Rocket Companies upgrade, Coinbase downgrade and Abbott 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:
Wells Fargo analyst Donald Fandetti upgraded Rocket Companies (RKT) to Overweight from Equal Weight with a price target of $10, up from $6.50. While the residential mortgage market remains extremely challenging, the analyst sees Rocket as a beneficiary of the dislocation, and interest rate expectations seem to have less upside tail risk.
Bank of America analyst Victor Cheng upgraded Sabre (SABR) to Buy from Underperform with an unchanged price target of $10. The stock down 44% in the last three months, but fundamentals are intact, said Cheng, who thinks that "plenty of bad news is now priced in."
Evercore ISI analyst Liisa Bayko upgraded Enanta (ENTA) to Outperform from In Line with a $62 price target, telling investors that she believes the Phase 1 first-in-human data for its COVID anti-viral data due in July will show that its once-daily COVID protease inhibitor, EDP-235, doesn't require ritonavir to reach exposures needed for a strong anti-viral effect like Pfizer's (PFE) Paxlovid does.
Bank of America analyst Heather Balsky upgraded Dun & Bradstreet (DNB) to Neutral from Underperform with a price target of $17, up from $16. Balsky sees signs of momentum and thinks management can achieve its 2022 plan, which should help rebuild investor support.
Credit Suisse analyst Andrew Kuske upgraded Mercer (MERC) to Outperform from Neutral with a price target of $19, up from $18.50. The analyst believes Mercer faces many positives that range from commodity prices, generally favorable FX rates along with a rather attractive valuation.
Top 5 Downgrades:
Atlantic Equities analyst Simon Clinch downgraded Coinbase (COIN) to Neutral from Overweight with a price target of $54, down from $95, citing incremental concerns for the company and the cryptoeconomy in the near- to medium-term.
Argus analyst John Staszak downgraded McCormick (MCK) to Hold from Buy. The downgrade reflects McCormick's high input costs and modest earnings prospects over the next year, as well as the stock's relatively high valuation, Staszak told investors in a research note.
BMO Capital analyst Matt Borsch downgraded Universal Health (UHS) to Underperform from Market Perform with a price target of $90, down from $133, following last week's warning of lower second quarter and full year 22 earnings. The analyst also downgraded HCA Healthcare (HCA) to Underperform from Market Perform with a $160 price target, down from $233.
Needham analyst Ryan Koontz downgraded RingCentral (RNG) to Hold from Buy without a price target. It has become clear that Microsoft Teams' (MSFT) enterprise footprint up-sell to voice represents an "increasing headwind" to RingCentral's growth, the analyst noted.
Craig-Hallum analyst Greg Palm downgraded Kornit Digital (KRNT) to Hold from Buy with a price target of $26, down from $54, after Kornit reported "surprisingly poor" Q2 results, with a sizable revenue and profitability miss. Stifel analyst Patrick Ho also downgraded Kornit Digital to Hold from Buy with a price target of $50, down from $100.
Top 5 Initiations:
Wolfe Research analyst Mike Polark initiated coverage of Abbott (ABT) with an Underperform rating and $95 price target. While Abbott has features of a great core healthcare holding and a historical screen of Abbott's fundamental performance is "positive," the current stock price "does not make sense" given his worries about core estimates and the multiple, Polark told investors. The analyst also started coverage of Medtronic (MDT) with an Underperform rating and $85 price target.
Wolfe Research analyst Mike Polark initiated coverage of Boston Scientific (BSX) with an Outperform rating and $43 price target. Among "the big three" Medical Technology names, Boston Scientific seems "not too hot, not too cold, just right," the analyst argued. Polark also started coverage of Teleflex (TFX) with an Outperform rating and a price target of $300.
Truist analyst Michael Ciarmoli initiated coverage of Howmet Aerospace (HWM) with a Buy rating and $41 price target, calling it a " a unique and differentiated asset in the aerospace supply chain."
JPMorgan analyst Paul Chung initiated coverage of Avid Technology (AVID) with an Overweight rating and $33 price target. The analyst expects relative strength in the company's enterprise outlook over the next five years as enterprises accelerate cloud transition at higher contract values.
CL King analyst David Silver initiated coverage of Materion (MTRN) with a Buy rating and $95 price target. Materion has long been associated with beryllium alloys and composites and large market shares in "a clutch of rather mature, cyclical end-markets" and has a reputation as a reliable industrial supplier, but Sliver thinks this "labeling" overlooks a meaningfully upgraded product mix and go-to-market approach that can drive secular growth potential in advanced solutions for silicon wafers, mobile devices and advanced optics.