Crowdstrike upgrade, McDonald's downgrade and Shift4 Payments initiation among today's top calls on Wall Street
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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:
BTIG analyst Gray Powell upgraded Crowdstrike (CRWD) to Buy from Neutral with a $257 price target. The company reported stronger than expected fourth quarter results and initial fiscal 2023 growth outlook, the analyst noted.
Wells Fargo analyst Aaron Rakers upgraded Arista Networks (ANET) to Overweight from Equal Weight with a price target of $160, up from $142. The analyst believes Arista remains well positioned for a strong 400G hyperscale cloud upgrade cycle.
Barclays analyst Tim Long upgraded NetApp (NTAP) to Overweight from Equal Weight with a price target of $102, up from $85, as he believes the company's recurring revenue is "underrated."
Argus analyst John Staskak upgraded Hormel Foods (HRL) to Buy from Hold with a $57 price target. Though Hormel still faces challenges from rising costs and supply-chain disruptions, the analyst expects it to offset inflationary pressures through price hikes and better efficiency, while the company should also benefit from continued strong demand for its products.
JPMorgan analyst Michael Rehaut upgraded KB Home (KBH) to Overweight from Neutral with a price target of $51, down from $64. The analyst views the stock's relative valuation attractive relative to his outlook for above-average gross margins and return on equity in fiscal 2022 and 2023.
Top 5 Downgrades:
Northcoast analyst Jim Sanderson downgraded McDonald's (MCD) to Neutral from Buy and removed his previous $297 price target, arguing that the company's closing of operations in Russia and Ukraine will create headwinds to earnings that "could continue for years."
Wells Fargo analyst Aaron Rakers downgraded Cisco (CSCO) to Equal Weight from Overweight with a price target of $65, down from $70. The analyst thinks shares could remain more range bound given an expectation that shares could see limited multiple expansion from current levels as investors focus on peaking backlog/product order growth dynamics, Cisco's subscription model transformation that is a well-known/modeled consideration, and increasing competition in core enterprise campus switching.
JPMorgan analyst Mark Murphy downgraded Asana (ASAN) to Underweight from Neutral with a price target of $32, down from $66. The combination of slower sales growth with degrading margins "may prompt increasing questions about pull-forward," efficiency of the company's spend, and competitive pressures, while investors are pivoting "toward some semblance of reasonable" near-term free cash flow multiples, Murphy told investors in a research note.
Goldman Sachs analyst Matthew Sykes downgraded Mettler-Toledo (MTD) to Sell from Neutral with a $1,240 price target, representing 10% downside. Given the company's industrial exposure and growth mix skewed toward price, the analyst has concerns over headwinds it may face this year.
JPMorgan analyst Michael Rehaut downgraded Meritage Homes (MTH) to Neutral from Overweight with a price target of $111, down from $148. The analyst believes the stock's relative valuation reasonably reflects his outlook for above average order growth and margins in 2022 as well as only modestly above average return on equity.
Top 5 Coverage Initiations:
DA Davidson analyst Christopher Brendler initiated coverage of Shift4 Payments (FOUR) with a Buy rating and $70 price target. The analyst contended that the shift in market sentiment amid the Fed and geopolitical uncertainty has created "rare buying opportunities" in "compelling" growth stories.
JPMorgan analyst Eric Joseph initiated coverage of Kymera Therapeutics (KYMR) with a Neutral rating and $44 price target. While the company is "relatively insulated from downside pressure versus the benchmark from a healthy balance sheet," it has limited upside potential from anticipated biomarker updates from KT-474 and the earlier stage pipeline over the mid-term, Joseph told investors in a research note.
H.C. Wainwright analyst Emanuela Branchetti initiated coverage of Esperion Therapeutics (ESPR) with a Buy rating and $22 price target. The analyst believes the company's corporate reset is set to improve its lead assets' commercial performance ahead of key inflection point in the first quarter of 2023.
JPMorgan analyst Eric Joseph initiated coverage of C4 Therapeutics (CCCC) with an Overweight rating and $43 price target. The analyst has a "generally bullish outlook on the differentiated therapeutic potential" of targeted protein degraders and views C4 as a "compelling and underappreciated name" within the broader space.
Brookline analyst Kemp Dolliver initiated coverage of Verrica Pharmaceuticals (VRCA) with a Buy rating and $20 price target. The company's lead product candidate YCANTH, a drug/device combination product for the treatment of molluscum contagiosum, has am FDA action date of May 24 and is on track to be the first FDA-approved treatment for the indication, Dolliver contended.