Netflix upgraded, Foot Locker 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:
Morgan Stanley upgraded Netflix (NFLX) to Overweight from Equal Weight with a price target of $475, up from $430, following quarterly results. The firm now believes Netflix will deliver the objectives it set out a year ago, accelerate revenue growth back to double digits and expand margins. Truist and KeyBanc also upgraded the stock to Buy-equivalent ratings following last night's earnings report from the streaming entertainment giant.
JPMorgan upgraded First Solar (FSLR) to Overweight from Neutral with a price target of $220, down from $239. Following a "very volatile" last few months for alternative energy stocks, the Q3 results should be an "important catalyst, helping to buoy better positioned stocks that have been dragged down with the overall space," the firm argues.
Goldman Sachs upgraded Best Buy (BBY) to Buy from Neutral with a price target of $85, up from $79. The firm sees the potential for a positive demand inflection to drive upside, primarily through multiple expansion.
Deutsche Bank upgraded Spirit AeroSystems (SPR) to Buy from Hold with a price target of $30, up from $16, following the memorandum of understanding with Boeing (BA). The firm updated forecasts for the higher 787 shipset pricing described in Spirit's regulatory filing.
Jefferies upgraded Crowdstrike (CRWD) to Buy from Hold with a price target of $225, up from $170. The firm says that while the environment remains challenged, it has seen enough positive data to become increasingly positive on the high growth platforms. Jefferies also upgraded Zscaler (ZS) to Buy from Hold.
Top 5 Downgrades:
Goldman Sachs downgraded Foot Locker (FL) to Sell from Neutral with an $18 price target. The repositioning of the Champs Sports brand will likely continue to weigh on the comp and Foot Locker's market share position will be difficult to stabilize following the Nike (NKE) allocation changes, the firm tells investors in a research note.
BofA downgraded Peloton (PTON) to Underperform from Neutral with a price target of $4.15, down from $6.50. The current share price does not reflect risk to revenue from increased churn, the firm tells investors.
Jefferies downgraded Fortinet (FTNT) to Hold from Buy with a price target of $65, down from $85. The firm continues to remain favorable on Fortinet's longer-term position as a cyber platform, but expects the company's "hardware digestion" to last at least several quarters.
Wells Fargo downgraded Canada Goose (GOOS) to Equal Weight from Overweight with a price target of C$20, down from C$25. With a tough macro backdrop developing in both the U.S. and China, as well as expected unfavorable weather conditions this holiday, the firm is moving to the sidelines. TD Cowen also downgraded Canada Goose to Market Perform from Outperform with a price target of $15, down from $22.
Wells Fargo double downgraded Graphic Packaging (GPK) to Underweight from Overweight with a price target of $19, down from $26, given the firm's view that sustained food/beverage inflation and emergent GLP adoption could pressure already weakened boxboard fundamentals.
Top 5 Initiations:
Deutsche Bank initiated coverage of Starbucks (SBUX) with a Buy rating and $118 price target. The firm believes Starbucks is well positioned to deliver on its 15%-20% earnings growth algorithm.
Deutsche Bank initiated coverage of Chipotle (CMG) with a Buy rating and $2,375 price target. Chipotle is "a rare compounding growth story," well positioned for sustainable mid-single digit plus growth in same-store sales, unit growth acceleration and margin expansion, the firm tells investors.
BofA initiated coverage of Match Group (MTCH) with a Buy rating and $52 price target. Monetization efforts under CEO Bernard Kim, strong growth at Hinge, and an improvement in Tinder user trends are expected to drive an acceleration in revenue and EBITDA expansion in 2024, the firm tells investors in a research note.
Deutsche Bank initiated coverage of Yum! Brands (YUM) with a Hold rating and $131 price target. The firm says Yum's pure-play 98% franchised business model and diversified portfolio supports high visibility into its low double-digit earnings growth algorithm, but this is largely priced into the shares.
BofA reinstated coverage of Chewy (CHWY) with an Underperform rating and $16 price target. The firm says weakening pet e-commerce fundamentals are pressuring the company's revenue growth and margin expansion.
