XPO Logistics upgrade, American Airlines downgrade, and Rocket Pharmaceuticals initiation among today's top calls on Wall Street Institutional investors and professional traders rely on The Fly to learn which companies the best analysts on Wall Street are saying to buy and sell.
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:
- Morgan Stanley analyst Ravi Shanker upgraded XPO Logistics (XPO) to Overweight from Equal Weight with an unchanged price target of $75. The analyst says the shares are "too cheap to ignore."
- Wedbush analyst Matt Bryson upgraded Diebold (DBD) to Outperform from Neutral with an unchanged price target of $5, citing his belief that sales and earnings are positioned to improve through 2022 into 2023 regardless of broader macro trends.
- Cowen analyst Gautam Khanna upgraded Lennox (LII) to Outperform from Market Perform with a price target of $260, down from $295. The stock is "oversold" as the valuation has de-rated by over 25% since the start of this year, despite no cuts to Street estimates, while Lennox also had company-specific overhangs that are abating, Khanna tells investors.
- BofA analyst Bryan Spillane upgraded Vita Coco (COCO) to Buy from Neutral with a price target of $12, up from $10. Now that the ocean freight market is showing signs of stabilization and ocean freight costs continues to ease, he sees potential upside to calendar year 2023 adjusted EBITDA consensus and notes that his own forecasts are 20% above Visible Alpha consensus.
- Wells Fargo analyst Steven Cahall upgraded Omnicom (OMC) to Overweight from Equal Weight with a price target of $73, down from $96. The company has cyclical revenue exposure but it is "far less than prior recessions," Cahall tells investors in a research note. The analyst also upgraded Interpublic Group (IPG) to Overweight from Equal Weight with a price target of $33, down from $40.
Top 5 Downgrades:
- Argus analyst John Staszak downgraded American Airlines (AAL) to Hold from Buy. The downgrade reflects the company's high debt relative to other legacy airlines and concerns Staszak has about the extent to which American Airlines can reduce its leverage, the analyst tells investors in a research note. Higher pilot salaries and high fuel prices are likely to hinder free cash flow and debt reduction, he adds.
- Citi analyst Patrick Donnelly downgraded Agilent (A) to Neutral from Buy with a price target of $140, down from $175. While acknowledging less risk to earnings for the company as compared to the last major U.S. recession in 2008, the analyst believes Agilent's "outsized" industrial/applied end market exposure as compared to core tools peers remains a negative overhang on sentiment and limits the potential multiple expansion in light of the increasing odds of a near/mid-term macroeconomic downturn.
- UBS analyst Steven Fisher downgraded Illinois Tool Works (ITW) to Neutral from Buy with a price target of $185, down from $243. The analyst sees risk to the company's organic growth from rising interest rates affecting residential construction, supply chain risks affecting auto production, and lower levels of electronics demand. The UBS analyst also downgraded Kennametal (KMT) to Sell from Neutral with a price target of $19, down from $27, saying he has an "increased level of conviction" that the company's results will fall short of consensus estimates.
- Wells Fargo analyst Steven Cahall downgraded iHeartMedia (IHRT) to Equal Weight from Overweight with a price target of $9, down from $23. A recession would put the company's narratives around a sum-of-the-parts rerating or deleveraging story on hold as investors brace for a major reduction in radio spend, Cahall tells investors in a research note.
- Citi analyst James Hardiman downgraded Six Flags Entertainment (SIX) to Neutral from Buy with a price target of $26, down from $41. The analyst is "beginning to see signs of weakness" across the theme park industry, with the month of June "particularly problematic."
Top 5 Initiations:
- Raymond James analyst Timur Ivannikov initiated coverage of Rocket Pharmaceuticals (RCKT) with an Outperform rating and $22 price target based on the positive view of lead RP-L102 and RP-L201 gene therapy programs in Fanconi anemia and LAD-I. Based on the recent cell & gene therapy AdCom, Ivannikov thinks experts have a favorable view of LVV-based gene therapies in rare pediatric diseases, and tells investors in a research note that Rocket's biggest market opportunity lies with RP-A501 in Danon disease, with peak adjusted revenue $1.08B.
- Oppenheimer analyst Noah Kaye initiated coverage of Vertex Energy (VTNR) with an Outperform rating and $18 price target. Vertex is transitioning into an independent refiner of conventional and renewable diesel fuels with the April acquisition of Shell's Mobile, Alabama refinery, Kaye tells investors in a research note.
- Benchmark analyst Douglas Becker initiated coverage of NOW Inc. (DNOW) with a Buy rating and $13 price target, stating that he believes it is underappreciated how the company has transformed its business over the past two years and is now generating its highest adjusted EBITDA margins as a public company on less than half as much revenue as at its high.
- Oppenheimer analyst Matthew Biegler initiated coverage of Blueprint Medicines (BPMC) with an Outperform rating and $80 price target. The analyst believes Bluepring "checks all the boxes," with a core expertise in targeted oncology, two marketed drugs in sizable indications, and a pipeline with blockbuster potential.
- Northland analyst Abhishek Sinha initiated coverage of Bloom Energy (BE) with an Outperform rating and $28 price target. Sinha believes Bloom "fits the bill" for an energy platform that is resilient, sustainable, and predictable and sees the company being at an inflection stage.
Symbols:
AAL RCKT ITW KMT A IHRT SIX XPO DBD LII COCO OMC IPG VTNR DNOW BPMC BE Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street