Zillow upgraded, Airbnb 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:
JMP Securities upgraded Zillow Group (ZG) to Outperform from Market Perform with a $60 price target. The firm believes consensus estimates for Zillow are too low for 2025 and 2026 given building pent-up demand and increasing expectations that rates will begin to come down in the second half of 2024.
Argus upgraded Humana (HUM) to Buy from Hold with a $550 price target. Argus views reports that Cigna (CI) and Humana have called off merger talks as positive for Humana, which has solid growth opportunities in Medicare Advantage, Medicaid and healthcare services.
RBC Capital upgraded Amgen (AMGN) to Outperform from Sector Perform with a price target of $300, up from $256. The 2024 catalyst set-up coupled with emerging clarity on out-year growth drivers is deserving of new credit as a diversifying commercial portfolio, new growth opportunities in the market, and pipeline optionality are better harmonized for sustainable share appreciation, the firm tells investors in a research note.
Piper Sandler upgraded HubSpot (HUBS) to Overweight from Neutral with a price target of $610, up from $515. The firm is also raising estimates by $60M for 2024, assuming 19.4% growth based on the combination of improving data from its 2024 CIO survey coupled with a recovery in website traffic.
Macquarie upgraded Zscaler (ZS) to Outperform from Neutral with a price target of $231, up from $166. The firm's bullish thesis is supported by Zscaler's Risk360 solution and its positioning "at the nexus of cyber threat and SEC reporting requirements trends."
Top 5 Downgrades:
Barclays downgraded Airbnb (ABNB) to Underweight from Equal Weight with a price target of $100, down from $135. The firm thinks online travel growth slows from here as eventually the "pent-up" travel demand will get exhausted - particularly as consumers' wallets are increasingly under pressure. Barclays also downgraded Expedia (EXPE) to Equal Weight from Overweight.
Citi downgraded Macy's (M) to Sell from Neutral with a $14 price target. The stock was up 20% on a Wall Street Journal report of a $21 per share bid made for the company, seemingly with a real estate angle, the firm notes, adding that "others have gone down this path before" and that is unsure how advanced the talks are.
BofA downgraded Illumina (ILMN) to Underperform from Neutral with a price target of $100, down from $140. While Illumina maintains its role as the dominant market leader in DNA sequencing, with management's outlook of "roughly similar" sales in 2024 vs. 2023, Illumina will now have gone through four years of essentially no revenue growth in its core business, despite the launch of the NovaSeqX platform, the firm tells investors in a research note.
Wells Fargo downgraded Public Storage (PSA) to Equal Weight from Overweight with a price target of $280, up from $270. The firm notes that Public Storage has challenging comps into 2024, with Street rate declines ahead of peers and large rent roll-downs.
Seaport Research downgraded AMC Networks (AMCX) to Neutral from Buy without a price target. The firm cites valuation for the downgrade with shares having achieved the firm's previous $18 price target.
Top 5 Initiations:
William Blair initiated coverage of Boeing (BA), Heico (HEI) and TransDigm (TDG) with Outperform ratings. Depressed aircraft production for the past three years, combined with "revenge travel," will result in an aftermarket "supercycle" for the next decade, the firm says.
Cantor Fitzgerald initiated coverage of FuboTV (FUBO) with an Overweight rating and $5 price target. FuboTV is one of the best pure-play ways to play cord-cutting and the associated shift of advertising dollars away from linear TV and to connected-TV, the firm says, adding that the market is overlooking FuboTV's growing importance to TV network owners as traditional Pay-TV continues to lose subscribers as well as its ability to pass through additional price increases to its subscriber base.
Morgan Stanley resumed coverage of Tapestry (TPR) with an Equal Weight rating and $38 price target. Despite a low valuation, the shares could be range-bound pending the Capri Holdings (CPRI) deal closure and integration, the firm says.
BofA initiated coverage of Crocs (CROX) with a Buy rating and $128 price target. The Crocs business has strong momentum but has been obscured by the lackluster performance and market challenges facing the HeyDude brand, the firm tells investors in a research note.
TD Cowen initiated coverage of Addus HomeCare (ADUS) with an Outperform rating and $105 price target. The firm notes management has a successful track record of growing revenues and EBITDA while generating increasing positive free cash flow.
