PepsiCo downgraded, Chewy 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:
Goldman Sachs upgraded Chewy (CHWY) to Buy from Neutral with a price target of $50, up from $39. The firm sees a more positive risk/reward skew at current levels and is increasingly more positive on Chewy's ability to maintain 10%-plus sales growth from 2023 to 2027. [Read more]
Goldman Sachs upgraded Yelp (YELP) to Buy from Neutral with a price target of $47, up from $39. The firm sees a "broadly stable-to-improving environment" for digital advertising in Q2 against lowered expectations. [Read more]
JPMorgan upgraded Progressive (PGR) to Overweight from Neutral with an unchanged price target of $146. The company's June results were "poor" but do not alter the long-term view of the company's earnings power and growth potential, JPMorgan tells investors in a research note. [Read more]
B. Riley upgraded Cohu (COHU) to Buy from Neutral with a price target of $50, up from $38. The firm believes a "slew of substantive" operations and product gains are underway this downcycle to position the company for strong revenue acceleration with gross margin expansion when spending inflects. [Read more]
Jefferies upgraded Paccar (PCAR) to Buy from Hold with a price target of $115, up from $85. The firm believes chances for a meaningful truck downturn in 2024 are fading, and continues to expect strong industry growth in 2025-2026 ahead of 2027 emissions regulations. [Read more]
Top 5 Downgrades:
Morgan Stanley downgraded PepsiCo (PEP) to Equal Weight from Overweight with an unchanged price target of $210 following the "strong" Q2 report. The shares are now fairly valued post the large outperformance as the catalysts played out, the firm says. [Read more]
Odeon Capital downgraded Wells Fargo (WFC) to Hold from Buy with a $43.75 price target. While the reported earnings of $1.25 per share for Q2 were "positive," a deeper look into the company's results "suggests that it seems to have stalled in its recovery" and it appears that the company's real book value is "well below its stated book value," the firm tells investors. [Read more]
Piper Sandler downgraded Twilio (TWLO) to Neutral from Overweight with a price target of $71, up from $56. While Twilio may be finding more stability than prior quarters as crypto and other headwinds abate, the macro environment uncertainty and recent divestitures will create "messiness" for sales estimates ahead that are likely too high, says the firm. [Read more]
Citi downgraded AT&T (T) to Neutral from Buy with a price target of $16, down from $22. The firm believes the telecommunication industry's historical use of lead sheathed cabling is likely to remain an overhang for the stocks and valuations for at least a few months and potentially longer until the market can better measure the financial risk. [Read more]
KeyBanc downgraded Yeti (YETI) to Underweight from Sector Weight with a $34 price target ahead of quarterly results. Building on intra-quarter work, the firm thinks recent price action, macro pressures, competitor brand heat, and heavy inventory add risk to Q4+ results and the return to a positive double-digit annual growth algorithm. [Read more]
Top 5 Initiations:
Barclays initiated coverage of Saia (SAIA) with an Overweight rating and $420 price target. Saia is likely to continue gaining market share through its ongoing expansion strategy, with further earnings upside driven by mix improvements and closing a pricing gap to peers, the firm tells investors in a research note. [Read more]
BofA resumed coverage of Lucid Group (LCID) with a Neutral rating and $8 price target. The firm has reduced its Q2 and 2023 EBIT estimates after Q2 deliveries came in below its forecast and although it is not making meaningful adjustments for 2024 and later, BofA notes that it plans to revisit this following additional commentary during earnings reporting. [Read more]
Barclays initiated coverage of Old Dominion Freight Line (ODFL) with an Equal Weight rating and $375 price target. The firm expects Old Dominion to continue gaining share over the next cycle, but with competition improving service, it expects the company's volume outperformance to be a bit less than in years past. [Read more]
Citi initiated coverage of BeiGene (BGNE) with a Buy rating and $275 price target. Citi's survey of 85 U.S. hematologists/oncologists suggests BeiGene's flagship asset Brukinsa is positioned to become the favored BTK inhibitor for chronic lymphocytic leukemia patients starting first-line therapy. [Read more]
HSBC initiated coverage of Epam Systems (EPAM) with a Hold rating and $255 price target. The firm believes the company's gross margins are likely to remain below peers and that its earnings momentum "looks weak in the short term." [Read more]
