Oracle upgraded, Spotify 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:
Evercore ISI upgraded Oracle (ORCL) to Outperform from In Line with a price target of $135, up from $131. The firm believes the recent pullback in shares "creates a more interesting entry point" for a business that is now in a better position to deliver more consistent revenue and earnings growth due to a higher percentage of revenue coming from cloud solutions.
Goldman Sachs double upgraded Lennox (LII) to Buy from Sell with a price target of $455, up from $332. The firm says as residential heating, ventilation, and air conditioning volumes are likely bottoming, the company's commercial margin improvement is not done, and it should continue to beat estimates going forward.
Barclays upgraded Zscaler (ZS) to Overweight from Equal Weight with a price target of $190, up from $176. The firm is making a "positioning call," as it likes the growth opportunity in secure access service edge.
Baird upgraded On Holding (ONON) to Outperform from Neutral with an unchanged price target of $33. With On's current valuation consistent with the low end of its early-stage growth factor framework, Baird sees increasing appeal for the company on a one- and multi-year basis.
Jefferies upgraded Aramark (ARMK) to Buy from Hold with a price target of $29, down from $44. The firm says Aramark's margin expectations have been reset and lagging price dynamics in fiscal 2024 should provide a "nice lift."
Top 5 Downgrades:
Redburn Atlantic downgraded Spotify (SPOT) to Neutral from Buy with a price target of $160, down from $170. The firm's Buy thesis on Spotify was based on margin expansion, but it now estimates the company's new audiobook offer will be gross margin dilutive.
BofA downgraded Datadog (DDOG) to Neutral from Buy with a price target of $105, down from $123. Based on recent checks with developers, partners and system installers, the demand environment has not meaningfully improved, the firm tells investors.
Oppenheimer downgraded Apollo Global (APO) to Perform from Outperform without a price target, citing valuation for the downgrade as the shares have traded through the firm's prior price target.
Barclays downgraded Tenable Holdings (TENB) to Equal Weight from Overweight with a price target of $47, down from $51. The firm says the vulnerability management category down-ticked in its latest chief investment office survey.
JMP Securities downgraded Mirati Therapeutics (MRTX) to Market Perform from Outperform without a price target after Bristol Myers Squibb (BMY) said it will acquire Mirati for $58 per share plus a contingent value right worth up to $12 per share. Jefferies and JonesResearch also downgraded Mirati to Neutral-equivalent ratings.
Top 5 Initiations:
Citi initiated coverage of Arm (ARM) with a Buy rating and $65 price target as it believes Arm remains the leading provider of independent silicon intellectual property in the semiconductor market. Goldman Sachs, Loop Capital, Rosenblatt, Barclays, BofA, Jefferies, Deutsche Bank, JPMorgan, Guggenheim and TD Cowen also initiated coverage of Arm with Buy-equivalent ratings. Not as bullish, however, Wolfe Research, BMO Capital and HSBC started coverage of the name with Neutral-equivalent ratings.
Citi reinstated coverage of Flowserve (FLS) with a Buy rating and $46 price target. The company is working toward diversifying its end market exposure as well as improving its operational execution that should position it to deliver on its 2027 financial targets, the firm tells investors in a research note.
BofA initiated coverage of Motorola Solutions (MSI) with a Buy rating and $330 price target. The firm says Motorola Solutions' recurring revenues continues to grow, while it is well positioned with "multiple tailwinds supporting growth."
H.C. Wainwright initiated coverage of Cibus (CBUS) with a Buy rating and $25 price target. The firm says the company has a stronger technology and structural position post the merger with Calyxt.
BMO Capital initiated coverage of Prime Medicine (PRME) with an Outperform rating and $19 price target. BMO believes Prime's near-term partnerships and key catalysts in the gene editing space can drive upside.
