Here are Thursday’s biggest calls on Wall Street:
Barclays initiates Jabil and Flex as overweight
Barclays initiated several technology manufacturers Thursday and said it sees margin expansion.
“We initiate on JBL and FLEX with OW ratings and $134 and $35 PTs, respectively. Both companies should benefit from secular tailwinds from EV, healthcare, renewables and cloud growth, while consumer end markets have bottomed, in our view.”
Wells Fargo initiates Valvoline as overweight
Wells said in its initiation of Valvoline that the stock has plenty room to run.
“VVV is a high quality operator w/ category-leading comps, accelerating unit growth and an asset-light model.”
HSBC initiates Goldman Sachs and Morgan Stanley as buy
HSBC initiated several banks and said it sees “high-single-digit to low double- digit revenue growth in 2024.”
“Goldman Sachs and Morgan Stanley appear best positioned to benefit from a recovery in investment banking (IB) activity from decade-long lows, and should post high-single-digit to low double- digit revenue growth in 2024 and outsized earnings per share (EPS) growth in both 2024 and 2025.”
Wells Fargo upgrades McDonald’s to overweight from equal weight
Wells said McDonald’s is “best positioned to weather the storm.”
“Shares have pulled back, and we see an opportunity to own a best in class operator, with clear comp/margin upside and looming NT [near term] catalysts from the ongoing Best Burger roll out, unit growth acceleration (in FY24+) and Dec Analyst Day.”
Morgan Stanley reiterates Apple as overweight
Morgan Stanley said it’s standing by its overweight rating on the stock heading into Apple’s iPhone event next week.
“While the iPhone event has historically been a ‘sell-the-news’ event, we continue to see upside to Consensus and buyside expectations as FY24 tailwinds outweigh the headwinds.”
Citi opens a positive catalyst watch on Micron
Citi raised its price target on the stock to $85 per share from $75 and said Micron remains a top pick.
“Micron remains our top pick as it appears DRAM pricing is turning around in 3Q23 and we are launching a positive catalyst watch and raising our price target.
Jefferies reiterates Oracle as a top pick
Jefferies said it’s bullish heading into Oracle earnings next week.
“We maintain ORCL as our value pick in large cap software.”
Canaccord initiates Kenvue as buy
Canaccord said in its initiation of the consumer wellness company and Johnson & Johnson spinoff that it’s “well positioned to capitalize on the growing demand for self-care.”
“KVUE is a global consumer health and wellness company known for Tylenol, Neutrogena, Johnson’s, and Band-Aid, along with a few dozen other consumer-health-focused brands. Kenvue recently spun out of Johnson & Johnson’s (JNJ) consumer health portfolio in May 2023.”
JPMorgan reiterates Netflix as overweight
JPMorgan said it’s standing by shares of the streaming giant.
“As we highlighted in our last NFLX Trending report on 8/11, we remain positive on NFLX shares, but areas of investor push-back include 1) Paid Sharing monetization and magnitude/timing of uplift to ARM and revenue; 2) core subscriber growth and NFLXs future pricing power; and 3) the quality and trajectory of FCF in 2023 and 2024.”
Bernstein reiterates Tesla as underperform
Bernstein said it’s concerned further price cuts will be needed for Tesla.
“We continue to worry that Tesla will need to further lower prices this year and/or next year to achieve its volume targets, incrementally pressuring margins.”
Raymond James initiates Canada Goose as outperform
Raymond James said the outerwear company is a “strong luxury growth brand on sale.”
“As a luxury performance outerwear brand, we see GOOS mostly driving strong growth from new distribution and also increases from new adjacent product categories.”
Barclays downgrades Dell to underweight from equal weight
Barclays downgraded the stock on valuation.
“We downgrade shares of DELL to Underweight from Equal Weight after the recent run-up in the stock.”
Bank of America initiates Akamai as buy
Bank of America said in its initiation of the stock that it has a “unique opportunity.”
“We initiate coverage of Akamai, a Cloud Computing and Edge Delivery Networking vendor, with a Buy rating and $145 PO based on 22x our CY24 P/E.”
Loop downgrades Roku to hold from buy
Loop said it sees slowing revenue growth for Roku.
“While we commend the cost controls under new CFO, Dan Jedda, and believe they could set the company up for another beat, the latest restructuring also signifies the potential for slower revenue growth in 2024.”
Barclays initiates LPL Financial as overweight
Barclays said the financial services company is a “solid organic grower at reasonable valuation.”
“We view LPL as a solid organic grower, nicely aligned with broader trends toward the advisory side of wealth management, and with recent momentum around recruited assets and enterprise relationships likely to continue.”
Stifel initiates Lowe’s as buy
Stifel said in its initiation of Lowe’s that it likes the company’s “market share initiatives.”
“This drives our bifurcated approach to Home Depot and Lowe’s, with Lowe’s market share initiatives enabling a stronger performance.”
B. Riley downgrades Crocs to neutral from buy
B. Riley said it sees consumer sales slowing for Crocs.
“We believe the current footwear/slowing consumer backdrop will likely prove too challenging and clogged for CROX to avoid downward earnings revisions.”
Truist upgrades Vail Resorts to buy from hold
Truist said in its upgrade of Vail that it sees pricing power for the ski company.
“We see opportunity for several years of above-inflation pricing power.”
Barclays downgrades Seagate to equal weight from overweight
Barclays downgraded Seagate mainly on valuation.
“We understand this is a name that trades on momentum and think many will point to ’25, but we step to the sideline here with a PT of $65 as its clear this is taking much longer and the stock has run.”
Raymond James downgrades Dave and Buster’s to outperform from strong buy
Raymond James downgraded the stock after its earnings report on Wednesday.
“The company’s F2Q results reflected weaker than expected comps at D&B (down 7.1% vs. RJE down ~4%), with tougher compares in F2H that could result in high single-digit % comp declines at D&B.”
Guggenheim initiates CyberArk as buy
Guggenheim said the cyber security company is a “unique asset with an underappreciated market opportunity.”
“We are initiating coverage of CyberArk Software Ltd. (CYBR) with a Buy rating and price target of $200, implying 16% upside potential.”
Morgan Stanley reiterates Meta as overweight
Morgan Stanley said it’s staying bullish on shares of Meta.
“Our bottom-up ad analysis (Reels, Click to Message and Core) gives us higher confidence in our base case 13% ’24 rev growth/$18.50 in EPS, while also laying the path to $20 of EPS.”
Bernstein reiterates Nvidia as outperform
Bernstein said it’s standing by it’s outperform rating on Nvidia.
“The datacenter opportunity is enormous, and still early, with material upside still possible..”
