Spotify upgrade, PayPal downgrade, and Marriott Vacations initiation among today's top calls on Wall Street
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Top 5 Upgrades:
- Wells Fargo upgraded Spotify Technology (SPOT) to Overweight from Equal Weight with a price target of $180, up from $121. Wells sees Spotify's margins and valuation as "upward bound with margin delivery rerating" the shares. Atlantic Equities also upgraded Spotify to Overweight from Neutral.
- KeyBanc upgraded Splunk (SPLK) to Overweight from Sector Weight with a $130 price target. The firm likes its position as the incumbent enterprise log/data management vendor.
- Atlantic Equities upgraded Church & Dwight (CHD) to Neutral from Underweight with an $80 price target. The firm believes headwinds will begin to abate in the first half of 2023 with gross margins expected to expand and sales growth to accelerate through the year.
- Wedbush upgraded Celsius Holdings (CELH) to Outperform from Neutral with a price target of $115, up from $95. The firm believes that the recent pullback in shares creates an attractive entry point for investors looking to gain exposure to the best growth story in all of CPG.
- UBS upgraded Essential Utilities (WTRG) to Buy from Neutral with a price target of $55, up from $54. The firm sees a valuation-driven opportunity in shares given the current 12% discount to SOTP fair value.
Top 5 Downgrades:
- Raymond James downgraded PayPal (PYPL) to Market Perform from Outperform without a price target, citing the stock's outperformance this year along with the firm's "cautious stance" on the company's Q4 results.
- KeyBanc downgraded Datadog (DDOG) to Sector Weight from Overweight without a price target as it expects a "meaningful slowdown" of software spending growth in 2023.
- MoffettNathanson downgraded T-Mobile (TMUS) to Market Perform from Outperform with an unchanged price target of $174 in a note to investors partially titled "Wireless Q4 2022: The Great Deceleration." The firm sees a "growing mismatch" between industry growth rates and company expectations, not just for T-Mobile, but for all of the "Big Three" inclusive of Verizon (VZ) and AT&T (T) as well.
- Telsey Advisory downgraded RH (RH) to Market Perform from Outperform with a price target of $330, up from $310. The firm expects RH to trade down on Monday following the company’s disclosures in its 8-K and proxy filings on Friday, including having updated its 2022 guidance, disclosing it found several mistakes after reviewing SEC comments on prior financial statements, stating it plans a revision to the effective tax rate, and identifying a material weakness in its internal control over financial reporting.
- SVB Securities downgraded Seagen (SGEN) to Market Perform from Outperform with a price target of $141, down from $162, driven by insights into the Padcev opportunity in metastatic bladder cancer gleaned from a proprietary MEDACorp survey.
Top 5 Initiations:
- BofA initiated coverage of Marriott Vacations (VAC) with a Neutral rating and $180 price target. Parts of Marriott Vacations, and the timeshare industry, are still recovering from the pandemic, but pricing and margins are both well ahead of pre-COVID levels, the firm says.
- Maxim initiated coverage of Interlink Electronics (LINK) with a Buy rating and $18 price target. The firm sees a positive inflection in the sensor market, which is typically less economically sensitive and more value-added compared to the semiconductor industry overall.
- Cowen initiated coverage of BridgeBio (BBIO) with an Outperform rating. The firm thinks "significant" near-term upside could be realized if infigratinib in children with achondroplasia works and if BBP-711 in healthy volunteers hits in Part B of its trial.
- Credit Suisse initiated coverage of Goosehead Insurance (GSHD) with an Outperform rating and $72 price target, or 62% upside potential, based on an analysis of a price-to-earnings-to-growth ratio of a peer set of insurance brokers.
- BMO Capital initiated coverage of Rexford Industrial (REXR) with an Outperform rating and $77 price target. BMO believes the company will likely deliver industry-high net operating income, supported by 72% mark-to-market.
Symbols: SPOT SPLK CHD CELH WTRG PYPL DDOG TMUS VZ T RH SGEN VAC LINK BBIO GSHD REXR
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street