Foot Locker upgrade, AMD downgrade, and Shopify initiation among today's top calls on Wall Street
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Top 5 Upgrades:
- Credit Suisse upgraded Foot Locker (FL) to Outperform from Neutral with a price target of $62, up from $38. The analyst thinks sentiment on the stock remains "overly bearish" and focused on the negative thesis of Nike (NKE) pulling back from Foot Locker.
- BofA upgraded TransUnion (TRU) to Buy from Neutral with a price target of $91, up from $72. Recession risk is priced into the stock and margins are a positive catalyst, said the firm, which expects a "valuation true up" given it forecasts strong margins, even in a recession. 2023 EBITDA margin expansion potential from recent M&A is "underappreciated."
- JPMorgan upgraded Hubbell (HUBB) to Neutral from Underweight with a price target of $205, up from $200. With the stock having de-rated dramatically and some positive estimate revisions, Hubbell now trades around its historical 0-5% discount to the sector on what looks to be realistic expectations for this year, the firm says.
- Needham upgraded NeoGenomics (NEO) to Buy from Hold with a $15 price target. The analyst is "more encouraged" by NeoGenomics' revenue and margin growth in recent quarters amid changes to pricing and operational improvements.
- UBS upgraded LexinFintech (LX) and FinVolution (FINV) each to Buy from Neutral, given its view on China's reopening, eased near-term regulatory risk, and a stabilized take rate outlook.
Top 5 Downgrades:
- Craig-Hallum downgraded AMD (AMD) to Hold from Buy with a $76 price target on slowing growth following quarterly results. While AMD has executed very well for multiple years, the firm believes the company may now have become a victim of its own success.
- BofA downgraded Electronic Arts (EA) to Neutral from Buy with a price target of $130, down from $155, following the company's fiscal Q3 miss, noting that EA’s 2024 growth guidance is "well below" the Street forecast.
- Benchmark downgraded Snap (SNAP) to Hold from Buy and removed the firm's price target following the company's Q4 report. While Snap has attempted to manage ROAS during Apple's (AAPL) ATT disruptions, the firm fears fingerprinting and probabilistic targeting face "significant risk" of being officially outlawed by Apple and Snap management's delay in trying to "retrain its (machine-learning) models" leaves them "even further behind the social returns curve." UBS also downgraded Snap to Neutral from Buy with an unchanged price target of $10.
- Goldman Sachs downgraded Funko (FNKO) to Sell from Neutral with a price target of $8.50, down from $22. The stock’s "rich" valuation is coupled with a high degree of execution risk to consensus growth expectations, Goldman contends.
- Goldman Sachs downgraded Hasbro (HAS) to Neutral from Buy with a $64 price target. While the firm sees opportunity for Hasbro to ramp capital returns to shareholders through both growing its dividend and share repurchases, Goldman believes the timeline will determined by the pace of the company's deleveraging.
Top 5 Initiations:
- Scotiabank initiated coverage of Shopify (SHOP) with a Sector Perform rating and $43 price target. While he firm believes Shopify "should be a core tech holding given its position as a category leader helping to rewire the retail industry, the neutral rating reflects the stock's "robust" valuation following the 40% year-to-date and near double September lows.
- Mizuho initiated coverage of General Mills (GIS) with a Neutral rating and $75 price target. The firm believes General Mills' short-term risk/reward is tempered by a valuation that already reflects the company's defensive characteristics and consensus at the high-end of guidance.
- Mattel (MAT) was assumed at Goldman Sachs with a Buy rating and $26 price target. The firm believes Mattel is well positioned to beat consensus revenue and EBITDA estimates, driven by the "successful execution" of relaunching the Disney Princess and Monster High franchises, extending its leadership position in vehicles through product innovation, and capitalizing on a strong slate of upcoming supporting content.
- Morgan Stanley initiated coverage of Rocket Pharmaceuticals (RCKT) with an Overweight rating and $45 price target. The company’s pipeline is anchored by RP-A501 in Danon disease, which has blockbuster potential and is expected to enter a pivotal study in Q2, the firm says.
- Cantor Fitzgerald initiated coverage of Beam Therapeutics (BEAM) with an Overweight rating and $62 price target. While the company only recently initiated Phase 1 clinical trials in sickle cell disease, Cantor Fitzgerald sees long-term value in Beam's platform, pipeline, and capability to develop partnerships with favorable economics.
Symbols: FL NKE TRU HUBB NEO LX FINV AMD EA SNAP AAPL FNKO HAS SHOP GIS MAT RCKT BEAM
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street