Microsoft initiated, Hertz 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:
Leerink upgraded Incyte (INCY) to Outperform from Market Perform with a $78 price target following the recent hematology meeting, ASH. The firm's previously rating had been based on concerns about the Jakafi patent cliff and the perceived lack of R&D productivity, but with a new head of R&D, it appears the company has refocused efforts and is "leveraging dominance in myeloproliferative diseases."
Piper Sandler upgraded Q2 Holdings (QTWO) to Neutral from Underweight with a price target of $41, up from $30. The firm is "increasingly more comfortable" on improving fundamentals for Q2 looking out over the next 12-18 months.
Morgan Stanley upgraded MSCI (MSCI) to Overweight from Equal Weight with a price target of $600, up from $526. The firm cites MSCI's defensive characteristics and growth opportunities for the upgrade.
Wells Fargo upgraded RxSight (RXST) to Overweight from Equal Weight with a price target of $42, up from $31. The firm believes RxSight's light adjustable lens technology for cataracts has reached an inflection point and its new LAL+ will expand the market in 2024.
Keefe Bruyette upgraded Opendoor Technologies (OPEN) to Market Perform from Underperform with a price target of $3.50, up from $1.65. The firm cites a lack of downside catalysts for the upgrade but admits the firm's conviction level is low.
Top 5 Downgrades:
Wells Fargo downgraded Johnson & Johnson (JNJ) to Equal Weight from Overweight with a price target of $163, down from $170. The company's earnings growth will be "muted" the next few years due to the Stelara loss of exclusivity and its medical technology growth targets "seems optimistic," the firm tells investors in a research note.
Exane BNP Paribas downgraded Ford (F) to Neutral from Outperform with a $12 price target. Today's battery electric vehicle weakness "is merely the tip of a melting iceberg as affordability constraints bite," the firm tells investors in a research note.
Oppenheimer downgraded Hertz (HTZ) to Perform from Outperform as the firm believes next year will be a transition year for the company. Hertz will face several headwinds in 2024, including significant ongoing challenges to its EV initiative, higher vehicle interest expense, and higher DPU.
Citi downgraded Church & Dwight (CHD) to Sell from Neutral with an unchanged price target of $90. The firm views the stock's relative valuation as "too elevated" after the 2023 outperformance.
Wells Fargo downgraded Inspire Medical (INSP) to Equal Weight from Overweight with a price target of $187, down from $245, ahead of Eli Lilly's (LLY) SURMONT-OSA data in the first half of 2024 and uncertainty in how the OSA treatment paradigm will change.
Top 5 Initiations:
Truist initiated coverage of Microsoft (MSFT) with a Buy rating and three-year price target of $600. The firm believes Microsoft can grow revenue and free cash flow in the mid-teens, driven by upside to consensus numbers in artificial intelligence, Azure, and Copilot, "which could propel shares to compounding strong gains."
Wells Fargo initiated coverage of Roblox (RBLX) with an Overweight rating and $49 price target. The firm views Roblox as a growing audience platform with "deep" engagement, rather than a gaming platform.
William Blair resumed coverage of AutoZone (AZO) with an Outperform rating. The firm believes there is room for multiple expansion in line with the company's peers on a continued acceleration in do-it-from-home comps, which should ease investor concerns around demand volatility.
William Blair resumed coverage of Advance Auto Parts (AAP) with a Market Perform rating. While the firm is encouraged by the new management team's efforts to streamline core operations and reduce costs, it says Advance Auto is in the very early days of executing against its strategic review.
B. Riley initiated coverage of Vizio (VZIO) with a Buy rating and $11 price target. The firm believes Vizio has a "strong hand" to play in a rapidly growing -- and likely consolidating -- TV operating system industry.
