Carnival upgraded, PayPal 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:
Wells Fargo upgraded Carnival (CCL) to Overweight from Equal Weight with an unchanged price target of $22. The firm sees more upside in Carnival than Norwegian Cruise Line (NCLH) at current prices and thinks Carnival's higher FY24 EBITDA growth will allow it to deliver more quickly than Norwegian.
Needham upgraded Beyond (BYON) to Buy from Hold with a $40 price target. The analyst is constructive on the company's self-help initiatives to rein in expenses and capitalize on Bed Bath and Beyond's market share and loyalty, with Marcus Lemonis "at the helm as the agent of change."
UBS upgraded Boot Barn (BOOT) to Buy from Neutral with a price target of $108, up from $75. Boot Barn is a growth company but the firm thinks "the market is valuing it otherwise."
BofA upgraded Revolution Medicines (RVMD) to Buy from Neutral with a price target of $34, up from $31, citing growing confidence in the company's RAS(ON) platform heading into additional data updates in 2024. With RMC-6236 yielding an ORR of 38% in an ESMO readout of NSCLC responses, the firm sees "a strong case for '6236 efficacy in this patient population and line of therapy."
Oppenheimer upgraded Yum! Brands (YUM) to Outperform from Perform with a $154 price target. Yum shares are down 7% since the beginning of 2022, notes the analyst, who says the firm's updated analysis "forces us to pounce on a fresh opportunity to own" the company's high-quality unit growth, reliable earnings momentum, and "crown-jewel assets" like KFC International and Taco Bell U.S.
Top 5 Downgrades:
BTIG downgraded PayPal (PYPL) to Neutral from Buy without a price target. The analyst sees the process of returning the company to consistent and profitable revenue growth as a multiyear initiative, rather than a fiscal 2024 story.
Jefferies downgraded Okta (OKTA) to Hold from Buy with a price target of $95, up from $85. The analyst views the price target as given the risk associated with the company's "worse than expected cyber incident."
JMP Securities downgraded Allogene Therapeutics (ALLO) to Market Perform from Outperform without a price target. The analyst cites the discontinuation of the company's late-stage trials that powered the firm's prior valuation methodology for the downgrade.
Oppenheimer downgraded McDonald's (MCD) to Perform from Outperform without a price target. Oppenheimer says that following outsized double-digit earnings revisions in 2023, it is unable to identify another round of catalysts to the consensus model.
Wells Fargo downgraded Bally's (BALY) to Underweight from Equal Weight with an unchanged price target of $10. The firm's more cautious view reflects no line of sight to leverage dropping below ~6x for the foreseeable future, which could limit Bally's appeal.
Top 5 Initiations:
Jefferies initiated coverage of IBM (IBM) with a Hold rating and $180 price target. The analyst likes the "transformative moves" IBM has taken to reposition itself as a software-led story, including the Red Hat acquisition, Kyndryl spinoff and investments in artificial intelligence, but IBM is growing revenue below its software peers while operating at lower margins, the firm says. Meanwhile, Societe Generale downgraded IBM to Sell from Hold with an unchanged price target of $143.
RBC Capital initiated coverage of Snowflake (SNOW) with an Outperform rating and $230 price target. The firm is bullish on the long-term growth opportunity and sees upside to consensus estimates, calling out improving cloud optimization trends, rapid adoption of Snowpark, and adoption of new GenAI offerings over time as key catalysts.
Oppenheimer initiated coverage of BioNTech (BNTX) with a Perform rating and no price target. The firm expects COVID-19 sales to continue decreasing in 2024, with sales growth possibly reoccurring in 2025 onward as it assumes mRNA flu vaccine approval in 2025 and late-stage oncology candidates to launch mid-decade.
Piper Sandler initiated coverage of Roivant Sciences (ROIV) with an Overweight rating and $20 price target. With $6.6B pro forma net cash, Roivant is uniquely resourced to fund the company to profitability, do more deals, and return capital to shareholders, the analyst tells investors in a research note.
Bernstein initiated coverage of Howmet Aerospace (HWM) with an Outperform rating and $67 price target. The analyst sees more upside for Howmet even after outperformance by the stock in 2023.
