HP Inc. upgraded, Airbnb 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:
BofA double upgraded HP Inc. (HPQ) to Buy from Underperform with a price target of $33, up from $25, based on its expectation of the company achieving a bottom in free cash flow in FY23 and driving subsequent growth from an improving PC outlook and lower restructuring costs.
BofA upgraded Booz Allen (BAH) to Buy from Neutral with a price target of $130, up from $110. Booz Allen, which reported "strong" fiscal Q1 organic growth and hiring momentum, has "unique exposure" to rapidly growing technologies and modernization efforts supports strong organic growth in the near-term.
Jefferies upgraded Wingstop (WING) to Hold from Underperform with a price target of $170, up from $150. The firm sees a "diminishing overhang" from the company's same-store-sales deceleration in the second half of 2023 with expectations reflecting a more realistic, conservative bar.
Evercore ISI upgraded Warby Parker (WRBY) to Outperform from In Line with a $20 price target. The firm sees a "fundamental inflection story" based on Warby's product marketing developments.
Truist upgraded Oddity (ODD) to Buy from Hold with an unchanged price target of $54 following the company's positive pre-announcement for Q3, citing what the firm calls "a compelling valuation."
Top 5 Downgrades:
KeyBanc downgraded Airbnb (ABNB) to Sector Weight from Overweight without a price target. The company's margins have reached a near-term peak and its revenue growth could decelerate to 11% year-over-year in 2024 as room night and average daily rate growth moderates, the firm tells investors in a research note.
Raymond James downgraded SunPower (SPWR) to Outperform from Strong Buy with a price target of $9, down from $17. The firm it is concerned that SunPower faces a "particularly high risk vis-a-vis inventories."
Loop Capital downgraded Ingevity (NGVT) to Hold from Buy with a price target of $53, down from $62. The surge in energy prices could underpin another upward move in feedstock costs, representing a sustained headwind for the company's Pine Chemicals business' margins, the firm says.
Redburn Atlantic downgraded Getty Images (GETY) to Neutral from Buy with a $6 price target. The slowdown in sales of Getty and Shutterstock shows a strong correlation to the advertising sales of the top digital advertising companies, the firm tells investors in a research note.
UBS downgraded Emerson Electric (EMR) to Neutral from Buy with a price target of $104, up from $97. The stock's valuation now screens full based on a sum-of-the-parts analysis, the firm says.
Top 5 Initiations:
Goldman Sachs initiated coverage of WK Kellogg (KLG) with a Sell rating and $11 price target. While the firm sees near-term margin expansion potential on favorable input costs, the company's productivity programs are likely to be back-end weighted in FY26 and partially predicated on a manufacturing network rationalization that is currently impeded by the plant closure moratorium that it entered into with its unions in late 2021.
UBS initiated coverage of Interactive Brokers (IBKR) with a Buy rating and $113 price target as the company's business model is well positioned to offset softening retail volumes.
BofA initiated coverage of Dycom (DY) with a Buy rating and $120 price target, implying about 40% potential upside. The company enjoys a strong infrastructure project backlog, is well positioned to monetize incremental telecom and cable company wireline buildouts and has "a big opportunity" to capture a portion of the forthcoming $42B of BEAD funding allocated to develop broadband access in unserved and underserved communities, the firm tells investors.
Benchmark initiated coverage of Potbelly (PBPB) with a Hold rating and no price target. While "very constructive" on the brand inflection that the current team is driving, the firm argues that near-term macroeconomic headwinds faced by the consumer outweigh the continued operating and financial improvements that the current management team has shown over the past three years.
Goldman Sachs initiated coverage of Trex Company (TREX) with a Buy rating and $78 price target. Trex is well positioned to leverage favorable secular shifts along with company-specific initiatives to drive growth and profitability ahead of its broader building products peers, the firm says.
