Here are Thursday’s biggest calls on Wall Street on Thursday:
TD Cowen upgrades Ross to outperform from market perform
TD said consensus is “underestimating [a] margin recovery” for Ross.
“Our proprietary data shows Off-Price is significantly outpacing overall Retail traffic as value proposition resonates, while the availability of inventory is increasing based on our work. ... Consensus is underestimating margin recovery due to supply chain cost deflation, accelerating SSS and improving store productivity.”
TD Cowen downgrades Columbia to market perform from outperform
TD said demand looks muted for Columbia Sportswear.
“In what will likely be a meaningful increase in promotions in 2H:23, and fairly muted demand in Spring/Summer 2024 order books, we see risk to the model.”
Bernstein downgrades Etsy to market perform from outperform
Bernstein said it’s concerned about slowing growth.
“Perhaps guidance is conservative or ETSY rebounds from this during the Q4 holiday season or next year (it’s nice to see that Active Buyers have regained some momentum). But we don’t really know when real growth (of notable magnitude) comes back.”
Citi downgrades Roku to neutral from buy
Citi downgraded the stock mainly on valuation.
“We see scope for Roku’s revenues to reaccelerate in 2024. However, given the run-up in the shares YTD (up ~120%), we believe this is largely priced into the equity.”
Piper Sandler reiterates Crocs as overweight
Piper said the shoe company is “underpinned by +DD [double digit] earnings growth and compelling valuation.”
“After a significant move (-15%) post the 2Q print, CROX has recovered slightly, and inbounds on both sides of the trade have materially increased.”
Deutsche Bank downgrades Qualcomm to hold from buy
Deutsche downgraded the chipmaker after its earnings report and said shares are “fairly valued.”
“QCOM delivered and in-line qtr and guide vs. our estimates, but management’s soft commentary around its Dec qtr and incremental headwinds in 2024 lead us to reduce our CY24 EPS ests by -8% and downgrade the stock to a Hold rating.”
Citi reiterates Apple a buy
Citi said it’s standing by its buy rating heading into Apple earnings after the bell.
“We believe investor focus is on continued gross margin expansion, services recovery (Sensor Tower Q2 App Store +6%), and Generative AI opportunity.”
Jefferies downgrades Southwest to underperform from hold
Jefferies said it has “limited visibility to margin expansion” for the airline.
“Q2 was a reminder that there may be alpha to be found in the airlines trade, as low-cost domestic airlines such as LUV face a weakening US consumer while network carriers continue to prosper from int’l + premium.”
Evercore ISI downgrades Simon Property to in line from outperform
Evercore downgraded Simon Property mainly on valuation after the company’s earnings on Wednesday.
“We expect retailer investment income in the second half to be down roughly 16%, given caution around retailer performance and higher costs in a recessionary environment.”
Benchmark upgrades Wingstop to buy from hold
Benchmark said in its upgrade of the wing-themed restaurant that the “operating model continues to strengthen.”
“We are upgrading shares of Wingstop to a Buy rating and establishing a $200 price target on the shares following solid 2Q23 results that were reported on August 2nd, along with commentary around the progress that WING has made in moving away from being a spot market purchaser of chicken wings.”
Telsey upgrades Traeger to outperform from market perform
Telsey said in its upgrade of the grilling company that Traeger shares are at an inflection point.
“we seem to be at an inflection point where the business has bottomed or is close to doing so as the company now laps easy comparisons going forward following significant sales declines going back to 1Q22 after the major pull-forward in demand during the pandemic.”
Bank of America reiterates Roblox as buy
Bank of America said shares of the online gaming platform are an “under-owned metaverse leader.”
“Investors we spoke with believe that 2H23 Y/Y comps will be harder than 1H23, offering a good financial test of Roblox’s secular growth potential.”
Janney upgrades Sunrun to buy from neutral
Janney upgraded the solar company after its earnings report and said the stock is too attractive to ignore.
“Positive to see RUN post an operationally solid quarter, beating customer additions expectations and reiterating its stance for continued margin expansion over the next few quarters. We are upgrading to Buy.”
UBS reiterates Costco as buy
UBS raised its price target on the stock to $640 per share from $560 after the company’s better-than-expected July comp sales numbers.
“COST’s 2.5% all in comp sales growth in July was better than many anticipated.”
Bernstein reiterates Coca-Cola as outperform
Bernstein said shares of the beverage giant are due for a re-rating if organic growth picks up.
“Our analysis indicates that, if Coke can become a 6% organic growth business (today, the market estimates 5% organic over the longer-term), the stock should re-rate by around 4 turns, in addition to the uplift in estimates.”
