Disney initiated, Foot Locker 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:
UBS upgraded Foot Locker (FL) to Neutral from Sell with a price target of $23, up from $12. The firm sees less downward EPS revision risk, no longer has a bearish view on macro and the market, and says its "thesis has mostly played out."
Jefferies upgraded PDD Holdings (PDD) to Buy from Hold with a price target of $157, up from $117, as the firm switched to a sum-of-the-parts valuation, factoring Temu's valuation. The firm expects Temu to generate about $37B gross merchandise value in 2024, with narrowing loss margin as a percentage of GMV, and expects domestic GMV to grow at about 20% year-over-year in 2024.
Truist upgraded Freshpet (FRPT) to Buy from Hold with a price target of $135, up from $120. The firm believes Freshpet's expansion at Costco (COST) will fuel more quarterly sales "surprises" and sees the company's path to its 2027 EBITDA margin target coming into focus as manufacturing expansion nears completion.
Truist upgraded Procter & Gamble (PG) to Buy from Hold with a price target of $175, up from $160. Procter & Gamble, having returned to volume growth in fiscal Q2 excluding China, recently gave encouraging commentary around its China business that signals enterprise-level volume recovery in the coming quarters as the comparisons become more favorable, the firm says.
JPMorgan upgraded Bilibili (BILI) to Neutral from Underweight with a price target of $11, up from $10. The firm says the stock's risk/reward is more balanced at current levels.
Top 5 Downgrades:
Goldman Sachs downgraded PDD Holdings (PDD) to Neutral from Buy with a price target of $136, down from $196, as the firm re-assesses its view of the risk-reward given two incremental developments. Namely, the firm cites a rapidly shifting policy landscape around cross-border businesses and domestic e-commerce peers' re-focus on growth for 2024 as commented in recent earnings.
Morgan Stanley downgraded Hyatt Hotels (H) to Equal Weight from Overweight with a price target of $156, up from $149. The company's pivot to asset light and simplification of the business model has driven share outperformance, leaving a more balanced risk/reward profile, the firm says.
BMO Capital downgraded Dominion Energy (D) to Market Perform from Outperform with an unchanged price target of $49. The firm cites valuation for the downgrade.
Citi downgraded Bilibili (BILI) to Neutral from Buy with a price target of $12.50, down from $18. The firm also reduced 2024 and 2025 revenue estimates to reflect a softer outlook over the company's gaming and other businesses following the Q4 report.
Baird downgraded Amylyx (AMLX) to Neutral from Outperform with a price target of $4, down from $37. The firm cites the failure of the Phase 3 PHOENIX trial of the company's lead agent Relyvrio for amyotrophic lateral sclerosis for the downgrade. Leerink also downgraded Amylyx to Market Perform from Outperform with a price target of $4, down from $27.
Top 5 Initiations:
CMB International initiated coverage of Disney (DIS) with a Buy rating and $142 price target. The firm expects Disney to benefit from streaming and sports industry tailwinds and its cost control initiatives.
JPMorgan initiated coverage of Duolingo (DUOL) with an Overweight rating and $270 price target. The firm believes the company is well positioned to deliver sustainable 20%-plus bookings and revenue growth.
Piper Sandler initiated coverage of Revolution Medicines (RVMD) with an Overweight rating and $43 price target. The firm views the company's multi-RAS inhibitor RMC-6236 as "significantly de-risked" following initial Phase I data.
Deutsche Bank initiated coverage of Hubbell (HUBB) with a Hold rating and $427 price target. The firm believes industry margins could be nearing peak levels following several years of strong price/cost tailwinds, and valuations look broadly expensive relative to peers. Deutsche Bank also started coverage of nVent Electric (NVT) with a Buy rating and $83 price target.
JPMorgan initiated coverage of Saia (SAIA) with an Overweight rating and $676 price target. Noting that the less-than-truckload industry is a $82B niche within the $1.1 trillion U.S. surface transportation market that has only grown by 1% per year since 2004, the firm says it is positive on the group ahead of a cyclical volume recovery but recognizes the stocks need a cyclical volume recovery and a more supportive truckload market in order to retain their valuations. JPMorgan also started coverage of Old Dominion (ODFL) with a Neutral rating and ArcBest (ARCB) with an Overweight rating.
