Peloton upgrade, Netflix downgrades and Zscaler coverage initiation among today's top calls on Wall Street
Institutional investors and professional traders rely on The Fly to learn which companies the best analysts on Wall Street are saying to buy and sell.
Research analysts at Wall Street's largest banks issue recommendations on whether a stock should be bought, held, or sold. The Fly's team of financial market experts scours hundreds of research notes daily to uncover the best trading ideas. Check out today's top analyst calls from around Wall Street, compiled by The Fly.
Top 5 Upgrades:
Stifel analyst Scott Devitt upgraded Peloton Interactive (PTON) to Buy from Hold with a price target of $40, down from $56. CEO John Foley last night denied claims that the company would halt production, while acknowledging that it is taking action to improve costs and right size production, Devitt told investors.
Credit Suisse analyst Phil Winslow upgraded Cloudflare (NET) to Outperform from Neutral with a price target of $140, down from $205. Winslow expects Cloudflare to sustain significant revenue growth, within the high 40% to +50% range, for multiple years due to its differentiated serverless architecture, efficient and rapidly expanding global network, cloud-native approach for integrated network, application, and Zero Trust services, and emerging opportunity and strong positioning in edge computing, the analyst told investors.
Benchmark analyst Matthew Harrigan upgraded Netflix (NFLX) to Hold from Sell without a price target following yesterday's 20% selloff in after-hours trading following the company's "weak" Q1 member growth guidance. He is vacating his former $470 price target, though he now estimates fair value at a slightly lower $450, Harrigan said.
BofA analyst Geoff Meacham upgraded Moderna (MRNA) to Neutral from Underperform with a price target of $180, up from $135. The stock's 65% decline over the past four months has compressed valuation "back to earth", and moving from pandemic to endemic stages, he is more focused on the company's pipeline beyond Spikevax, the analyst told investors in a research note.
Citi analyst Paul Lejuez upgraded Under Armour (UAA) to Buy from Neutral with an unchanged price target of $29. Under Armour is emerging from the pandemic in a "much stronger position" in North America with "clean" inventory, distribution rationalized and a product assortment that is in "good shape," Lejuez said.
Top 5 Downgrades:
KeyBanc analyst Justin Patterson downgraded Netflix to Sector Weight from Overweight without a price target following last night's results. Netflix now screens as a "low-double-digit grower" and investors will focus on the degree that paid net adds need to accelerate in the second half of the year to surpass 20M, Patterson told investors in a research note. Analysts at Macquarie, Evercore ISI, Baird, Credit Suisse, Barclays, Monness Crespi, Truist and Morgan Stanley also downgraded Netflix.
RBC Capital analyst Ashish Sabadra downgraded Ecolab (ECL) to Sector Perform from Outperform with a price target of $225, down from $245. The company pre-announced its Q4 earnings below consensus due to COVID-19 and supply chain disruption, though its solid market position, technology leadership, recovery post-omicron, and a pricing increase of 4% exiting 2021 should help accelerate revenue growth, the analyst told investors in a research note.
BofA analyst Geoff Meacham downgraded CureVac (CVAC) to Underperform from Neutral with a price target of $20, down from $55. The stock faces a tough setup in 2022 given the minimal upside from its COVID-19 vaccine and a fairly limited catalyst flow from the rest of the pipeline this year, the analyst said.
JPMorgan analyst Zach Parham downgraded Callon Petroleum (CPE) to Underweight from Neutral with a $62 price target. Callon's free cash flow will be used to reduce debt, as the company maintains one of the highest leverage profiles in the group despite reducing net debt by $500 between Q2 of 2020 and Q3 of 2021, Parham told investors.
JPMorgan analyst Jeffrey Zekauskas downgraded H.B. Fuller (FUL) to Neutral from Overweight with a price target of $73, down from $75. The analyst cited valuation for the downgrade.
Top 5 Coverage Initiations:
Stifel analyst Adam Borg initiated coverage of Zscaler (ZS) with a Buy rating and $335 price target. Zscaler has "significantly broadened" its platform with secure web gateway roots that provide secure access to the internet and software-as-a-service apps, Borg told investors.
BTIG analyst Matt VanVliet initiated coverage of Twilio (TWLO) with a Buy rating and $260 price target. The company is the clear market leader in the nearly $80B CPaaS market that is growing in excess of 20% annually, the analyst contended.
UBS analyst Eliana Merle initiated coverage of Moderna with a Neutral rating and $221 price target. Looking at the company pipeline beyond COVID-19, mRNA is seen as a disruptive force in the $35B global annual vaccine market, the analyst said.
Wolfe Research analyst Mike Zaremski initiated coverage of Brighthouse Financial (BHF) with an Outperform rating and $79 price target as he launched coverage on 11 life insurance companies. Even after the sector's recent outperformance, life stocks are embedding "excessive" fears over "lower-for-longer" interest rate scenarios, Zaremski told investors.
Macquarie analyst Garrett Hinds initiated coverage of VMware (VMW) with an Outperform rating and $157 price target. He sees the company being well-positioned to re-accelerate its revenue growth and benefit from the growth of 5G networks,