Apple upgraded, Palo Alto initiated: 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:
BofA upgraded Apple (AAPL) to Buy from Neutral with a price target of $225, up from $208. The firm sees a stronger multi-year iPhone upgrade cycle driven by the need for the latest hardware to enable generative artificial intelligence features to be introduced in 2024 and 2025.
Argus upgraded Pinterest (PINS) to Buy from Hold with a $45 price target. More than half of the company's users have intention to purchase prior to visiting the Pinterest platform, and the firm sees more of these users, higher engagement, increased ad prices and higher ad loads to drive growth.
Piper Sandler upgraded Tempur Sealy (TPX) to Overweight from Neutral with a price target of $61, up from $41. Tempur has become a dominant operator within the mattress industry, with a multi-year growth outlook that is becoming highly attractive to long-term investors, the firm tells investors in a research note.
Morgan Stanley upgraded Hertz (HTZ) to Overweight from Equal Weight with a price target of $15, down from $16. While the company's "aggressive EV strategy" has exacerbated significant challenges in both fleet cost and operating expense per unit, Hertz has begun to take "decisive action to address self-inflicted challenges from its large EV fleet," the analyst tells investors. Given about 90% upside to its revised price target, the firm sees "an improved risk reward," the analyst added.
Wolfe Research upgraded Analog Devices (ADI) to Outperform from Peer Perform with a $225 price target. The company's "healthy cuts and flexible manufacturing model create a reasonable scenario" for second half of fiscal 2024 improvement as inventory burns off, the firm says. Wolfe also upgraded Microchip (MCHP) and NXP Semiconductors (NXPI) to Outperform from Peer Perform.
Top 5 Downgrades:
Odeon Capital downgraded Wells Fargo (WFC) to Hold from Buy with a $48.80 price target. Wells reported earnings of 86c per share in Q4, but there appears to have been 43c in net one-time charges, suggesting operating earnings of $1.29 per share in the quarter, which the bank "may not be able to replicate until mid-2026," the firm says.
Keefe Bruyette downgraded Charles Schwab (SCHW) to Market Perform from Outperform with a price target of $70, down from $75. The firm still likes the Schwab story over a multi-year view, but believes catalysts "will simply take time to play out, with most of them 2025 events."
Citi downgraded Spirit Airlines (SAVE) to Sell from Neutral with a price target of $4, down from $13. Although JetBlue (JBLU) and Spirit can still appeal Tuesday's court ruling, which blocked the carriers' proposed merger, it is unclear why JetBlue wouldn't cut its losses here and recognize that it avoided a risky bid on a highly levered carrier with steep losses, the firm says.
BofA downgraded Playtika (PLTK) to Underperform from Neutral with a price target of $8, down from $11. The firm cites a "tepid" growth outlook and lack of catalysts for the downgrade.
DA Davidson downgraded Varonis (VRNS) to Neutral from Buy with a price target of $45, up from $37. The firm sees ARR growth potentially accelerating from 15-16% this year to 20% plus in FY24 given Copilot driven deals and increased SaaS conversions with existing customers, but believes shares are fully pricing this in with shares up 89% since last May. The firm continues to believe the SaaS transition will play out quicker than expected and
Top 5 Initiations:
Bernstein initiated coverage of Palo Alto Networks (PAWN) with an Outperform rating and $402 price target. Palo Alto's platform play appears well-positioned, and may help grow top line 3-4-times by 2030, and put FY26 growth +15% above consensus, the firm tells investors in a research note.
Bernstein initiated coverage of Crowdstrike (CRWD) and SentinelOne (S) with Outperform ratings and price targets of $334 and $34, respectively. The firm says CrowdStrike and SentinelOne are the two leading best-of-breed players in endpoint security targeting cloud technical horizons.
Bernstein initiated coverage of Cloudflare (NET) with a Market Perform rating and $85 price target. The company appears "reasonably durable relative to competitors" in its core CDN and internet security market, but it is not clear if it will have as much success in new product extensions, the firm says. Bernstein also initiated Fortinet (FTNT) with a Market Perform.
Bernstein initiated coverage of Zscaler (ZS) with an Outperform rating and $311 price target. Zscaler's Secure Service Edge is well-positioned competitively in its target customer profile, and is a "best of breed" winner in SSE/SASE, the firm tells investors in a research note.
Citi initiated coverage of Jack Henry (JKHY) with a Neutral rating and $177 price target. The company offers a compounding opportunity, but Citi requires more confidence in greater multiple expansion or a better entry point for this quality name.
