O'Reilly upgraded, Yeti 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:
Citi upgraded O'Reilly Automotive (ORLY) to Buy from Neutral with a price target of $1,040, up from $983. The firm thinks the recent pullback in the shares presents an attractive buying opportunity "for the stable, defensive retail stock."
Needham upgraded Ceridian (CDAY) to Buy from Hold with an $82 price target. A positive customer conference confirmed the firm's recent HCM channel conversations on stabilizing sales churn and improved win rates in the enterprise customer segment, the firm tells investors in a research note.
BofA upgraded Trane Technologies (TT) to Neutral from Underperform with a price target of $210, up from $187. The company continues to outperform peers on revenue, adjusted earnings and free cash flow conversion, the firm tells investors in a research note.
BofA upgraded Parker-Hannifin (PH) to Buy from Neutral with a price target of $475, up from $435. The firm calls Parker-Hannifin a "good company for uncertain times" and sees it having "long runway" for a re-rating of the shares.
RBC Capital upgraded Beacon (BECN) to Outperform from Sector Perform with a price target of $94, up from $91. The firm's roofing industry checks point to upside to guidance driven by residential roofing.
Top 5 Downgrades:
Citi downgraded Tractor Supply (TSCO) to Neutral from Buy with a price target of $207, down from $250. The operating environment is getting tougher for Tractor Supply as big-ticket weakness continues, disinflation weighs on same-store-sales, and home-related spending slows, the firm argues.
Exane BNP Paribas downgraded Yeti (YETI) to Neutral from Outperform with a price target of $42, down from $54. While the recall of soft coolers makes it hard to assess Yeti's underlying demand, the firm's work suggests the company's trends are slowing.
Raymond James downgraded Clorox (CLX) to Market Perform from Outperform without a price target after the company provided an update on fiscal Q1 that was significantly worse than expected due to the recent cybersecurity attack.
Citi downgraded Floor & Decor (FND) to Neutral from Buy with a price target of $90, down from $122. The firm believes it is prudent to shift to a Neutral rating given the threat of higher rates for longer to existing home sales and home improvement spending.
Jefferies downgraded Marriott Vacations (VAC) to Hold from Buy with a price target of $112, down from $150. The concerns over the macroeconomic outlook, notably consumer credit and interest rates, "are driving a separation of timeshare business merits from valuations," the firm says.
Top 5 Initiations:
BofA initiated coverage of Wingstop (WING) with a Buy rating and $218 price target. The firm set its price target based on steady state earnings power at 7,000 U.S. stores and thinks that with only 6% share that Wingstop should continue to outpace the LSR chicken segment.
Rosenblatt initiated coverage of Fabrinet (FN) with a Buy rating and $230 price target. Fabrinet, which makes very-short reach active optical cables, or AOCs, with 800G transceivers for Nvidia (NVDA) is "one of the earliest and most direct beneficiaries of the strong ramp" of the AI 800G Optical supply chain, the firm tells investors.
BofA reinstated coverage of Cheesecake Factory (CAKE) with a Neutral rating and $33 price target. The firm notes margins are being pressured near-term by the longer maturity curve and in addition to margin headwinds, and sees risk to topline growth from slower consumer spending and "still somewhat untested brand portability."
BofA reinstated coverage of Jack in the Box (JACK) with a Buy rating and $85 price target. The company's data driven approach has translated into higher restaurant volumes and structurally higher franchisee returns, "the linchpin of unit growth," the firm says.
BofA initiated coverage of Shake Shack (SHAK) with a Neutral rating and $66 price target. Shake Shack's average unit volumes are stabilizing and pricing will likely moderate, the firm tells investors.
