Pinterest upgraded, Dollar General 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 Pinterest (PINS) to Buy from Neutral with a price target of $36, up from $31. The firm left the company's analyst day "incrementally confident" that engagement can continue to ramp, advertising innovation and its full-funnel approach to advertising can deliver improving monetization trends, and adjusted EBITDA margins can expand going forward. DA Davidson also upgraded Pinterest to Buy from Neutral with a price target of $35, up from $25.
Wedbush upgraded Wingstop (WING) to Outperform from Neutral with a price target of $200, up from $180. The firm argues that Wingstop is uniquely positioned within the industry to deliver transaction growth outperformance over the medium- to longer-term beyond the first half of 2024 in any macro backdrop.
BMO Capital upgraded Goosehead Insurance (GSHD) to Outperform from Market Perform with a price target of $90, up from $86. The firm sees Goosehead's revenues bottoming at 29% in Q3 and then reaccelerating the following quarter and ultimately stabilizing in the 30%-plus range as a number of headwinds such as low-productive agent culling and overall industry-wide home and auto profits normalize.
Argus upgraded Regency Centers (REG) to Buy from Hold with a $70 price target. The firm's upgrade is based on the stock's valuation, an increase in new assets following the August completion of its acquisition of Urstadt Biddle, and improving leasing statistics.
TD Securities upgraded Louisiana-Pacific (LPX) to Buy from Hold with an unchanged price target of $78.. The firm cites the "sharp valuation correction" since the company's tempered second half of 2023 siding guidance for the upgrade.
Top 5 Downgrades:
JPMorgan downgraded Dollar General (DG) to Underweight from Neutral with a price target of $116, down from $132. The firm notes management sees excess savings for the middle-income cohort on pace to be depleted by the end of fall 2023 and potential for sequential worsening tied to student loan repayments.
Oppenheimer downgraded Chewy (CHWY) to Perform from Outperform without a price target. The firm expects a more challenging backdrop for Chewy to persist for at least a few more quarters, amid recent signs of weakness in the historically resilient pet food category and the potential for more muted inflation benefits in fiscal 2024.
Morgan Stanley downgraded Zebra Technologies (ZBRA) to Underweight from Equal Weight with a price target of $220, down from $260. The firm says growth headwinds challenge the company's growth rebound for next 12-24 months.
Raymond James downgraded Ventas (VTR) to Outperform from Strong Buy with a price target of $53, down from $55. The firm remains attracted to Ventas' exposure to seniors housing and discounted valuation, though has less conviction after Q2's disappointing seniors housing operating results and increasing concerns over the 2025 Kindred lease maturity that might need to be restructured.
Morgan Stanley downgraded nCino (NCNO) to Underweight from Equal Weight with an unchanged price target of $24. The company's fiscal 2025 consensus estimates look too high when accounting for recent bookings performance and potential revenue headwinds from recent bank closures, the firm tells investors in a research note.
Top 5 Initiations:
Needham initiated coverage of Instacart (CART) with a Hold rating and no price target. Given slowing growth in the years following a pandemic-driven demand surge and Instacart's "already scaled" advertising business, the firm sees a balanced risk reward following the company's IPO.
Needham initiated coverage of Lululemon Athletica (LULU) with a Buy rating and $470 price target. The firm expects double-digit sales growth, saying the company's accelerating technical innovation will drive demand across both core franchises and newer play verticals like tennis and golf.
RBC Capital initiated coverage of IBM (IBM) with an Outperform rating and $188 price target. The firm is "optimistic on the competitive positioning and unique role" that IBM plays in the tech ecosystem.
Rosenblatt initiated coverage of Sonos (SONO) with a Buy rating and $20 price target. While there are some near-term headwinds,it is "only a matter of time" before demand trends improve, setting the company up for the "double-barreled benefit" of revenue acceleration and margin expansion, the firm tells investors in a research note.
JMP Securities resumed coverage of CoStar Group (CSGP) with an Outperform rating and $100 price target. As the dominant information and analytics platform within commercial real estate, CoStar is well positioned to continue growing its Multifamily and Residential business lines as it can subsidize aggressive investment with strong profitability and free cash flow from its growing Information & Analytics segment, the firm says.
