Ciena upgrade, Centessa double downgrade, and Microsoft 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 Meta Marshall upgraded Ciena (CIEN) to Overweight from Equal Weight with a price target of $65, up from $56. Her reservation on being Overweight earlier this year was "largely valuation," but she thinks the next year presents an opportunity for meaningful growth for the company and a re-rating for the stock as supply chain situations seem to hit bottom in Q2 and look to sequentially improve over the second half, Marshall tells investors.
- Raymond James analyst Steven Seedhouse upgraded ProQR Therapeutics (PRQR) to Outperform from Market Perform with a $2 price target, citing his "high conviction" that "RNA editing" emerges as an impactful field of therapeutics in coming years. In his initial initiation of coverage of the stock he had said he would own ProQR for RNA editing alone, "not realizing our call was about to get blown up by sepofarsen Phase 3 failure," but now he sees an "opportunity to own and defend that call, which we are doing with conviction," Seedhouse tells investors.
- BofA analyst Julien Dumoulin-Smith upgraded Alliant Energy (LNT) to Buy from Neutral with a price target of $70, up from $62, calling it a "winner" assuming passage of the Inflation Reduction Act, or IRA. If provisions of the act are largely unchanged from the version that passed in the Senate, he expects Alliant will benefit in the form of $1B higher capex on solar projects in coming years, driving EPS growth above the top end of management's current 5%-7% target range, the analyst tells investors.
- Deutsche Bank analyst Emmanuel Papadakis upgraded Sanofi (SNY) to Hold from Sell with an unchanged price target of EUR 90. The Zantac litigation "knee-jerk" reaction is "starting to look somewhat overdone" and although this doesn't "make for an obvious buying opportunity in our view," keeping a Sell rating on the stock at current levels "feels egregious," Papadakis tells investors.
- Mizuho analyst Haendel St. Juste upgraded Safehold (SAFE) to Buy from Neutral with a price target of $50, down from $75, following the announcement that it is internalizing its external manager iStar (STAR) in a transaction valued at roughly $150M. St. Juste views the contemplated restructuring favorably given the view that it improves Safehold structurally while providing financial, technical and operational benefits that collectively justify a higher multiple.
Top 5 Downgrades:
- Morgan Stanley analyst Matthew Harrison double downgraded Centessa (CNTA) to Underweight from Overweight with a price target of $5, down from $10. Harrison tells investors in a research note that he was "clearly wrong" on his assessment of Centessa's pipeline, with three of the late stage assets being discontinued following the failure of lixivaptan. While management has enough cash and early stage assets to potentially drive long-term value, Harrison is moving to Underweight to reflect the lack of near-term upside for Centessa and the need to wait for other early stage pipeline programs to mature before they can contribute meaningful value.
- KeyBanc analyst Brett Andress downgraded Six Flags (SIX) to Sector Weight from Overweight with no price target, calling the company's Q2 results "indefensible." He does not think patience is abundant and management is likely to be "stuck talking into the void until it gets another shot" at proving its strategy's efficacy in the spring or summer of 2023, Andress tells investors.
- Stifel analyst Brad Reback downgraded Olo (OLO) to Hold from Buy with a price target of $9, down from $12, after the company posted "disappointing" Q2 results and gave second half guidance below sell-side expectations. Management also disclosed Subway has begun the process of replacing Olo's Rails product with an in-house solution, noted Reback, who is uncertain how quickly the company will adjust to the restaurant industry's "new reality."
- Jefferies analyst Brent Thill downgraded CS Disco (LAW) to Hold from Buy with a price target of $25, down from $35, after the company reported a "narrow beat across the board," but roughly halved its prior FY23 top line growth guidance. He has lower visibility on top line growth given the volatility cited by management on the Review product. CS Disco was also downgraded at Cowen, Canaccord, and BofA.
- Cowen analyst Oliver Chen downgraded e.l.f. Beauty (ELF) to Market Perform from Outperform with a $36 price target. While he believes e.l.f. is well positioned to gain share from legacy players in the mass beauty category and expresses "high conviction" in its long-term growth prospects, Chen sees risks to valuation given that e.l.f. will likely have tougher compares in FY24 as it laps benefits from a price increase this May and the cosmetics category rebound.
Top 5 Initiations:
- Guggenheim analyst John DiFucci initiated coverage of Microsoft (MSFT) with a Neutral rating and $292 price target. While he believes Microsoft can grow revenue and free cash flow in the mid-teens percentage on average, driven by upside to consensus numbers in Azure and Office Commercial 365, he sees continued declines in Windows that he believes are still "not fully reflected in consensus estimates," DiFucci tells investors.
- DA Davidson analyst Robert Simmons initiated coverage of GoodRx (GDRX) with a Neutral rating and $8 price target. The company's scale advantage helps it reach consumers more cost effectively, negotiate with partners, and find lucrative additional offerings to add to its core, but he prefers to have greater clarity on the enduring revenue headwinds from the Kroger situation to become more constructive on the name, even though the current valuation on on the stock is "reasonable," the analyst tells investors in a research note.
- Cantor Fitzgerald analyst Kristen Kluska initiated coverage of Mereo BioPharma (MREO) with an Overweight rating and $4 price target. Setrusumab showed promising signals in a Phase 2b study showing increases in volumetric bone mineral density in OI patients, and Kluska views OI as a high unmet need indication with no approved treatments, modeling peak sales and royalties of ~GBP 700M in 2035E.
- Baird analyst Luke Junk initiated coverage of BlackBerry (BB) with a Neutral rating and $7 price target. He is positive on the company's auto software platform, which is meeting an industry inflection point, and believes BlackBerry IVY "could be the start of something big," but cybersecurity is the larger business and remains in "wait-and-see mode," so he sees in-line performance as the likely outcome over the next 12 months, Junk tells investors.
- Wolfe Research analyst Sam Margolin initiated coverage of Archer Daniels (ADM) with an Outperform rating and $117 price target. The stock offers "highly competitive dividend growth" through its Nutrition segment alone, the analyst tells investors in a research note.
Symbols:
CIEN PRQR CNTA SIX - $21.12 /
-4.685 (-18.16%)
OLO LAW ELF MSFT GDRX MREO BB ADM LNT SNY SAFE Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street