AMD upgrade, SAP downgrade and Bath & Body Works 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:
Northland analyst Gus Richard upgraded AMD (AMD) to Outperform from Market Perform with a price target of $95, down from $97. While he is reducing his estimates for PC CPUs, GPUs, Xilinx and gaming consoles to account for a global recession, cutting $2.8B out of his calendar 2023 forecast, he notes that AMD shares have already seen "significant" multiple compression.
Jefferies analyst Jonathan Petersen upgraded Equinix (EQIX) to Buy from Hold with a price target of $790, up from $750, citing pricing power and resilience in a recession. The analyst and his REITs team also upgraded Digital Realty (DLR), Crown Castle (CCI) and Ventas (VTR) to Buy from Hold.
Bank of America analyst Steve Byrne upgraded Bunge (BG) to Buy from Neutral with a price target of $135, down from $140. Shares of grain processors Archer Daniels Midland (ADM) and Bunge are down 22% and 29%, respectively, from their April highs, but he sees little risk to the ag cycle.
William Blair analyst Matthew Pfau upgraded ShotSpotter (SSTI) to Outperform from Market Perform without a price target. Since the downgrade to Market Perform in August of 2019, the business has increased revenue by 66% while the stock is down 24%, Pfau noted.
Credit Suisse analyst Andrew Kuske upgraded Brookfield Infrastructure Partners (BIP) to Outperform from Neutral with an unchanged price target of $49.50. Brookfield Infrastructure Partners is positioned to benefit from "rather positive potential across a variety of activities," including an "abundance" of prospective deployment opportunities, positive fundraising activities across the Brookfield Asset Management franchise and a selection of capital recycling opportunities, Kuske told investors in a research note.
Top 5 Downgrades:
Exane BNP Paribas analyst Stefan Slowinski downgraded SAP (SAP) to Neutral from Outperform with a $105 price target. The analyst sees near-term risks on the demand side as software spending decisions "come under increased scrutiny."
Wedbush analyst Peter Winter downgraded KeyCorp (KEY) to Neutral from Outperform with a price target of $20, down from $26. The analyst sees increased risks of recession as the Federal Reserve on track to aggressively raise rates to combat inflation pressures. The analyst also downgraded Huntington Bancshares (HBAN) to Neutral from Outperform.
Wedbush analyst David Chiaverini downgraded SVB Financial (SIVB) to Neutral from Outperform with an unchanged price target of $450. The analyst sees slowing growth in a recessionary environment and believes SVB's end-markets could be disproportionately impacted, including venture capital-backed backed companies in the high-tech and biotech industries. The analyst also downgraded Axos Financial (AX), Western Alliance (WAL), Webster Financial (WBS) and East West Bancorp (EWBC) to Neutral from Outperform.
Jefferies analyst Linda Tsai downgraded Simon Property (SPG) to Hold from Buy with a price target of $100, down from $160, citing weaker pricing power, longer duration leases, and/or structural headwinds. The analyst and her REITs team also downgraded Acadia Realty Trust (AKR), Kite Realty Group (KRG), RPT Realty (RPT) to Hold from Buy, and Brixmor (BRX) to Underperform from Hold.
UBS analyst Ross Fowler downgraded Duke Energy (DUK) to Neutral from Buy with a price target of $112, down from $122 as part of a broader research note on North American Power and Utilities. The analyst also downgraded Ameren (AEE), Evergy (EVRG) to Neutral from Buy, and Fortis (FTS) to Sell from Neutral.
Top 5 Coverage Initiations:
Piper Sandler analyst Korinne Wolfmeyer initiated coverage of Bath & Body Works (BBWI) with an Overweight rating and $58 price target. The company has a "repeat business model" in a category that's proved to be strong during and following the pandemic, Wolfmeyer told investors in a research note.
KeyBanc analyst Tyler Parker initiated coverage of Unity Software (U) with a Sector Weight rating. The analyst sees higher relative risk to estimates at a premium valuation as Operate recovers from operational issues and the company cuts costs to achieve non-GAAP profitability.
KeyBanc analyst Tyler Parker initiated coverage of AppLovin (APP) with an Overweight rating and $55 price target. As the most scaled solution, with increasing capabilities, the analyst sees opportunity for AppLovin to sustain healthy growth and expand margins at a depressed multiple. The analyst also started coverage of ironSource (IS) with an Overweight rating and a price target of $3.50.
Roth Capital analyst Sean McGowan initiated coverage of MGP Ingredients (MGPI) with a Buy rating and $115 price target. The diversified producer of distilled spirits and other alcohol and food products has grown sales and EBITDA rapidly in recent years, and the analyst expects strong growth to continue.
Piper Sandler analyst Korinne Wolfmeyer initiated coverage of Coty (COTY) with a Neutral rating and $8 price target. The company's "heavy exposure" to prestige fragrance, which represents over 50% of sales, could create tough upcoming comps, and its less exposure to key areas like China and travel retail versus peers could share limit upside from "recovery tailwinds," Wolfmeyer contended.