Here are Tuesday’s biggest calls on Wall Street:
UBS reiterates Nike as buy
UBS said it’s getting incrementally bullish on the stock and that it could double.
“Nike’s EPS growth could surprise and drive big stock price appreciation.”
BTIG upgrades Zscaler to buy from neutral
BTIG said its checks on the IT stock have been “consistently positive.”
“We are upgrading ZS to Buy from Neutral and introducing a $185/share PT. Over the last couple of months, we have spoken with seven contacts with a view on ZS, and feedback has been consistently positive.”
Morgan Stanley reiterates Apple as overweight
Morgan Stanley said it’s standing by its overweight rating heading into Apple earnings next week.
“Finally, a setup where we expect numbers to move materially higher, creating a favorable setup into earnings next week”
Piper Sandler upgrades Walmart to overweight from neutral
Piper said Walmart can take share even more market share on groceries.
“We believe as grocery inflation subsides, WMT has an opportunity to further extend market share gains, and we upgrade the stock to Overweight.”
Wells Fargo names Signet a top pick
Wells named the jewelry company as a “top recovery pick” and said it sees a ” looming inflection in engagement trends.”
“We are doubling down on our OW thesis and naming SIG the “Top Recovery Pick” in our space. We see a: 1) freshly reset revenue base, 2) looming inflection in engagement trends and 3) upcoming capital structure catalyst all driving shares higher.”
Morgan Stanley downgrades Progressive to underweight from equal weight
Morgan Stanley said in its downgrade of the auto insurer that it sees too many negative catalysts.
“Risk not fully priced in, downgrade to Underweight. Progressive has an impressive underwriting track record, but the company is facing some bumps on the road with continued reserve charges depressing earnings so far this year.”
Goldman Sachs reiterates Apple as buy
Goldman said it’s standing by its buy rating heading into earnings next week.
“Accordingly, we view AAPL as a long-term earnings & free cash flow compounder with strong visibility into that growth that supports a premium valuation.”
Mizuho initiates Shift4Payments as buy
Mizuho said in its initiation of the payments platform company that Shift has numerous positive catalysts that are not reflected in shares of the stock.
“Crafty Deals & Superior Unit Economics Drive Gateway to $80 PT; Initiate at Buy.”
Oppenheimer reiterates Costco as a top pick
Oppenheimer raised its price target on the stock to $630 per share from $575 and said the company is well positioned.
“Based on our work, we are lifting our PT to $630 and maintaining our top pick ranking. We believe COST is well-positioned to drive a comp re-acceleration in coming quarters and gain share in a continued challenged discretionary retail backdrop.”
Citi reiterates Alphabet as buy
Citi said it’s standing by its buy rating on Alphabet heading into earnings on Tuesday after the bell.
“More N-T, for 2Q23 earnings we expect Search and YT revenue to be largely in-line, we’ll be listening for signs of the improving online adv. market, and we are focused on opex leverage with 2Q likely the first quarter in six where revenue growth outpaces opex; we maintain our Buy rating and $130 PT.”
New Street upgrades Meta to buy from neutral
New Street said it’s getting more bullish on Meta shares and that it sees more upside than downside right now.
“This is not an explicit call on the quarter and we will wait for results to revisit estimates, but we are comfortable upgrading ahead of the print, as feedback from our Digital Ad Exec Speaker Series was strong and suggests a higher likelihood of upside to consensus rather than downside.”
Bank of America downgrades Tractor Supply to neutral from buy
Bank of America said it’s expecting an earnings miss on Thursday.
“We expect TSCO to report an earnings miss and cut guidance given a fading tailwind from inflation and worsening demand for discretionary categories.”
HSBC initiates Take-Two Interactive as buy
HSBC said in its initiation of the video game developer that it has a “consistent track record of developing best-selling sequels.”
“Take-Two’s acquisition of mobile game developer Zynga in 2022 means it now generates half of its sales from mobile gaming, positioning it for a recovery in the space or broader digital advertising market; rollout of new direct-to-consumer (DTC) payment options should prove margin accretive.”
Atlantic Equities downgrades Disney to underweight from neutral
Atlantic Equities downgraded the stock due to ad declines and concerns about direct-to-consumer traction.
“We are downgrading Disney to Underweight and cutting our SOTP-based price target from $113 to $76. In this report, we analyse the effect of what we believe is a negative tipping point in linear TV advertising, which we estimate will shave almost $1bn off 2026 forecast operating income.”
Citi downgrades Goldman Sachs to neutral from buy
Citi said it sees a more balanced risk/reward for Goldman.
“With GS trading at ~1.3x TBV (tangible book value) slightly ahead of its historical multiple, we believe risk/reward is balanced at these levels and downgrade to Neutral.”
TD Cowen initiates Warner Music Grow as outperform
TD initiated the music company with an outperform and says it sees a return to growth.
“While WMG’s recent revenue growth has lagged peers, we believe this is largely due to a temporary soft period for their pipeline. We expect WMG’s growth to return towards industry levels over the next 12 months.”
Wolfe upgrades Datadog to outperform from peer perform
Wolfe said in its upgrade of the cloud computing company that it sees improving fundamentals.
“We are upgrading the company today not because of valuation, but because our view on the core fundamentals has changed. As our title suggests, simply put even in a cost-cutting obsessed macro environment, engineers simply cannot live without their Datadog.”
Mizuho reiterates Meta as buy
Mizuho raised its price target on the stock to $350 per share from $280 and says the setup looks “favorable” heading into earnings on Wednesday.
“We believe META’s setup into earnings appears favorable despite positive investor expectations.”
Baird initiates Howmet Aerospace as outperform
Baird said the aerospace company is “best-in-class.”
“HWM holds various top supplier positions across the entire BA and Airbus aircraft line-up, with HSD (high single digits) top-line growth intact through 2025+, driven by ramping OEM production with EBITDA margins approaching 25.0%.”
Morgan Stanley names Elevance a top pick
Morgan Stanley named the health insurance provider as a top pick and said it sees further earnings per share growth.
“We update our Top Pick to ELV. We view ELV as the cleanest story in Managed Care into 2024 & see strong opportunity to achieve +12-15% 2024 EPS growth driven by Comm/MA (commercial & medicare advantage) margin expansion.”
Citi reiterates Flywire as buy
Citi said the payments and foreign exchange company is a “top fintech idea.”
“Flywire should continue to execute to expectations in 2Q23. This is a seasonally slower quarter for its largest vertical but we look for solid in-quarter performance in the travel vertical.”
Wells Fargo reiterates IMAX as overweight
Wells said the stock “remains our favorite name to play the shifting trend to premium theater experiences.”
“We continue to see strong demand for IMAX systems, and we expect this to continue through ’23 and beyond.
