Amgen upgraded, PepsiCo downgraded: Wall Street's top analyst calls
The most talked about and market moving research calls around Wall Street are now in one place. Here are today's research calls that investors need to know, as compiled by The Fly.
Top 5 Upgrades:
BMO Capital upgraded Amgen (AMGN) to Outperform from Market Perform with a price target of $326, up from $286. The firm says Amgen's "budding" oral and injectable metabolic pipeline gives investors the opportunity to play in the obesity metabolic space without the same premium as peers like Eli Lilly (LLY) and argues that the closure of its Horizon deal takes a "meaningful step" towards replacing revenues lost to base business erosion.
Wells Fargo upgraded Rockwell Automation (ROK) to Overweight from Equal Weight with a price target of $357, up from $280. The firm says the core of its upgrade is that a combination of improving orders and a strengthening PMI will drive outperformance in Rockwell Automation's shares vs. EEMI on relative valuation expansion.
BMO Capital upgraded AIG (AIG) to Outperform from Market Perform with a price target of $83, up from $72. AIG trades at an "inexpensive" price-to-book value ex-AOCI basis and the firm expects the market will "see through" potentially downwards EPS revisions in 2024 from the de-consolidation of Life Insurance, the firm tells investors.
Piper Sandler upgraded Sunrun (RUN) to Overweight from Neutral with a price target of $31, up from $15. Since renewable projects rely on project finance, the firm's solar coverage in that area is "highly sensitive to changes in rates and credit spreads," notes the firm. Piper also upgraded Sunnova Energy (NOVA) to Overweight from Neutral with a price target of $26, up from $13.
Scotiabank upgraded Illumina (ILMN) to Outperform from Sector Perform with a price target of $185, down from $205, after the company announced plans to divest Grail.
Top 5 Downgrades:
JPMorgan downgraded PepsiCo (PEP) to Neutral from Overweight with a price target of $176, down from $185. While the firm doesn't see" anything fundamentally wrong" with Pepsi and has confidence that the company is well positioned to deliver on its 2024 outlook, JPMorgan sees the magnitude of upward estimate revisions as narrowing and sees better opportunity within Beverages.
Piper Sandler downgraded SolarEdge (SEDG) to Neutral from Overweight with a price target of $105, down from $110. The firm, which anticipates "a 20-ish% decline" in U.S. residential solar installs in 2024 given weakness in California, cites a "fair valuation" following earnings reset. Piper also downgraded Plug Power (PLUG) to Underweight from Neutral with a price target of $2.30, down from $6.50, and Array Technologies (ARRY) to Neutral from Overweight with a price target of $22, down from $26.
Stifel downgraded Gildan Activewear (GIL) to Hold from Buy with a price target of $34, down from $37. Several shareholders have announced publicly their disagreement with the company's decision to terminate CEO Glenn Chamandy, but Gildan's appointment of Chris Shackelton, who is in favor of the changes made by the board of directors, to its board suggests that the board is unlikely to reinstate Chamandy.
CIBC downgraded Magna (MGA) to Neutral from Outperformer with a price target of $63, down from $70. The auto industry had a significant amount of adversity to overcome throughout 2023, says the firm, which continues to see some uncertainty in the industry with regards to EV adoption and the associated investments as well as the macro backdrop in 2024.
Morgan Stanley downgraded PTC Therapeutics (PTCT) to Underweight from Equal Weight with an unchanged price target of $28. While the firm still find the sepiapterin profile to be "compelling" in PKU, it sees better risk-adjusted opportunities elsewhere in its pharma coverage given greater uncertainty from regulatory headwinds faced by multiple programs.
Top 5 Initiations:
Jefferies initiated coverage of Chewy (CHWY) with a Buy rating and $27 price target. Pet health, ads biz, and automation are near-term drivers for the pet e-commerce pure-play, says the firm, who sees reset expectations offering investors a "compelling risk-reward." Jefferies also started coverage of Petco (WOOF) and Freshpet (FRPT) with Hold ratings.
Jefferies initiated coverage of Elanco (ELAN) with a Buy rating and $17 price target. The firm sees an attractive set up into 2024 for this top player in animal health, and despite recent market underperformance, expects tailwinds from impending product launches to bolster the recent inflection to growth.
Piper Sandler initiated coverage of Nextracker (NXT) with an Overweight rating and $60 price target. The firm believes businesses with high visibility to forward revenue growth via utility-levered backlogs, positive earnings momentum, and reasonable valuations have the potential to outperform in 2024 and argues that e the tracker market leader "meets this requirement."
Oppenheimer initiated coverage of Equifax (EFX) with an Outperform rating and $273 price target. The firm, which sees the slowdown in the company's organic growth over the past two years as mainly driven by cyclical factors, argues that the company's two critical assets in Credit Bureau and TWN have "maintained their competitive strength," which it sees positioning the company well for outperformance going forward.
Oppenheimer initiated coverage of TransUnion (TRU) with an Outperform rating and $81 price target. The stock had been under pressure due to a precipitous decline in mortgage originations and apprehension about credit quality, but the severity of concern appears to be exaggerated and the market may have extrapolated too much from management's Q3 earnings commentary, the firm says.
