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Wednesday’s Biggest Calls on Wall Street
Barclays Downgrades Tesla to Equal Weight
Barclays downgraded Tesla stock from overweight to equal weight citing challenging near-term fundamentals and stock performance amid recent rallies that are too sharp. The firm questioned the margins and demand elasticity as bullish on long-term opportunity but noted that LT initiatives would take time to show through.
Goldman Sachs Upgrades Petrobras to Buy
Goldman Sachs upgraded Petrobras from neutral to buy as the Brazilian petroleum company has an attractive valuation. The firm said there remains some uncertainty, but it sees PBR trading at an undemanding valuation.
Wolfe Upgrades Spotify to Outperform
Wolfe upgraded Spotify from peer performance to outperform believing there is sustainable upside for the music streaming platform. The firm said the potential for sustained growth to Street OI estimates ahead would be a key catalyst for shares.
BMO Upgrades Adobe to Outperform
BMO has a bullish outlook for Adobe on the company's venture into AI, upgrading its rating from market perform to outperform. BMO surveyed to believe that ADBE can capture price/mix, as well as new users, through generative AI.
Citi Initiates Everest as Buy
Citi initiated coverage of Everest, an insurance company that is capitalizing on the most favorable reinsurance underwriting environment in decades. Citi's note stated that the primary business of Everest is well-positioned for faster growth given leverage to attractive specialty lines and international expansion.
BofA Reiterates FedEx as Buy
Bank of America reiterated its buy rating for FedEx following the company's earnings report on Tuesday, showing early progress in a structural transformation that saw Ground volumes declining yet margins improving. It was the first time in the company's history that it managed such an improvement.
Goldman Sachs Reiterates Nike as Buy
Goldman Sachs reiterated its buy rating for Nike ahead of Nike's earnings next week. The firm believes a key debate amongst investors would center around Nike's wholesale channel strategy and growth outlook.
TD Cowen Names Ralph Lauren a Best Idea
TD Cowen has a bullish outlook for Ralph Lauren, calling it a best idea. The firm's channel work suggests that consensus estimates are underestimating management's ability to execute toward a mid-teens EBIT margin target.
TD Cowen Names Tapestry a Best Idea
TD Cowen sees Tapestry's stronger direct-to-consumer channel driving higher service, more pricing control, and higher margins. The firm calls it an underappreciated stock, naming it a best idea.
TD Cowen Names IAC a Best Idea
Cowen believes media company IAC, a best Smidcap idea for 2023, is undervalued. The firm explains that IAC's portfolio segments trade at a significant conglomerate discount.
Jefferies Reiterates Amazon as Buy
Jefferies raised its price target on Amazon from $135 to $150 per share, stating that Amazon shares have more room to run. The firm cited the company's improving profitability, an AWS recovery in sight, and the perception of long-term AI tailwinds as the drivers of outperformance.
Loop Upgrades OneSpaWorld to Buy
Loop upgraded OneSpaWorld from hold to buy, stating that shares are attractive of the spa company that services cruise ships. The firm noted that OneSpaWorld has contracts that give it exclusive rights to serve as the sole health and wellness services provider for nearly all major U.S. cruise lines.
Oppenheimer Reiterates Uber as Outperform
Oppenheimer expressed increased confidence in Uber's consumer tailwinds, reiterating its outperform rating and increasing its target from $55 to $65 per share.
Citi Opens a Positive Catalyst Watch on Molson Coors
Citi said Molson Coors is a beneficiary of the Bud Light controversy, leading to upside in top- and bottom-line estimates and raised 2023 guidance throughout the summer.
JPMorgan Initiates Tyler Technologies as Overweight
JPMorgan initiated coverage of software company Tyler Technologies, calling it a market leader. The firm explains that many governments are running outdated systems which are overdue to modernize, creating a strong secular tailwind.
Goldman Sachs Reiterates Micron as Buy
Goldman Sachs continues to stand by its buy rating on Micron, stating that its views on the overall Memory cycle predicated on demand stabilization and disciplined supply-side actions on the part of all participants remain unchanged.
Bernstein Reiterates Oracle as Outperform
Bernstein believes that Oracle is a “mini-Microsoft” with three key pillars: the early days of an ERP cloud migration, OCI Gen 2, and the Windows and Server & Tools Cash machine.
Needham Reiterates Disney as Hold
Needham has a hold rating for Disney, citing negative sentiment building around the stock as the tone of incoming calls has shifted distinctly negative, and sentiment has further deteriorated since CFO Christine McCarthy left last week.
Barclays Reiterates Carnival as Overweight
Barclays called Carnival a self-help story, remaining on a Positive Earnings Revision Cycle and its self-help potential.
Needham Reiterates Snowflake as Buy
Needham raised its price target on Snowflake to $216 per share from $180, stating there is potential for the company to increase the size of its TAM from $248 billion by unlocking new use-cases from generative AI.
Deutsche Bank Reiterates Shopify as Buy
Deutsche Bank sees meaningful upside ahead for Shopify shares, citing a better understanding of the near-term profitability potential along with longer-term earnings power.
Citi Names Workiva a Top Pick
Citi's new top pick is Workiva, a software-as-a-service company with continued upside from ESG and potentially capital markets and a shift in valuation towards EV/FCF (enterprise value/free-cash flow) going into '25.
Morgan Stanley Reiterates Dell as Overweight
Morgan Stanley has greater conviction in its overweight thesis for Dell shares following meetings with incoming CFO Yvonne McGill and Director of IR Hall Butler.
Morgan Stanley Reiterates Apple as Overweight
Morgan Stanley has a bullish outlook for Apple, viewing Apple TV+ and Apple's further investments in sports streaming as a way to increase installed base loyalty and acquire new users, both of which are opportunities to further monetize the Apple user longer-term.
As a new business, it's important to understand the impact that financial analysts' calls can have on the market. It's clear from Wednesday's biggest calls on Wall Street that companies can be subject to drastic changes in stock performance based on such ratings. For instance, a downgrade from overweight to equal weight can generate a sell-off, while a coveted upgrade to outperform can drive buying activity. It's also evident that analysts focus on different aspects of a business when making their calls. Some may focus on a company's venture into AI, while others may look at its potential for sustained growth or channel strategy. It's therefore important for new businesses to understand the areas that analysts may focus on when evaluating their company. A focus on these areas may potentially lead to an overall positive trend in stock performance, which can benefit a company's growth and profitability. Ultimately, it is vital for new businesses to stay up to date with the latest market trends and ratings, so they can adjust their strategies accordingly and remain competitive.
