Apple downgraded, Home Depot upgraded: 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:
Wedbush upgraded Home Depot (HD) to Outperform from Neutral with a price target of $380, up from $330. Although home improvement retail demand weakened in 2023 on the back of spiking interest rates, plummeting existing home sales, consumer spending shifting to services and unwinding of pulled forward demand throughout the pandemic, the firm believes many of these key drivers are bottoming or reversing, which should translate to stronger demand in 2024.
Goldman Sachs upgraded Toast (TOST) to Buy from Neutral with a $24 price target. The firm thinks the market is not accounting for what it expects to be materially better profitability trends in 2024 for Toast.
Truist upgraded Virgin Galactic (SPCE) to Hold from Sell with a price target of $3, up from $1. The company's decision to halt commercial operations mid-2024 to focus on deploying capital towards the development of the Delta fleet is prudent but removes the likelihood of any significant upside or downside catalysts in the near-term, the firm tells investors in a research note.
Jefferies upgraded AB InBev (BUD) to Buy from Hold with a price target of $76, up from $60. The firm says AB InBev's "repaired" balance sheet increases optionality on cash returns, driving double-digit total return and a re-rating as the company "builds a reputation as a consistent compounder."
Susquehanna upgraded C.H. Robinson (CHRW) to Neutral from Negative with a price target of $80, up from $72. The firm feels "good" about transport demand into 2024, both domestically within truckload and in international trade, but thinks there's too much 2024 estimate risk from pricing to be constructive on truckload-related shares today.
Top 5 Downgrades:
Redburn Atlantic downgraded Apple (AAPL) to Neutral from Buy with an unchanged price target of $200. While the firm expects the iPhone to return to growth in 2024, it sees little room for upside over the next few years, and says an "anticipated underwhelming" March quarter could impact confidence in this outlook.
BofA downgraded Zillow (ZG) to Neutral from Buy with a price target of $60, up from $47. The firm believes the stock is pricing a steady recovery in housing in 2024 with shares are up over 40% year-over-year, but it argues that near record low home affordability could limit volume upside, even with lower rates.
Goldman Sachs downgraded Etsy (ETSY) to Neutral from Buy with a price target of $80, down from $84. The firm sees a more balanced risk/reward for the shares from here on low visibility on 2024 gross merchandise sales growth and long-term Street estimates that it believes already fully capture the company's growth potential.
Argus downgraded Constellation Brands (STZ) to Hold from Buy. Constellation Brands is likely to benefit from high single-digit growth in its beer business, but stubbornly high packaging costs, competition from craft brewers, and higher operating expenses remain a concern, the firm tells investors in a research note.
Citi downgraded Charles Schwab (SCHW) to Neutral from Buy with a price target of $70, down from $75, and opened a "90-day negative catalyst watch" on the shares. Following the recent share strength, the firm sees a more balanced risk/reward at current levels and views Schwab's valuation as fair.
Top 5 Initiations:
BMO Capital initiated coverage of Affirm (AFRM) with a Market Perform rating and $44 price target. While Affirm is a leading buy-now-pay-later service provider with an "impressively long runway" for ongoing payments volume growth, the shares almost tripled going into year-end, the firm notes.
Goldman Sachs initiated coverage of Revolve Group (RVLV) with a Sell rating and $12 price target. The firm sees a less attractive 12 month risk/reward, saying the pressure seen across the high-end online apparel industry could persist and lead to further downward revisions to Street estimates.
JPMorgan reinstated coverage of Omnicom (OMC) with an Overweight rating and price target of $106, up from $100, following a period of restriction. Omnicom is the firm's preferred pick in the agency space.
BMO Capital initiated coverage of SoFi Technologies (SOFI) with a Market Perform rating and $9 price target. The company's loan sales have declined and its outlook for loan growth is subsequently tempered, the firm says.
Deutsche Bank initiated coverage of 16 consumer and specialty finance stocks, saying it believes the outlook for the consumer credit cycle is mixed, but priced for greater economic weakness than seems likely. The firm put Buy ratings on Ally (ALLY), American Express (AXP), Mr. Cooper (COOP), First American (FAF), OneMain (OMF), PennyMac Financial (PFSI), SLM (SLM) and Synchrony (SYF). It put Hold ratings on Capital One (COF), Discover (DFS), Fidelity National (FNF), Navient (NAVI), PennyMac Mortgage (PMT), Rocket Companies (RKT), SoFi Technologies (SOFI) and UWM Holdings (UWMC).
