Dish upgrade, American Eagle downgrade and Verizon 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:
Truist analyst Greg Miller upgraded Dish (DISH) to Buy from Hold with a price target of $60, up from $25. The stock is beginning to rebound after its Investor Day presentation as investors digest the lack of detail associated with the likely $20B build plan, the analyst told investors in a research note.
Baird analyst Peter Arment upgraded Mercury Systems (MRCY) to Outperform from Neutral with a price target of $72, up from $56. With visibility set to improve, the analyst expects much better results in the coming quarters, coupled with an improving sentiment for defense.
Bernstein analyst Venugopal Garre upgraded Grab Holdings (GRAB) to Outperform from Market Perform with a $3.04 price target. Despite the "gloomy backdrop," the analyst sees an attractive risk/reward at current share levels.
Evercore ISI analyst Stephen Richardson upgraded Linde (LIN) to Outperform from In Line with an unchanged price target of $355 as he believes the company has one of the most stable businesses in the global chemicals sector. Meanwhile, Credit Suisse analyst John Roberts initiated coverage of the stock with an Outperform rating and a price target of $380.
Wells Fargo analyst Derek Archila upgraded Nurix Therapeutics (NRIX) to Overweight from Equal Weight with a $25 price target after the company's R&D day when he got a positive, albeit modest update for its NX-2127 program.
Top 5 Downgrades:
Morgan Stanley analyst Kimberly Greenberger downgraded American Eagle (AEO) to Underweight from Equal Weight with a price target of $8, down from $22. The company cut its 2022 guidance "significantly as its optimism proved excessive," said the analyst, who sees room for further material downside as the second half of 2022 guide "appears unachievable."
Argus analyst Kevin Heal downgraded Rocket Companies (RKT) to Hold from Buy. The analyst cited "significantly higher" mortgage rates as 30-year fixed rate moved above 5% and is expected to remain elevated in light of the well-publicized accelerated rate hikes by the Federal Reserve, adding that the company's origination volumes are expected to drop 50% from 2021 levels.
Piper Sandler analyst James Fish downgraded NetScout (NTCT) to Underweight from Neutral with a price target of $33, down from $35. The shares are trading at a "peak multiple" while the company faces product growth risks from supply chain issues and the pull-in of orders, Fish told investors in a research note.
Goldman Sachs analyst Emily Chieng downgraded Steel Dynamics (STLD) to Neutral from Buy with a price target of $92, down from $114, following the stock's outperformance relative to the group and to reflect modest caution around the non-residential construction demand outlook.
Wells Fargo analyst Ned Baramov downgraded Sunoco LP (SUN) to Underweight from Equal Weight with a price target of $41, down from $46. While the demand elasticity threshold of $4.50 is not exact, and fuel distribution volumes/margins could in theory continue unabated even at higher gasoline prices, the analyst believes the risk-reward is unfavorably skewed at current levels. His colleague Michael Blum also downgraded Cheniere Energy Partners (CQP) to Underweight from Equal Weight with a $55 price target, citing valuation.
Top 5 Coverage Initiations:
LightShed Partners analyst Walter Piecyk initiated coverage of Verizon (VZ) with a Neutral rating. Given the growth outlook for Verizon and the industry he believes the stock is currently fairly valued at $52.50 per share.
Jefferies analyst Zachary Weiner initiated coverage of Bausch + Lomb (BLCO) with a Buy rating and $25 price target. Noting that his survey work supports share gains within the high margin daily SiHy contact lens category, the analyst told investors he expects share gains to be augmented by product launches and geographic expansion. Bank of America, Wells Fargo and Guggenheim also started coverage of the stock with Buy, while Deutsche Bank, Morgan Stanley, Goldman Sacks and JPMorgan initiated Bausch + Lomb with Neutral-equivalent ratings.
Credit Suisse analyst John Roberts initiated coverage of Sherwin-Williams (SHW) with an Underperform rating and $245 price target. A rising interest rate environment could negatively impact residential and commercial paint demand, Roberts told investors in a research note. The analyst also started coverage of PPG Industries (PPG) and FMC Corporation (FMC) with Underperform ratings and price targets of $115 and $109, respectively.
Credit Suisse analyst John Roberts initiated coverage of Eastman Chemical (EMN) with an Outperform rating and $130 price target. The analyst believes Eastman has among the largest potential to re-rate in the sector as its valuation "has yet to reflect these trends."
Wedbush analyst Laura Chico initiated coverage of PepGen (PEPG) with an Outperform rating and $17 price target. While its early days for PepGen's lead asset PGN-EDO51, which is in a Phase 1 healthy volunteer study, the analyst does see external validation for the strategy/approach from Sarepta Therapeutics' (SRPT) efforts with Exondys51 and SRP-5051. Stifel, SVB Leering and Bank of America also started coverage of PepGen with Buy-equivalent ratings.