Top 5 Upgrades:
- Wells Fargo upgraded JPMorgan(JPM) to Overweight from Equal Weight with a price target of $155, up from $148. The firm says JPMorgan epitomizes the firm's banking theme of "Goliath is Winning."
- Wells Fargo upgraded Eli Lilly(LLY) to Overweight from Equal Weight with a price target of $375, up from $360. The recent weakness in the shares creates a buying opportunity as Lilly's fundamentals remain the same, the firm says.
- Wells Fargo upgraded Amgen(AMGN) to Overweight from Equal Weight with a price target of $265, down from $275. The firm thinks the pessimism related to Amgen post Horizon Therapeutics (HZNP) deal has caused weakness, and now sees the stock trading 7%-8% below the worst-case scenario.
- Citi upgraded PNC Financial(PNC) to Buy from Neutral with an unchanged price target of $175. PNC appears to have been in play for SVB Financial (SIVB), but the deal did not materialize, which puts the bank "in the camp of strong pair of hands," the firm argues.
- DA Davidson upgraded Prosperity Bancshares(PB) to Buy from Neutral with an unchanged $79 price target. The stock has fallen to 52-week lows due to a meltdown in regional banking names, but the issues at SVB Financial and Silvergate (SI) are "idiosyncratic" and have no bearing on Prosperity Bancshares, the firm says.
Top 5 Downgrades:
- Wells Fargo downgraded Merck(MRK) to Equal Weight from Overweight with a price target of $115, down from $120. The recent appreciation of the stock brings shares to a level where they seem "fairly valued" and there is a lack of near-term catalysts, the firm says.
- Bernstein downgraded Lam Research(LRCX) to Market Perform from Outperform. The firm forecasts the wafer fab equipment market to rebound in 2024, though not back to 2022's level.
- Argus downgraded Advance Auto Parts(AAP) to Hold from Buy. The company has struggled to expand margins amid inflation and currency headwinds, paused stock buybacks and, in contrast with recent years, has not announced a dividend increase in 2023, the firm says.
- Wolfe Research downgraded Tesla(TSLA) to Peer Perform from Outperform without a price target as the analyst has become "incrementally more concerned about macro challenges." In addition, Tesla shares are currently trading within 6% of Wolfe's prior price target of $185, the firm noted.
- JPMorgan downgraded Under Armour(UAA) to Neutral from Overweight with a price target of $10, down from $13. The firm expects the industry inventory overhang to persist into the summer and fall.
Top 5 Initiations:
- Morgan Stanley initiated coverage of Nikola(NKLA) with an Equal Weight rating and $3 price target. The firm believes execution risk and competition from incumbents and start-ups "remains elevated" for the company.
- Evercore ISI initiated coverage of GE HealthCare(GEHC) with an Outperform rating and $90 price target, which represents 17% upside from current levels. The firm believes the company's positive pricing and platforming initiatives could uplift margins by 50-100 basis points annually.
- Credit Suisse initiated coverage of Cabot(CBT) with an Outperform rating and $94 price target. The carbon black market is one of the few chemical markets Credit Suisse expects to have better results in 2023 versus 2022.
- Credit Suisse initiated coverage of Orion Engineered(OEC) with an Outperform rating and $31 price target. The firm expects enterprise free cash flow as a percent of EBITDA to increase from 23% in 2022 to 36% in 2025.
- JPMorgan reinstated coverage of Nuvei(NVEI) with an Overweight rating and price target of $49, up from $41, following a period of restriction. firm analyst says the company's Paya acquisition reduces its relative exposure to highly discretionary merchant verticals.
