UPS upgrade, Roku downgrade, and Affirm 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:
- Deutsche Bank analyst Amit Mehrotra upgraded UPS (UPS) to Buy from Hold with a price target of $220, up from $197. While stating that its "easy to be neutral or negative on UPS in the current environment," Mehrotra argues that past experiences argues that times like this are "exactly" when to get more bullish.
- Wells Fargo analyst Larry Biegelsen upgraded Novocure (NVCR) to Overweight from Equal Weight with a price target of $89, up from $74. The analyst sees a positive risk/reward into the LUNAR non-small cell lung cancer trial, which is expected in early 2023.
- Deutsche Bank analyst Amit Mehrotra upgraded Canadian Pacific Railway (CP) to Buy from Hold with a price target of $98, up from $80. The analyst believes "very little" of the $1B in synergies from the Kansas City Southern (KSU) deal is reflected in CP's share price today, which he says should begin to take hold starting in Q1 of next year after final approval from the Surface Transportation Board.
- Wedbush analyst Jay McCanless upgraded Geo Group (GEO) to Outperform from Neutral with a price target of $14, up from $10. The analyst now believes there are several tailwinds in place to offset these concerns, including a potential near-term revocation of Title 42, a recent successful debt restructuring transaction, and shifting political sentiment towards alternatives to detention, which should drive growth in the company's high margin electronic monitoring business.
- Berenberg analyst Tom Horne upgraded LondonMetric (LNSPF) to Hold from Sell with a price target of 185 GBp, down from 200 GBp. The analyst says the bad news is now priced into the shares following the company's first half results.
Top 5 Downgrades:
- KeyBanc analyst Justin Patterson downgraded Roku (ROKU) to Sector Weight from Overweight without a price target. The analyst says elements of his positive thesis, namely outsized growth in connected TV advertising and the company becoming a critical platform for media partners, have not manifested.
- Baird analyst David Tarantino downgraded Darden Restaurants (DRI) to Neutral from Outperform with a price target of $150, up from $134. When factoring in the year-to-date outperformance for the shares and the "lingering risks related to the macro outlook," the risk/reward on Darden has become more balanced at current valuation metrics, Tarantino tells investors in a research note.
- Jefferies analyst Saree Boroditsky downgraded Generac (GNRC) to Underperform from Hold with a price target of $85, down from $95. The analyst sees "material downside risk" to the company's earnings following three years of elevated home and small business generator demand.
- Argus analyst David Coleman downgraded Goodyear Tire (GT) to Hold from Buy. The analyst warns that the company is facing pressure from rising costs, unfavorable currency translation, and weakness in the EMEA region.
- Scotiabank analyst Hector Maya downgraded PriceSmart (PSMT) to Sector Perform from Outperform with a price target of $77, down from $96, as he assumed coverage of the stock. While he likes PriceSmart's position as the largest club membership retailer in Central America and the Caribbean, he sees "very conservative" store-count expansion limiting the growth potential and has concerns about growing exposure to Colombia and possible depreciation in other local currencies at its operations.
Top 5 Initiations:
- UBS analyst Rayna Kumar initiated coverage of Affirm (AFRM) with a Neutral rating and $14 price target. The analyst states that based on its exclusive relationships with partners that include Shopify (SHOP) and Amazon (AMZN), the company has a "firm footing" in the BNPL model, but she remains concerned that "macro uncertainty" weighs on its outlook.
- Redburn analyst Fahed Kunwar initiated coverage of American Express (AXP) and MasterCard (MA) with Neutral ratings, and Visa (V) with a Sell rating. The brand power of debit is fading as digital wallets grow, contends Kunwar, who thinks the market underestimates the cyclical and structural concerns weighing on card network stocks.
- Wolfe Research analyst Darrin Peller initiated coverage of Toast (TOST) with a Peer Perform rating without a price target. The analyst believes that in the backdrop of upcoming macro headwinds combined with a premium valuation and little profitability, a neutral rating is warranted.
- H.C. Wainwright analyst Scott Buck initiated coverage of RCI Hospitality (RICK) with a Buy rating and $120 price target. The analyst says "outdated biases may have many investors missing out on this best-in-class operator."
- Lake Street analyst Troy Jensen initiated coverage of Protolabs (PRLB) with a Buy rating and $29 price target. The company made a "transformational acquisition" of Hubs3D in 2021 and has built a highly automated service bureau using both proprietary software and traditional manufacturing technologies, Jensen tells investors.
Symbols: UPS NVCR CP KSU GEO LNSPF ROKU DRI GT PSMT AFRM SHOP AMZN AXP MA V TOST RICK PRLB
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street