Microsoft upgraded, Nike 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:
Guggenheim upgraded Microsoft (MSFT) to Neutral from Sell and removed the firm's prior price target as "the Generative AI narrative is too positive a force to contend with." Even though the "troubling dynamics" the firm thought might develop, did as Windows has continued to struggle and Azure has struggled, the firm notes that incremental traction in the Office business due to the cumulative impact of price increases a year ago and renewals have been partially offsetting this.
Wedbush upgraded CarMax (KMX) to Outperform from Neutral with a price target of $90, up from $85. The firm says the company is near an inflection point in growth and market share performance while its profitability continues to improve on "enduring" retail strength and fixed cost leverage.
Citi upgraded Steel Dynamics (STLD) to Buy from Neutral with an unchanged price target of $130 as it believes U.S. flat rolled prices will rebound into year-end and steel company valuations are "relatively attractive." The firm believes Steel Dynamics is relatively exposed to flat rolled prices versus peers while fab downgrades appear mostly priced in. Citi also upgraded Cleveland-Cliffs (CLF) to Buy from Neutral with an unchanged price target of $22.
Jefferies upgraded AstraZeneca (AZN) to Buy from Hold with a price target of $80, up from $66.50. The company's assets outside oncology "are being largely ignored, offering significant upside optionality," the firm says.
JPMorgan upgraded Dow Inc. (DOW) to Overweight from Neutral with an unchanged price target of $55. The recent downward movement in equity values has given investors an opportunity to purchase Dow shares at a reasonable valuation, the firm says.
Top 5 Downgrades:
Jefferies downgraded Nike (NKE) to Hold from Buy with a price target of $100, down from $140. The firm believes U.S. consumers are likely to curtail spending ahead, and sees "incremental risk ahead for Nike as the wholesale channel is likely to remain pressured and growth in China faces macro headwinds.
Jefferies downgraded Foot Locker (FL) to Hold from Buy with a price target of $18, down from $28. The firm believes U.S. consumers are likely to curtail spending ahead, with apparel and footwear being the most likely areas of pullback.
Jefferies downgraded Urban Outfitters (URBN) to Hold from Buy with a price target of $31, down from $42, as consumers are likely to curtail spending ahead. Jefferies believes Urban Outfitters could be affected.
Noble Capital downgraded Lifeway Foods (LWAY) to Market Perform from Outperform with shares exceeding the firm's "recently raised" $12 price target. While "impressed" with the company's second quarter results, rising milk prices and the potential of consumers trading down in a recessionary environment lead the firm to "take a more conservative approach to valuation."
Bernstein downgraded BHP Group (BHP) to Market Perform from Outperform with a price target of $58, down from $60. With iron ore over $120 per ton, BHP's risk/reward is "not skewed to the positive," the firm tells investors in a research note.
Top 5 Initiations:
Wolfe Research initiated coverage of Instacart (CART) with a Peer Perform rating and $24-$42 fair value range. While the firm likes Instacart's competitive position in online grocery and attractive profit margins, lack of conviction on growth re-acceleration and growing competition keeps Wolfe on the sidelines.
HSBC initiated coverage of Chart Industries (GTLS) with a Buy rating and $212 price target. The firm sees U.S. clean hydrogen production capacity accelerating on the back of billions of dollars in federal stimulus.
Needham initiated coverage of Upstart (UPST) with a Hold rating and no price target. The firm notes the company has been pressured by a more difficult funding environment in recent quarters, which is causing Needham model to project a 37% decline in revenue in fiscal 2023.
Argus initiated coverage of Choice Hotels (CHH) with a Buy rating and $145 price target. The firm cites the company's "strong" Q2 results and raised guidance, while also noting its track record of navigating through difficult economic conditions.
UBS initiated coverage of TechTarget (TTGT) with a Neutral rating and $31 price target. UBS thinks most of the sales slowdown is priced in, the firm does not see any catalysts for the spending environment to improve, limiting multiple expansion.
