JPMorgan upgrade, Carvana downgrade and Nvidia resumption 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:
Oppenheimer analyst Chris Kotowski upgraded JPMorgan (JPM) to Outperform from Perform with a $167 price target. Loan growth and rising interest rates are good for the banks, and even if the economy were to enter recession, the banking industry "would handle it better than any recession in history," Kotowski told investors in a research note. The analyst also upgraded Morgan Stanley (MS) and SVB Financial (SIVB) to Outperform with price targets of $111 and $702, respectively.
JPMorgan analyst Michael Rehaut upgraded Mohawk Industries (MHK) to Neutral from Underweight with a price target of $156, up from $127, post first quarter results. The analyst sees "solidly better than expected" pricing execution, a stronger than expected demand backdrop in Europe and, as a result, a "significantly stronger" earnings outlook.
Morgan Stanley analyst Matthew Harrison upgraded Argenx (ARGX) to Overweight from Equal Weight with a price target of $375, up from $278, telling investors that he views the current valuation as a good entry point into what he identifies as a "strong mid-cap with outsized growth potential."
Wells Fargo analyst Elyse Greenspan upgraded Marsh McLennan (MMC) to Overweight from Equal Weight with a price target of $183, up from $164. The analyst believes Marsh McLennan is one of the brokers positioned to see strong organic revenue growth as we go through 2022 and 2023.
Morgan Stanley analyst Matthew Harrison upgraded Vertex Pharmaceuticals (VRTX) to Equal Weight from Underweight with a price target of $250, up from $222. The risk/reward for Vertex is "skewed more favorably" post AbbVie's (ABBV) failure with its ABBV-119 triplet program in cystic fibrosis, said Harrison, who thinks the company's long-term cash flow profile likely to maintain premium valuation in the current market environment.
Top 5 Downgrades:
Wells Fargo analyst Zachary Fadem downgraded Carvana (CVNA) to Equal Weight from Overweight with a price target of $65, down from $150. The analyst cited last week's financing terms to fund the ADESA acquisition, which he believes were unfavorable, and inevitably delay the path to positive free cash flow to fiscal 2024 at best. Fadem also downgraded Shift Technologies (SFT) to Equal Weight from Overweight with a price target of $2, down from $6.
Wedbush analyst Daniel Ives downgraded DocuSign (DOCU) to Underperform from Neutral with a price target of $60, down from $80. The analyst believes the work from home beneficiary could see difficult growth ahead not factored into shares at current prices. Ives also downgraded C3.ai (AI) and Matterport (MTTR) to Neutral from Outperform.
Bank of America analyst Jessica Reif Ehrlich downgraded Charter (CHTR) to Neutral from Buy with a price target of $500, down from $740. She is reducing her multiple on growth concerns due to ramping competition from fixed wireless access deployments and accelerating fiber builds and the fact that the U.S. broadband market has matured significantly, making overall industry growth more limited moving forward.
Atlantic Equities analyst Edward Lewis downgraded Colgate-Palmolive (CL) to Neutral from Overweight with a price target of $80, down from $92. Colgate raised its forecast for fiscal 2022 organic sales growth but this was overshadowed by the move on adjusted earnings, with the company now expecting a mid-single-digit decline against a prior low mid-single-digit increase, Lewis contended.
Piper Sandler analyst Michael Lavery downgraded Kellogg (K) to Underweight from Neutral with a price target of $62, down from $66. Piper's consumer survey points to risks to meat and cereal from rising inflation, Lavery told investors in a research note. The analyst also downgraded Tyson Foods (TSN) to Underweight from Neutral with a price target of $81, down from $87.
Top 5 Coverage Initiations:
Morgan Stanley analyst Joseph Moore resumed coverage of Nvidia (NVDA) with an Equal Weight rating and $217 price target. While Nvidia remains one of the best growth names in the semiconductor space, the analyst is concerned about deceleration in gaming and the stock's high valuation versus peers.
Bank of America analyst Adam Ron initiated coverage of Cano Health (CANO) with a Buy rating and $8 price target, calling it a "growth stock trading at value-based levels." Timing the entry point into volatile growth stocks is "difficult," but he expects the company to post EBITDA of about $150M this year, which he sees "proving out the economics of the model" and putting free cash flow breakeven status "within reach."
Bank of America analyst Adam Ron initiated coverage of Privia Health (PRVA) with a Buy rating and $27 price target. The analyst is positive on the company's high-growth and free cash flow positive profile.
Univest Securities analyst James Jang initiated coverage of Yield10 Bioscience (YTEN) with a Buy rating and $5 price target. The company's yield enhancing seed programs for canola, camelina and soybeans could all be licensed to larger firms while its PHA bioplastics program could help replace or complement the current plastics market with an "eco-friendlier," biodegradable bioplastic, Jang told investors.
JPMorgan analyst Joseph Greff reinstated coverage of MGM Resorts (MGM) with an Overweight rating and $53 price target following a period of restriction. The analyst likes the 15% pullback to the low $40s share price levels to play for a continued recovery in Las Vegas, where he says hotel pricing remains strong.