Netflix upgrade, Twilio downgrade and Petco initiations 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:
Wedbush analyst Michael Pachter upgraded Netflix (NFLX) to Outperform from Neutral with a $280 price target as he finds shares to be a compelling investment. The analyst thinks Netflix is positioned to exceed its guidance for the second quarter, particularly because of the staggered release date for Ozark.
JPMorgan analyst Alex Yao double-upgraded Alibaba (BABA) to Overweight from Underweight with a price target of $130, up from $75. The "significant uncertainties" facing the China internet sector are beginning to abate on the back of recent regulatory announcements, Chang told investors in a research note. The analyst also double-upgraded Pinduoduo (PDD), Tencent (TCEHY) and NetEase (NTES) to Overweight from Underweight, and upgraded JD.com (JD), Baidu (BIDU) Bilibili (BILI) to Neutral from Underweight.
Bank of America analyst Ming Hsun Lee upgraded Nio (NIO) to Buy from Neutral with a price target of $26, up from $25. The analyst cited improving sales and better margins expected in the second half as well as an attractive valuation given the view that one-year return of down 60% has "likely priced in all negatives."
JPMorgan analyst Lisa Gill upgraded Cigna (CI) to Overweight from Neutral with a price target of $304, up from $248. There is a "lot to like" coming out of the company's first quarter results, Gill told investors in a research note.
Stifel analyst Mark Kelley upgraded Trade Desk (TTD) to Buy from Hold with a price target of $80, up from $50. The analyst believes connected TV ads will gain even more momentum with Netflix and Disney+ (DIS).
Top 5 Downgrades:
Baird analyst William Power downgraded Twilio (TWLO) to Neutral from Outperform with a price target of $120, down from $155. The analyst says that in this "risk-off environment," he's shifting his software focus to companies with "global platforms, competitive moats and strong free cash flow and balance sheets." Power also downgraded RingCentral (RNG) and Bandwidth (BAND) to Neutral from Outperform.
Benchmark analyst Michael Ward downgraded Shift Technologies (SFT) to Hold from Buy with no price target to reflect the higher cost of financing.
BMO Capital analyst Daniel Salmon downgraded Nielsen (NLSN) to Market Perform from Outperform with a price target of $28, down from $34. The company's go-shop period expired last week, which removes any "white knight" scenario, Salmon told investors in a research note.
Goldman Sachs analyst Neil Mehta downgraded Marathon Petroleum (MPC) to Neutral from Buy with a price target of $102, up from $90. The analyst cited valuation following the stock's outperformance of 114% versus U.S. c-corporation refining peers over the last two years.
Roth Capital analyst Scott Henry downgraded InMed Pharmaceuticals (INM) to Neutral from Buy with a price target of 80c, down from $6. While "intrigued" by the commercial business, the analyst has concerns about the viability of the R&D unit in the current market environment and has adopted conservative valuation metrics given concerns with the ability to finance and the potential for a recapitalization.
Top 5 Coverage Initiations:
Morgan Stanley analyst Simeon Gutman initiated coverage of Petco (WOOF) with an Equal Weight rating and $21 price target. The analyst is constructive on the company's business given its internal initiatives and an "upside lever" in vet hospitals, but sees softer demand for hardlines and says supplies could pressure Petco's sales and margins.
Morgan Stanley analyst Simeon Gutman initiated coverage of RH (RH) with an Equal Weight rating and $400 price target. While the analyst views RH as a "transcendent brand with the most long-term upside potential" in his coverage, a 12-month view gives him "pause" with a "category reversion and potential recession" looming.
H.C. Wainwright analyst Emily Bodnar initiated coverage of Novocure (NVCR) with a Buy rating and $115 price target. The analyst sees a "solid base business with multiple shots on goal for indication expansion."
Northland analyst Michael Latimore initiated coverage of SVF Investment Corp. 3 (SVFC) - which has previously announced a proposed business combination with Symbiotic - with an Outperform rating and $16 price target. Symbotic is "creating the AI-powered warehouse automation category," said Latimore, who points to a large deal with Walmart (WMT) and $5.2B in noncancellable backlog as "evidence of its lead." Following the consummation of the business combination, the post business combination company, to be named Symbotic Inc., will begin trading on Nasdaq under the ticker "SYM."
Jefferies analyst David Katz reinstated coverage of DraftKings (DKNG) with a Buy rating and $33 price target. Katz believes that the current risk/reward for DraftKings shares is "highly favorable."