Netflix downgraded, Applied Materials upgraded: 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:
Needham upgraded Applied Materials (AMAT) to Buy from Hold with an $180 price target after the firm rolled out its Wafer Fab Equipment, or WFE, estimates for 2023 and the next two years. The firm sees WFE sales at $90B, $90B and $100B for 2023, 2024 and 2025, respectively, noting that its above-consensus call on 2023 WFE accounts for the "exceptional strength" of ASML and Chinese Semicap this year.
Gordon Haskett upgraded Dollar General (DG) to Buy from Hold with a $140 price target after the company announced that former CEO Todd Vasos would be returning immediately. Vasos has the potential to bring Dollar General "Back to the Future," the analyst tells investors in a research note.
UBS analyst Colin Bristow upgraded Immunovant (IMVT) to Buy from Neutral with a price target of $55, up from $18. The company delivered a positive surprise with the disclosure of positive initial multiple-ascending dose data for IMVT-1402, which demonstrated a clean LDL/albumin profile and highly competitive IgG lowering, the firm says.
Northland upgraded SolarEdge (SEDG) to Outperform from Market Perform with a $147 price target. Solar demand is weak, Israel is at war, there is an inventory correction, a strong dollar is a headwind, and a competitor pre-announced, so "it is hard to imagine things could get much worse," the analyst tells investors.
Citi upgraded Oshkosh (OSK) to Buy from Neutral with a price target of $115, up from $110. As the machinery sector's earnings revision cycle matures, Oshkosh is an "outlier" with earnings momentum accelerating into 2024, Citi says.
Top 5 Downgrades:
Wolfe Research downgraded Netflix (NFLX) to Peer Perform from Outperform without a price target. The company's 2024 average revenue per user expectations look full while today's paid-sharing net additions will lead to tomorrow's gross adds shortfall, the analyst tells investors in a research note.
Morgan Stanley downgraded JD.com (JD) to Equal Weight from Overweight with a price target of $33, down from $55. The analyst expects the soft consumption sentiment and JD's business and strategy adjustments to continue to weigh on its revenue growth and margins in Q3. Macquarie also downgraded JD.com to Neutral from Outperform with a price target of $32, down from $52.
Oppenheimer downgraded Tractor Supply (TSCO) to Perform from Outperform with a price target of $210, down from $280. Tractor Supply represents one of the most interesting new unit growth, margin expansion opportunities, within mid-cap specialty retail over the long-term, but Oppenheimer is increasingly concerned that shares do not yet discount adequately for a potentially pro-longed, post-pandemic sales expansion lull.
BofA double downgraded Outset Medical (OM) to Underperform from Buy with a price target of $3, down from $32. After Outset pre-announced a Q3 revenue miss and lowered 2023 guidance, the firm says Outset has had "multiple execution missteps now."
Guggenheim downgraded Eversource (ES) to Neutral from Buy with a price target of $60, down from $70. Yesterday's unanimous denial of Sunrise's OREC adjustment request "marks a new low in ES' protracted attempt to exit its offshore wind JV," and the decision puts "not only the fate of this particular project in doubt, but also the entire sale process," the analyst tells investors.
Top 5 Initiations:
HSBC initiated coverage of Block (SQ) with a Hold rating and $46 price target. The shift from paper to digital forms payments has been profound, and it will continue, the analyst tells investors in a research note.
Roth MKM initiated coverage of Groupon (GRPN) with a Buy rating and $30 price target. The company's sales and cash flow were decimated during COVID and the re-opening, when cash-flush consumers and staff-shortened service merchants reduced reliance on promotions, but now, with consumers weary of high inflation amid growing signs of recession, the demand for Groupon offerings is expected to rise, the analyst says.
Scotiabank initiated coverage of American Tower (AMT) with an Outperform rating and $208 price target. The analyst thinks the data center space "is still in its early innings of growth."
HSBC initiated coverage of Capital One (COF) with a Reduce rating and $84 price target. The analyst believes Capital One's earnings risks are not fully priced into the shares.
Stephens initiated coverage of Hershey (HSY) with an Overweight rating and $240 price target. Hershey has "highly visible brands" across several key snacking categories, says the analyst, who believes Hershey is "one of the best operators across the packaged food & beverage investable universe."
