Charter downgraded, Cigna 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:
RBC Capital upgraded Cigna (CI) to Outperform from Sector Perform with a price target of $354, up from $327. The firm sees good visibility into the company's 2024 earnings growth, supported by share buybacks and a more solid operating backdrop this year, which includes pricing actions in the exchange book and "conservative assumptions" around stop-loss. Cantor Fitzgerald also upgraded Cigna to Overweight from Neutral with a price target of $372, up from $334.
Evercore ISI upgraded Tapestry (TPR) to Outperform from In Line with a price target of $50, up from $30. Tapestry's price to earnings has significantly lagged the recent peer group re-rating as the core Coach brand accelerates, and the firm believes Capri brands are significantly under-invested.
Redburn Atlantic upgraded Warner Music (WMG) to Neutral from Sell with a price target of $21, up from $17. Warner Music's new strategy, "less demanding" short-term expectations, lower capitalized advances and 30% valuation discount to Universal Music across various metrics make it the firm's relative preference.
Citi upgraded Citizens Financial (CFG) to Buy from Neutral with an unchanged price target of $36. The firm believes investors "should be playing offense rather than defense" in the current environment, saying the best time to own bank stocks is when valuations go from late cycle to early cycle multiples.
Seaport Research upgraded Dover (DOV) to Buy from Neutral with a $190 price target. The stock's valuation should increase toward the large cap diversified industrial group amid improving industrial sector fundamentals, orders turning positive year-over-year for the first time in two years, improving profit margins, new products and future acquisitions, the firm tells investors in a research note.
Top 5 Downgrades:
JPMorgan downgraded Charter Communications (CHTR) to Neutral from Overweight with a price target of $370, down from $445. The firm cites weaker broadband subscriber trends, slower EBITDA growth, and uncertainty related to the company's Affordable Connectivity Program for the downgrade. Wells Fargo also downgraded Charter to Equal Weight from Overweight with a price target of $340, down from $460.
MoffettNathanson downgraded Take-Two Interactive Software (TTWO) to Neutral from Buy with a price target of $167, down from $169. The firm sees an "exciting next two years" for Take-Two but says most of that is well understood and reflected in the stock.
Redburn Atlantic downgraded TJX (TJX) to Neutral from Buy with an unchanged price target of $100. The firm sees current consensus expectations as too high, given the strong operating outperformance the company has already delivered relative to peers.
DA Davidson downgraded Clorox (CLX) to Neutral from Buy with an unchanged price target of $162. The firm believes "fundamental tailwinds are turning to headwinds."
Evercore ISI downgraded Hilton (HLT) to In Line from Outperform with a $200 price target. While the earnings growth story is still intact, the firm believes a bull-case scenario in 2024 of low teens EBITDA growth is fairly priced at current levels. Evercore ISI also downgraded Hyatt (H) to In Line from Outperform with a $135 price target.
Top 5 Initiations:
Leerink initiated coverage of United Therapeutics (UTHR) with an Outperform rating and $330 price target. Backed by multiple MEDACorp KOL calls, Leerink believes United Therapeutics has a leading role in the pulmonary hypertension space which, paired with thoughtful strategic development, allows them to meaningfully grow its current Tyvaso franchise by driving Tyvaso DPI uptake and pursuing expansion efforts into PH associated with interstitial lung disease, where it has first-mover advantage.
CLSA initiated coverage of Tencent Music (TME) with an Outperform rating and $10.50 price target. The company is enjoying the secular growth of online music services, boosted by subscriber expansion, rising average revenue per user and margin improvement, on the back of a favorable competitive landscape, the firm tells investors in a research note. Redburn Atlantic also started coverage of Tencent Music with a Buy rating and $12 price target.
Piper Sandler initiated coverage of Soleno Therapeutics (SLNO) with an Overweight rating and $93 price target. The firm thinks Soleno is undervalued and sees "substantial room for growth," especially into approval.
JPMorgan initiated coverage of Smith Douglas Homes (SDHC) with an Overweight rating and $31.50 price target. The firm believes the company is well positioned to offer above average revenue and closings growth over the next several years, while at the same time utilizing its land light model to generate "industry leading" inventory turnover and return on equity. RBC Capital, Wells Fargo, Wedbush, Wolfe Research and BofA also started coverage of the stock but with Neutral-equivalent ratings.
DA Davidson initiated coverage of Riskified (RSKD) with a Neutral rating and $5 price target. The firm says that deceleration in key performance indicators, or KPIs, reflects the impact of macro uncertainty, while a potential decline in consumer spending remains a near-term overhang.
