Spotify downgraded, Tractor Supply 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:
DA Davidson upgraded Tractor Supply (TSCO) to Buy from Neutral with a price target of $280, up from $250, in conjunction with the firm's "Best-of-Breed Bison" initiative, which focuses on "best in class" companies with sustainable competitive moats. The firm believes Tractor Supply fits 11 of the 12 criteria required to qualify as a "Best-of-Breed Bison" name within the firm's framework.
DA Davidson upgraded Redfin (RDFN) to Neutral from Underperform with a price target of $8, down from $8.50. The stock's 55% decline since July 12 creates a more balanced risk/reward, the firm tells investors in a research note.
JPMorgan upgraded Huntington Ingalls (HII) to Overweight from Neutral with a price target of $247, down from $250. Huntington is down 10% the past three months on little news, and while it has been a tough market for defense stocks, the selloff creates an attractive entry point, the firm argues.
JPMorgan upgraded DigitalBridge (DBRG) to Overweight from Neutral with a price target of $25, up from $19. The firm believes the "transformed" DigitalBridge is a direct way for investors to benefit from digital infrastructure investment management on a global basis without being fully invested to one vertical or region.
More bullish on the name, Northcoast upgraded Essential Utilities (WTRG) to Buy from Neutral. The firm has a price target on $42 on the shares.
Top 5 Downgrades:
Monness Crespi downgraded Spotify (SPOT) to Neutral from Buy ahead of the company's scheduled report of its Q3 results on October 24. The firm cites the recent outperformance and "mounting concerns" about the potential collateral damage from the current downturn for stepping to the sidelines.
JPMorgan downgraded NextEra Energy Partners (NEP) to Neutral from Overweight with a price target of $40, down from $69. The company significantly lowered its targeted dividend growth based on an inability to accretively add drop-downs from parent company NextEra Energy (NEE), owing to an elevated cost of capital, the firm says. Oppenheimer also downgraded NextEra Energy Partners to Perform from Outperform without a price target.
KeyBanc downgraded Terex (TEX) to Sector Weight from Overweight without a price target. The firm thinks order rates could moderate from recently elevated levels at the same time supply chain improvements allow for revenue increases and faster backlog monetization.
KeyBanc downgraded Oshkosh (OSH) to Sector Weight from Overweight without a price target. The firm says "potential signs of bad news" will have an outsized negative impact on the shares relative to the potential upside good news could provide.
H.C. Wainwright downgraded Galecto (GLTO) to Neutral from Buy without a price target after the company decided to explore strategic alternatives to maximize shareholder value.
Top 5 Initiations:
Deutsche Bank initiated coverage of Boeing (BA) with a Hold rating and $204 price target. The firm thinks Boeing can deliver $22 in free cash flow per share and a net cash balance sheet by 2027, but notes that "the stock looks nearly fairly valued against it."
Deutsche Bank initiated coverage of Lockheed Martin (LMT) with a Hold rating and $435 price target. The firm sees recent commentary on inflation-driven margin pressure as a concern, particularly with Lockheed increasingly trading on margin performance rather than revenue.
Bernstein initiated coverage of Thermo Fisher (TMO) with an Outperform rating and $603 price target. The firm says the U.S. life science tools and diagnostics has the same positives as other healthcare sub-sectors, like enduring growth drivers, customers with locked-in processes, increasingly higher-margin/higher recurring revenue, and positive price, as well as a few of the negatives, like high levels of risk from pharma's patent cliffs and managed care mis-pricing.
UBS initiated coverage of Trade Desk (TTD) with a Buy rating and $100 price target. The firm expects a more accelerated cadence of linear advertising budget migrations to connected TV in the U.S.
Deutsche Bank initiated coverage of TransDigm (TDG) with a Buy rating and $1,001 price target. The stock has a significant and growing balance sheet optionality and trades at a reasonable valuation relative to the underlying quality of its assets, the firm says.
