AutoZone upgraded, Shopify 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:
Raymond James upgraded AutoZone (AZO) to Strong Buy from Outperform with a price target of $3,100, up from $2,850. The firm expects the company's fiscal 2024 results to support the firm's favorable long-term thesis of market share gains driven by improved parts coverage and availability following more mega hub openings.
Raymond James upgraded Shake Shack (SHAK) to Strong Buy from Outperform with an unchanged price target of $78. The firm sees "idiosyncratic opportunities" for Shake Shack into 2024 to increase margins and potentially stimulate traffic, which could create upside to consensus 2024 expectations.
BofA upgraded Discover (DFS) and Capital One (COF) to Buy from Neutral with price targets of $116 and $129, up from $94 and $112, respectively. The firm thinks peak delinquencies could come into view in the next 3-6 months and so believes it is "time to get incrementally more bullish on the credit card stocks."
Citi upgraded Signet Jewelers (SIG) to Buy from Neutral with a price target of $119, up from $93. The company's Q3 was "fairly uneventful on the surface" but there were several things that make Citi more positive on the stock, the firm says.
Wolfe Research upgraded Realty Income (O) to Outperform from Peer Perform with a $66 price target. The stock represents a "value opportunity" as shares have fallen 13% this year due to "transient events", the firm tells investors in a research note.
Top 5 Downgrades:
Wedbush downgraded Shopify (SHOP) to Neutral from Outperform with a price target of $68, up from $66, citing valuation. While the firm continues to hold a favorable view of Shopify's overall strategy and competitive positioning within e-commerce, it notes the shares have risen 53% since the company reported Q3 results on November 2.
BofA downgraded PayPal (PYPL) to Neutral from Buy with a price target of $66, down from $77. Following a modest Q3 beat and new CEO Alex Chriss' fresh messaging around profitable growth and increased urgency around execution, shares have traded up from their lows, but the firm sees 2024 as a transition year.
BofA downgraded Toast (TOST) to Neutral from Buy with a price target of $16, down from $22. While the shares have lagged significantly since the Q3 print, the firm still sees risks that could inhibit re-rating higher in the near-term.
HSBC downgraded Asana (ASAN) to Reduce from Hold with an unchanged price target of $18. While margin expansion drove a narrower Q3 loss, the company's macroeconomic challenges continue, the firm says.
Morgan Stanley downgraded Plug Power (PLUG) to Underweight from Equal Weight with a price target of $3, down from $3.50. Rising interest rates and renewable electricity prices leave green hydrogen economics increasingly reliant on subsidies, where visibility remains poor, the firm says.
Top 5 Initiations:
Redburn Atlantic initiated coverage of Shift4 Payments (FOUR) with a Sell rating and $49 price target. The firm anticipates Shift4's earnings may fall short of consensus' expectations. Redburn says the company is buying some of its fast growth.
Morgan Stanley resumed coverage of J.M. Smucker (SJM) with an Equal Weight rating and $122 price target. The firm has "several concerns" following the recent Hostess acquisition including integration risk, soft retail sales, GLP-1 risk, and higher leverage.
BMO Capital reinstated coverage of Blackstone (BX) with a Market Perform rating and $95 price target. The firm is positive on the company's track record for investment return, strategy breadth across asset classes, and distribution channel diversification, but also sees its valuation fully reflecting expectations for mid-teens fee-related earnings growth while offering a balanced risk-reward on the stock.
BMO Capital reinstated coverage of Apollo Global (APO) with an Outperform rating and $108 price target. With its AUM overweight to credit strategies, distribution channel diversification, and operating leverage, Apollo offers "peer-leading earnings growth prospects," the firm says.
KeyBanc initiated coverage of Equinix (EQIX) with a Sector Weight rating, with positive factors balanced by premium valuation. The firm believes Equinix warrants a premium valuation though it sees better relative value in Towers.
