Public Storage upgrade, Under Armour downgrade and Euroseas 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:
BMO Capital analyst Juan Sanabria upgraded Public Storage (PSA) to Outperform from Market Perform with a price target of $370, down from $410. The analyst is positive on the company's "fortress" balance sheet and views storage as "defensive" amid macro uncertainty.
Morgan Stanley analyst Nigel Dally upgraded Reinsurance Group (RGA) to Equal Weight from Underweight with a price target of $132, up from $126. The analyst cited a more rapid normalization of returns from pandemic-related pressure, coupled with a valuation multiple on normalized earnings that "no longer looks excessive."
Keefe Bruyette analyst Edward Firth upgraded Barclays (BCS) to Outperform from Market Perform with a price target of 230 GBp, up from 210 GBp. The analyst argued that the bank is performing well, reasons for caution are already priced into the shares, and the stock buyback is restarting in early June.
KGI Securities analyst Jackson Chiang upgraded Cisco Systems (CSCO) to Outperform from Neutral with a $56 price target.
Jefferies analyst Owen Bennett upgraded Swedish Match (SWMAY) to Hold from Underperform with a price target of SEK 106, up from SEK 54, matching Philip Morris' (PM) current offer price. While his near-term caution on the underlying business persists, he doesn't see any of these affecting Philip Morris' bid and believes that if there is a counterbid the price could "rise materially."
Top 5 Downgrades:
Morgan Stanley analyst Kimberly Greenberger downgraded Under Armour (UAA; UA) to Equal Weight from Overweight with a price target of $11, down from $14. The departure of Under Armour's CEO lowers confidence in the company's turnaround, Greenberger told investors in a research note.
DA Davidson analyst Brandon Rolle downgraded Thor Industries (THO) to Underperform from Neutral with a price target of $60, down from $78. The analyst stated that while his fresh round of RV industry checks suggests continued weakness at retail through mid-May, his visit to the Elkhart, Indiana production facilities also sparked questions whether OEMs are "producing with greater discipline" compared to 2018-2019 period.
BMO Capital analyst Juan Sanabria downgraded Life Storage (LSI) to Market Perform from Outperform with a price target of $130, down from $150. The analyst remains positive on Life Storage's "strong management and improved portfolio," but sees potential risks around its business exposure in the event of a downturn, including around its "nascent" Lightspeed business given less robust e-commerce sales.
Citi analyst Christian Wetherbee downgraded Norfolk Southern (NSC), Union Pacific (UNP) and CSX (CSX) to Neutral from Buy with price targets of $260, $235 and $35, respectively. The analyst sees near-term risk in a decelerating freight and economic environment and notes that rail valuations have actually improved relative to the market while earnings growth expectations are at their highest.
Bank of America analyst Joshua Dennerlein downgraded Physicians Realty Trust (DOC) to Underperform from Neutral with an unchanged price target of $18. His model assumes lower growth going forward given rising interest rates, which are a headwind given that the majority of Physicians Realty's earnings growth is driven by net acquisitions.
Top 5 Coverage Initiations:
Univest Securities analyst James Jang initiated coverage of Euroseas (ESEA) with a Buy rating and $50 price target. The analyst notes that Euroseas' 95% of charter coverage days fixed through 2022 at "attractive rates" gives it high visibility into earnings and says he expects the company to announce a quarterly cash dividend during its first quarter earnings announcement coming up on May 23.
Morgan Stanley analyst Angel Castillo initiated coverage of Ardagh Metal Beverage (AMBP) with an Equal Weight rating and $7.20 price target. The analyst believes the shares are appropriately pricing in Ardagh's growth and discounting its risks of high Europe exposure and capital structure overhangs.
China Renaissance analyst Cindy Wang assumed coverage of Futu Holdings (FUTU) with a Buy rating and price target of $51.80, down from $198. The analyst is positive on Futu's new paying customer acquisition on overseas expansion, which she says will drive total client assets.
China Renaissance analyst Yi Sin Ngoh assumed coverage of Sea Limited (SE) with a Buy rating and $118 price target. While Garena's bookings and profitability could worsen further in the second quarter, Gaming downside is priced in.
H.C. Wainwright analyst Vernon Bernardino assumed coverage of TFF Pharmaceuticals (TFFP) with a Buy rating and $22 price target. The analyst notes that TFF's technology provides superior pulmonary drug delivery, and believes VORI has potential to enhance voriconazole's efficacy while reducing harmful side effects.