on 12x our upwardly revised 2024 EBITDA estimate.”
Bank of America reiterates Nvidia as buy
Bank of America said it’s standing by its buy rating on the stock.
“NVDA AI software, hardware leadership continues to shine. Maintain Buy and $550 PO on top pick NVDA following keynote speech from [CEO] Jensen Huang at SIGGRAPH 2023.”
Goldman Sachs downgrade International Flavors to neutral from buy
Goldman downgraded International Flavors after the company’s disappointing earnings on Tuesday.
“Following weaker 2Q23 results and a considerably more significant cut to 2023E EBITDA guidance than we had previously contemplated, we see the path to achieving medium-term EBITDA targets laid out at its December 2022 investor day as increasingly difficult.”
Stifel downgrades Datadog to hold from buy
Stifel downgraded the software company after a significant decline in shares.
“While downgrading a stock after a ~17% decline is clearly suboptimal, with DDOG posting its slimmest top-line upside quarter ever as management highlighted a meaningful Q/Q decline in usage growth that runs counter to what the Hyperscalers and other consumption names have said the last few months, we are left to wonder if something company-specific is not occurring within the installed base.”
