NetApp upgrade, Roku downgrade and Airbnb 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:
OTR Global upgraded NetApp (NTAP) to Positive from Mixed following checks with channel partners in North America and EMEA that pointed to market share gains during fiscal first quarter.
CMB International analyst Walter Woo upgraded Yum China (YUMC) to Buy from Hold with a HK$426.17 price target, up from HK$287.57. The analyst says that while second quarter could still be loss-making and future earnings cuts still occur, a low base, easing of COVID-19 restrictions and effective costs management make him positive on the company's second half of 2022.
Maxim analyst Naz Rahman upgraded Agile Therapeutics (AGRX) to Buy from Hold with a $1 price target. The analyst cited the company's closed $24M equity offering as well as the management's austerity efforts, which should preserve its cash runway into the first quarter of next year.
US Capital Advisors analyst James Carreker upgraded Cheniere Energy Partners (CQP) to Hold from Underweight with a $52 price target.
JPMorgan analyst Rachel Vatnsdal upgraded Zymergen (ZY) to Neutral from Underweight without a price target after the company agreed to be acquired by Ginkgo Bioworks (DNA) for $300M.
Top 5 Downgrades:
Wolfe Research analyst Peter Supino downgraded Roku (ROKU) to Underperform from Peer Perform with a $77 price target. The company's net subscriber additions and average revenue per user are "face mounting challenges," Supino told investors in a research note. Meanwhile, Raymond James analyst Aaron Kessler initiated coverage of Roku with a Market Perform rating and no price target.
Goldman Sachs analyst Brett Feldman double downgraded Paramount (PARA) to Sell from Buy with a price target of $20, down from $37. Macro headwinds are likely to intensify pressures on Paramount's EBITDA and free cash flow through at least 2023, which increases the risk that the company will be able to execute its streaming strategy in a market that is already seeing intensified competition, Feldman contended.
Wedbush analyst Seth Basham downgraded Chewy (CHWY) to Neutral from Outperform with a price target of $44, up from $35. The analyst notes that shares of Chewy have appreciated over 70% since late May 2022 when it was trading at trough multiples of 0.85 EV/near-term sales, and while Chewy's current valuation is slightly less than a turn below its historical median of 2.5-times EV/near-term sales, Basham sees more downside risk to shares after the latest run.
Jefferies analyst Brent Thill downgraded MicroStrategy (MSTR) to Underperform from Hold with an unchanged price target of $180. The company's bitcoin investment is still losing money, down 25% despite the recent run up in crypto, Thill told investors in a research note.
Bank of America analyst David Buckley downgraded American Eagle (AEO) to Underperform from Neutral with an $8 price target. He expects results to fall short of expectations in the near-term and has lowered his 2022 and 2023 EPS estimates by 24% and 35%, respectively, to reflect decelerating trends in the teen clothing category and a continued shift from athleisure into occasion wear, the latter of which is a category where Aerie is underexposed.
Top 5 Initiations:
Argus analyst John Staszak initiated coverage of Airbnb (ABNB) with a Hold rating. While the company should benefit from its strong brand recognition and base of four million hosts around the world, shares trade at 36-times his expected 2022 estimate, which is "well above" the 20-times industry average, the analyst argued.
Goldman Sachs analyst Brett Feldman reinstated coverage of Warner Bros. Discovery (WBD) with a Buy rating and $22 price target. The merger of Discovery and WarnerMedia positions Warner Bros. to achieve "material scale as a global streamer while also fortifying its linear networks business and driving significant cost synergies," Feldman contended.
BTIG analyst Julian Harrison initiated coverage of Keros Therapeutics (KROS) with a Buy rating and $80 price target. The analyst sees "compelling reasons" to expect the company's activin receptor ligand traps to become best-in-class.
BMO Capital analyst John Kim initiated coverage of Howard Hughes (HHC) with an Outperform rating and $90 price target. The analyst believes Howard Hughes shares are undervalued relative to his net asset value, providing an attractive risk-adjusted return.
Argus analyst John Eade initiated coverage of Oshkosh (OSK) with a Hold rating. While the company is "well run" and has a strong track record in the industry, it is facing near-term challenges from inflation and supply-chain disruptions, the analyst told investors in a research note.