Foot Locker upgraded, Deckers 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:
Piper Sandler upgraded Foot Locker (FL) to Overweight from Neutral with a price target of $33, up from $24. The firm is incrementally more positive on Foot Locker's margin expansion opportunity in 2024.
Morgan Stanley upgraded Six Flags (SIX) to Overweight from Equal Weight with a price target of $32, up from $29. The firm remains bullish on U.S. regional theme parks shares at current levels, with a view that industry revenue growth accelerates in 2024 and drives outperformance amid macro concerns.
Morgan Stanley upgraded Live Nation (LYV) to Overweight from Equal Weight with a price target of $110, up from $100. The fundamentals in music and live events are the healthiest in the media and entertainment sector heading into 2024, but Live Nation shares have lagged the market since the end of 2021 even as returns on capital have improved, the firm tells investors in a research note.
Barclays upgraded Paychex (PAYX) to Equal Weight from Underweight with a price target of $126, up from $107. The firm believes the company's Professional Employer Organization growth will reaccelerate in 2024.
Barclays upgraded Cognizant (CTSH) to Equal Weight from Underweight with a price target of $75, up from $61. The firm believes the new management team has made the right changes to right-size the labor pyramid and prepare the business to capture demand as it returns.
Top 5 Downgrades:
Stifel downgraded Deckers Outdoor (DECK) to Hold from Buy with a price target of $709, up from $600. While the company's momentum is strong and near-term estimates have room for upward revisions, the "generous implied multiples" at current share levels give credit for this, and as such, the firm sees limited upside from current share levels.
Morgan Stanley downgraded SeaWorld (SEAS) to Equal Weight from Overweight with a price target of $57, down from $60, on local competitive risks. Morgan Stanley remains constructive on SeaWorld's ability to benefit from an attractive and growing Orlando market, but says rising competitive offerings from both Universal and Disney could create near-term risks to estimates.
JPMorgan downgraded Stanley Black & Decker (SWK) to Underweight from Neutral with an $89 price target. Following a "strong rebound year" for building products, JPMorgan is less constructive and more selective towards the sector compared to its more positive stance on homebuilders.
Wolfe Research downgraded Northrop Grumman (NOC) to Underperform from Peer Perform with a $450 price target. The firm has concerns that the stock's valuation "may be unsustainably high in both absolute and relative terms."
Deutsche Bank downgraded Acadia Pharmaceuticals (ACAD) to Hold from Buy with an unchanged price target of $25. The firm thinks the reaction to the favorable summary judgment on pimavanserin's litigation was "slightly overdone."
Top 5 Initiations:
Seaport Research initiated coverage of Shift4 Payments (FOUR) with a Buy rating and $85 price target. In addition to reporting "strong" Q3 results, in its most recent quarterly shareholder letter, management also indicated "leaning towards finding strategic options for the company," the firm tells investors.
Wells Fargo initiated coverage of Cardinal Health (CAH) with an Underweight rating and $96 price target. The firm says the emerging disintermediation threat from Optum puts the stock's multiple expansion at risk.
Wells Fargo initiated coverage of McKesson (MCK) with an Equal Weight rating and $502 price target. The firm sees the stock's risk/reward as fairly balanced following a period of significant outperformance.
Morgan Stanley initiated coverage of WK Kellogg (KLG) with an Equal Weight rating and $13 price target. The firm sees limited sales growth potential in North America and says WK Kellogg's reinvestment needs will limit its margin expansion.
Guggenheim initiated coverage of Illumina (ILMN) with a Buy rating and $155 price target. The life sciences tools group remains a large and growing industry where innovation expands applications and opens up new markets, the firm says, adding that over time, these applications can enable the development of disruptive therapies.
