Micron upgraded, PayPal 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:
Deutsche Bank upgraded Micron Technology (MU) to Buy from Hold with a price target of $85, up from $65. The firm expects Micron to guide fiscal Q1 revenue and earnings above current Street estimates with commentary suggesting further improvement in the next few quarters.
Wedbush upgraded Carvana (CVNA) to Neutral from Underperform with a price target of $48, up from $40. The recently completed debt exchange and improving profitability could drive upside in Q3 and Q4, as well as "give the company at least two years of breathing room to execute," the firm says.
Guggenheim upgraded Ralph Lauren (RL) to Buy from Neutral and established a $166 price target on the shares, which the firm says represents about 45% potential upside from current levels. The firm is increasing its FY24 and FY25 EPS estimates to above consensus, citing its belief that there are opportunities to deliver better than previously expected gross margins, aided by clean inventories, lower freight expenses, and lower cotton prices.
Wells Fargo upgraded L3Harris Technologies (LHX) to Overweight from Equal Weight with a price target of $209, up from $204. Government shutdown fears could provide an attractive entry point near-term for defense stocks, the firm says. Wells also upgraded Lockheed Martin (LMT) to Equal Weight from Underweight with an unchanged price target of $440.
Mizuho upgraded DoorDash (DASH) to Buy from Neutral with a price target of $105, up from $90. The firm is confident that the company's' gross-order-value growth rate should outperform guidance and Street expectations in the second half of 2023.
Top 5 Downgrades:
MoffettNathanson downgraded PayPal (PYPL) to Market Perform from Outperform with a $75 price target ten days ahead of PayPal's new CEO, Alex Chriss, stepping into the role.
Redburn downgraded Global Payments (GPN) to Sell from Neutral with a $105 price target. Global Payments is "particularly exposed to payment processing competition," with limited product differentiation, but the stock is currently commanding top decile margins in the S&P 500, the firm says.
William Blair downgraded NetApp (NTAP) to Market Perform from Outperform without a price target. The firm is questioning NetApp's ability to execute in the cloud space, successfully integrate key acquisitions, and expand its cloud storage portfolio beyond a relatively narrow set of use-cases.
Jefferies downgraded Planet Fitness (PLNT) to Hold from Buy with a price target of $56, down from $90. Jefferies believes the recent leadership change, higher interest rates, and ongoing inflationary pressures are likely to continue to impact the company's near-term growth potential.
William Blair downgraded Dropbox (DBX) to Market Perform from Outperform without a price target. The company has "lackluster" growth prospects for 2024 given a lapping of the Teams plan price increase and tough compares related to the inorganic revenue growth from FormSwift in 2023, the firm tells investors in a research note.
Top 5 Initiations:
Bernstein initiated coverage of Arm Holdings (ARM) with an Underperform rating and $46 price target. The stock has been given a premium valuation on hopes the company will be a beneficiary of rising artificial intelligence adoption, but it is too soon to declare the company an AI winner, the firm says.
Raymond James initiated coverage of Disney (DIS) with an Outperform rating and $97 price target. Media companies are grappling with the transition from the profitable but declining Linear TV to the mostly unprofitable but growing streaming business, and Disney's assets position it well to navigate this transition, the firm argues.
Northland initiated coverage of Ambarella (AMBA) with an Outperform rating and $70 price target. The supplier of computer vision SoC and video processors is developing solutions for autonomous vehicles and AI-enabled IoT devices, notes the firm, which believes these efforts are "creating significant value for shareholders over the long term."
UBS initiated coverage of BioMarin Pharmaceutical (BMRN) with a Buy rating and $120 price target. The firm believes the company is "turning a corner" with its recent transition to profitability and two major product approvals secured with launches underway.
Raymond James initiated coverage of Warner Bros. Discovery (WBD) with an Outperform rating and $19 price target. The firm believes the WarnerMedia-Discovery merger has brought together two complementary streaming services and created additional scale through the Max integration, which should drive better subscriber acquisition, lower churn, and stronger pricing power. Raymond also coverage of Paramount Global (PARA) with a Market Perform rating and no price target.
