Lowe's upgraded, General Mills 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:
Bernstein upgraded Lowe's (LOW) to Outperform from Market Perform with a price target of $282, up from $252. The firm sees a "confluence of positive and mutually reinforcing trends" for Lowe's that should continue.
TD Cowen upgraded Domino's Pizza (DPZ) to Outperform from Market Perform with a price target of $450, up from $420. The firm forecasts the "enticing" U.S. sales narrative from the Uber (UBER) partnership and self- help initiatives to drive positive sales revisions and organic EPS beats.
Barclays upgraded Oracle (ORCL) to Overweight from Equal Weight with a price target of $150, up from $126. The firm sees a "multi-year opportunity for solid growth at high margins," driven by an ongoing positive mix effect of better software-as-a-service and cloud outweighing the lower growth parts of the business.
RBC Capital upgraded American Express (AXP) to Outperform from Sector Perform with a price target of $200, up from $197. The firm is "tactically adjusting" its credit card stock preferences for the near-term.
Bernstein upgraded Lululemon (LULU) to Market Perform from Underperform with a price target of $366, up from $328. The firm likes the business long-term and sees "less risk of unrealistic expectations" in the short-term.
Top 5 Downgrades:
Exane BNP Paribas downgraded General Mills (GIS) to Neutral from Outperform with a $72 price target. After over a decade of consistent share gains, premium dog food is losing share, the firm tells investors.
RBC Capital downgraded Synchrony Financial (SYF) to Sector Perform from Outperform with a price target of $37, down from $41. RBC sees near-term sentiment risk from the Consumer Financial Protection Bureau's late fee proposal, and some potential sentiment risk from ongoing normalization of credit quality and spending trends.
UBS downgraded ResMed (RMD) to Neutral from Buy with a price target of $170, down from $265. The stock is down 28% since FY23 results as the GLP-1 weight loss thesis "has now become firmly rooted in the RMD story," the firm notes.
UBS downgraded FMC Corporation (FMC) to Neutral from Buy with a price target of $97, down from $120. The speed of June quarter volume declines caught FMC, the industry, and UBS "off guard," the firm says, adding that a lack of visibility on volumes creates a headwind for the company's earnings and perceptions.
Compass Point downgraded Innovative Industrial Properties (IIPR) to Neutral from Buy with a price target of $95, down from $100. While the firm thinks there were some positive signs in the first eight months of 2023 for the marijuana industry, it does not think this will help marijuana operators obtain debt financing from regulated financial institutions.
Top 5 Initiations:
Citi initiated coverage of HubSpot (HUBS) with a Buy rating and $695 price target. Citi views HubSpot as a core holding with its "unique" small business acquisition and upsell motion still in the early innings with potential to expand upmarket.
RBC Capital initiated coverage of Paychex (PAYX) with a Sector Perform rating and $130 price target. The firm wants to monitor macro headwinds weighing on employment, new business formation, and spending before getting more constructive on the shares.
RBC Capital initiated coverage of ADP (ADP) with a Sector Perform rating and $267 price target. While the firm wants to monitor macro headwinds, it notes ADP is gaining market share in a large and growing addressable market of $150B and has a diversified revenue portfolio.
Citi initiated coverage of ZoomInfo (ZI) with a Neutral rating and $19 price target. The firm believes ZoomInfo's medium- and long-term growth may be challenged with its software vertical concentration and rising price competition at the low end.
UBS initiated coverage of Dine Brands (DIN) with a Buy rating and $68 price target. The company's scale and heavily franchised business model provide "unique" free cash flow stability within casual dining, while its core brands Applebee's and IHOP are category leaders, the firm says.
