Regeneron upgrade, Salesforce downgrade, and Wayfair 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:
- JPMorgan analyst Chris Schott upgraded Regeneron (REGN) to Overweight from Neutral with an $850 price target ahead of a number of important catalysts he expects in 2023. He remains above consensus and sees upside to Street estimates for Dupixent, while he sees 8mg Eylea as a " best in class therapy" that can meaningfully extend Regeneron's U.S. AMD franchise, Schott tells investors.
- Morgan Stanley analyst Sanjit Singh upgraded PagerDuty (PD) to Overweight from Equal Weight with a price target of $36, up from $32. He has remained on the sidelines since PagerDuty's IPO in 2019, largely due to concerns on valuation, but revenue growth has proven durable and he believes that the company can sustain about 20% growth over the next few years, Singh tells investors.
- Barclays analyst Adrienne Yih upgraded Ralph Lauren (RL) to Overweight from Equal Weight with a price target of $134, up from $101, citing its position as "a best-in-class apparel brand," continued elevation, improvement in the outlook for its European segments and reduced foreign exchange headwinds.
- BMO Capital analyst Peter Sklar upgraded Restaurant Brands (QSR) to Outperform from Market Perform with a price target of $72, up from $63. The analyst noted that traffic trends have been flat to negative for most quick service restaurants due to tough 2021 comps and a hurting consumer wallet, but he expects traffic to turn positive in the near future as "COVID-recovery comps are lapped and as inflation finally eases."
- Piper Sandler analyst Ryan Todd upgraded Par Pacific (PARR) to Overweight from Neutral with a price target of $33, up from $27. He views the closing of the Billings acquisition expected in Q2 as significant for Par given how it will increase portfolio scale and quality, Todd tells investors.
Top 5 Downgrades:
- Cowen analyst J. Derrick Wood downgraded Salesforce (CRM) to Market Perform from Outperform with a price target of $160, down from $175. He sees elevated risk of disruption given several recent executive departures and a major restructuring underway, Wood tells investors.
- Morgan Stanley analyst Sanjit Singh downgraded Domo (DOMO) to Equal Weight from Overweight with a price target of $16, down from $24. He had misjudged how quickly operational challenges that arose in FY23 have materially altered Domo's growth profile and disruption risks are still present following a wave of executive departures and heading into a tougher spend environment, Singh tells investors.
- Citi analyst P.J. Juvekar downgraded Mosaic (MOS) to Neutral from Buy with a price target of $50, down from $61. Mosaic has about 50% exposure to potash, which Juvekar calls "the weakest of the three nutrients." While he is not calling for "peak Ag" given that farmers "remain in robust shape," he does think the risk/reward in general for the group is "less attractive today compared to a year ago."
- MKM Partners analyst Rohit Kulkarni downgraded Pinterest (PINS) to Neutral from Buy with an unchanged $27 price target. The stock has risen 52% since late July while consensus estimates for 2023 and 2024 have "steadily declined," and at current levels, the risk-reward on Pinterest looks "fairly balanced," the analyst tells investors in a research note.
- KeyBanc analyst Josh Beck downgraded Squarespace (SQSP) to Sector Weight from Overweight without a price target. Despite Beck's generally constructive stance on both management teams and long-term strategy in the commerce/backoffice software space, reduced visibility prompts a more cautious stance on Squarespace.
Top 5 Initiations:
- KeyBanc analyst Bradley Thomas initiated coverage of Wayfair (W) with a Sector Weight rating and no price target. Wayfair, along with the furniture and home furnishings industry, significantly benefitted from a pull-forward in demand during the pandemic, but investors are increasingly focused on businesses that generate positive EBITDA and free cash flow in the current macroeconomic environment, Thomas said.
- BMO Capital analyst Michael Zaremski initiated coverage of Lemonade (LMND) with an Underperform rating and $10 price target. Lemonade's current gross expense ratio is far above peers and is more reliance on reinsurance than peers, which is a risk as reinsurance appetites could meaningfully shrink if loss ratios deteriorate, Zaremski tells investors in a research note.
- Citi analyst Ashiq Mubarack initiated coverage of Mersana Therapeutics (MRSN) with a Buy rating and $12 price target. He believes topline registrational data from the UPLIFT Phase 2 study evaluating upifitamab rilsodotin in platinum-resistant ovarian cancer, or PROC, will be "a catalyst of significant debate" over the next roughly six months, Mubarack tells investors.
- RBC Capital analyst Brian Abrahams initiated coverage of Marinus Pharmaceuticals (MRNS) with an Outperform rating and $23 price target. The analyst is positive on the company's "strong progress revitalizing the prospects for lead drug ganaxolone", and he believes that a solid initial launch in CDD could quickly contribute to cash flows.
- BMO Capital analyst Michael Zaremski initiated coverage of W. R. Berkley (WRB) with a Market Perform rating and $76 price target. While he still sees "meaningful investment income upside," earnings revisions have "begun to reflect the interest rate curve," according to Zaremski.
Symbols: DOMO PD REGN RL QSR CRM MOS PINS SQSP W PARR MRSN MRNS WRB
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street