FuboTV upgrade, Ally Financial downgrade, and Zoom Video 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:
Wedbush analyst Michael Pachter upgraded FuboTV (FUBO) to Outperform from Neutral with a $6 price target. Pachter is confident FuboTV can raise capital and cut cash burn rapidly to extend its cash runway, but it is uncertain how dilutive the capital raise will be and how rapidly their cash burn will improve, the analyst tells investors in a research note.
Evercore ISI analyst Josh Schimmer upgraded Spero Therapeutics (SPRO) to Outperform from In Line with a price target of $8, up from $2. The exclusive license agreement with GSK (GSK) "makes a lot of sense" given Spero's previously limited access to capital, Schimmer tells investors in a research note.
BofA analyst Craig Siegenthaler upgraded Apollo Global (APO) to Neutral from Underperform. The analyst says the stock's valuation has improved and become "more attractive."
BMO Capital analyst Andrew Strelzik upgraded Domino's Pizza (DPZ) to Outperform from Market Perform with an unchanged price target of $430. Against the backdrop of lowered near-term expectations, the stock offers an attractive risk/reward.
JPMorgan analyst Mark Murphy upgraded Datadog (DDOG) to Neutral from Underweight with a price target of $105, down from $200, after resuming coverage of the name. Datadog is a leader in the IT operations management market, providing a unified monitoring and security platform that supports applications across all infrastructure environments, with a focus on the public cloud, Murphy tells investors in a research note.
Top 5 Downgrades:
Wells Fargo analyst Donald Fandetti downgraded Ally Financial (ALLY) to Equal Weight from Overweight with a $32 price target. Fandetti believes it will be difficult for the stock to outperform as used vehicle price declines accelerate, NIM is pressured from Fed hikes, and the consumer works through the headwind of inflation, the analyst tells investors in a research note.
Barclays analyst Brendan Lynch downgraded Equinix (EQIX) to Equal Weight from Overweight with a price target of $674, down from $822. Rising energy prices, coupled with the company's evolving cloud offerings and accounting practices, may lead to a lower earnings trajectory and valuation through 2024, Lynch tells investors in a research note.
Needham analyst Mike Matson downgraded Steris (STE) to Hold from Buy. With Sotera Health (SHC) losing a $363M lawsuit over ethylene oxide, or EO, exposure, the concerns about the company's potential liabilities will continue to weigh on its shares, the analyst tells investors in a research note.
UBS analyst Brennan Hawken downgraded Evercore (EVR) to Sell from Neutral with a price target of $85, down from $99. The analyst warns that the company's shrinking deal pipeline increases the risk of inflexibility in their expense, which he believes is not being fully captured by consensus estimates.
Barclays analyst Brendan Lynch downgraded Digital Realty (DLR) to Underweight from Equal Weight with a price target of $91, down from $126, implying 15% downside. The analyst sees contracting organic metrics and "weak" return on invested capital for Digital Realty due to its "asset obsolescence and expensive acquisitions."
Top 5 Initiations:
Credit Suisse analyst Fred Lee initiated coverage of Zoom Video (ZM) with a Neutral rating and $83 price target. Zoom has the most significant risk in his coverage universe in both directions, and while it is in the very early innings of its enterprise telephony ramp, 45% of revenues today consist of low-touch online, predominantly consumer, business, Lee tells investors in a research note.
Stephens analyst Joshua Long initiated coverage of Chipotle Mexican Grill (CMG) with an Overweight rating and $1,900 price target. The analyst views Chipotle as a "best-in-class operator" within the fast casual dining segment that is well positioned to capitalize on consumer demand for its brand experience.
BofA analyst Jason Gerberry initiated coverage of ProKidney (PROK) with a Buy rating and $14 price target. The analyst cites the company's ongoing phase 3 program evaluating the autologous cell therapy that would halt and potentially reverse the progression of kidney disease in diabetic CKD.
UBS analyst Atul Maheswari assumed coverage of Wayfair (W) with a Neutral rating and a price target of $45, down from $65. The company's profitability is likely to be challenged for the foreseeable future given the tough industry and macro backdrop along with a high cost of capital, the analyst tells investors in a research note.
Raymond James analyst Gregory Peters initiated coverage of Cincinnati Financial (CINF) with a Market Perform rating and no price target. The stock is down 21.5% year-to-date, reflecting in part disappointing Q2 results primarily due to the near-term challenges associated with increasing reserves for rising severity trends, Peters tells investors in a research note.