Penn downgraded, Roblox 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 Upgrades:
Morgan Stanley upgraded Roblox (RBLX) to Equal Weight from Underweight with a price target of $30, up from $26. The company's Q2 results were "mixed," but the shares now fairly reflect the near-term headwinds from bookings deceleration, the firm says. [Read more]
Jefferies upgraded Global Payments (GPN) to Buy from Hold with a price target of $145, up from $125, post the Q2 report. The firm notes the company's merchant growth positively de-coupled from Visa (V) and Mastercard (MA) in Q2, and says it now believes the above-market growth will persist for the balance of 2023. [Read more]
Morgan Stanley upgraded Southern Company (SO) to Equal Weight from Underweight with a price target of $69, up from $60. Vogtle construction risk is now a "diminished factor in the equity story," giving way to a "low risk" earnings outlook, supportive regulatory relationships, and strong balance sheet, the firm argues. [Read more]
Morgan Stanley upgraded Kornit Digital (KRNT) to Overweight from Equal Weight with an unchanged price target of $29. The firm believes the recent selloff in the shares is overblown and says the company's upgrade pipeline should return it to revenue growth and EBITDA profitability in 2024. [Read more]
Citi upgraded Mirati Therapeutics (MRTX) to Buy from Neutral with a price target of $48, down from $51. The firm believes Mirati's decision to reinstate its former CEO and founder as interim CEO "is a prudent one." [Read more]
Top Downgrades:
Craig-Hallum downgraded Penn Entertainment (PENN) to Hold from Buy with a price target of $30, down from $56. The process to unwind the company's relationship with Barstool "has us perplexed," the firm says, adding that while it sees "significant potential upside with ESPN Bet," it believes media partnerships in sports betting besides SkyBet in the U.K. "haven't worked to date." [Read more] Truist also downgraded Penn Entertainment to Hold from Buy with a price target of $30, down from $33. [Read more]
BofA downgraded SBA Communications (SBAC) and Crown Castle (CCI) to Neutral from Buy, citing moderating domestic growth, interest rates headwinds, elevated Sprint churn, and company-specific elements hindering AFFO per share growth. [Read more]
Deutsche Bank downgraded NeoGames (NGMS) to Hold from Buy with an unchanged price target of $29.50. The company reported "mixed" Q2 earnings versus estimates and noted the expected timeline for completion of the Aristocrat business combination remains the first half of 2024, the firm says. [Read more]
RBC Capital downgraded TaskUs (TASK) to Sector Perform from Outperform with a price target of $16, down from $21, post the Q2 report. The company lowered its fiscal 2023 revenue guidance by $33M, as a result of macro conditions. [Read more] JPMorgan also downgraded TaskUs to Neutral from Overweight with a price target of $12, down from $16. [Read more]
Roth MKM downgraded Plug Power (PLUG) to Neutral from Buy with a price target of $7.50, down from $13, after the company reported positive Q2 revenue, but with gross margins and EBITDA that was "materially below" forecasts. [Read more]
Top Initiations:
Cantor Fitzgerald initiated coverage of Zai Lab (ZLAB) with an Overweight rating and $70 price target. The firm believes peak sales potential of Zai Lab's products and pipeline are under-appreciated and expects upward earnings estimate revisions to move the stock higher. [Read more]
RBC Capital initiated coverage of CorMedix (CRMD) with an Outperform rating and $6 price target. The firm sees CorMedix's antimicrobial asset, DefenCath, as a value-add to the clinical environment and anti-infective practices. [Read more]
Goldman Sachs reinstated coverage of Option Care Health (OPCH) with a Buy rating and $41 price target. The company's core business continues to have strong momentum with revenue growth over the last four years in the low-double digits on a CAGR basis, and growth of about 10% through the first half of the year despite 200-300bps of net headwinds, the firm says. [Read more]
