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Check out today's top analyst calls from around Wall Street:
Top 5 Upgrades:
- Evercore ISI upgraded Walmart (WMT) to Outperform from In Line with a price target of $160, up from $145. The pivot to omnichannel, divesting of non-core assets and investments in productivity have positioned the company for traffic and margin upside over the next two years, the firm says. [Read more]
- DA Davidson upgraded Paycom (PAYC) to Buy from Neutral with an unchanged $350 price target. Growth is slowing for Paycom, but the downside risk to estimates outside of a severe recession is limited, the firm says. [Read more]
- DA Davidson upgraded Paylocity (PCTY) to Buy from Neutral with an unchanged $245 price target. DA Davidson believes valuation is "much more inviting" than last year. [Read more]
- JPMorgan upgraded Philip Morris (PM) to Overweight from Neutral with a price target of $116, up from $109. IQOS ILUMA has "stepped up" the company's heated tobacco share in its initial launch markets, yet it's been impacted by severe supply chain constraints, which should ease in the second half of 2023, the firm says. [Read more]
- Goldman Sachs upgraded SunPower (SPWR) to Neutral from Sell with an unchanged price target of $13. Expectations and the stock's valuation have come down significantly, creating a risk/reward that is more balanced, the firm says. [Read more]
Top 5 Downgrades:
- Morgan Stanley downgraded Charles Schwab (SCHW) to Equal Weight from Overweight with a price target of $68, down from $99. The stock is down down 30% month-to-date, but there remains "limited visibility on multiple variables," the firm says. [Read more]
- Argus downgraded Hormel Foods (HRL) to Hold from Buy. The company is struggling to expand margins and grow earnings, with the recent Q1 EPS miss also falling 10% relative to last year, the firm notes. [Read more]
- Wells Fargo downgraded Park Hotels & Resorts (PK) to Equal Weight from Overweight with a price target of $12.50, down from $17. While Park Hotels & Resorts showed well in Wells' liquidity analysis, the firm believes the best case scenario for its 2023 CMBS maturity is well known, while other scenarios may pause its current year-to-date share price outperformance. [Read more]
- Wells Fargo downgraded Xenia Hotels (XHR) to Equal Weight from Overweight with a price target of $13, down from $18, citing the firm's analysis that takes into account the lodging REITs' historical spread to the 10yr Treasury, liquidity, maturities, and its 2023/2024 estimates. [Read more]
- Morgan Stanley downgraded Southern Copper (SCCO) to Equal Weight from Overweight with an unchanged $70 price target. Southern Copper has outperformed its copper peers over the last three, six, and 12 months, but its risk-reward is now more balanced with the stock more adequately reflecting the company's strong cash generation and consistent returns to shareholder, the firm says. [Read more]
Top 5 Initiations:
- William Blair initiated coverage of General Dynamics (GD) with an Outperform rating and no price target. General Dynamics' "multiple gap" with its defense systems provider should narrow as its revenue growth accelerates, the firm says. [Read more]
- Barclays reinstated coverage of Global Payments (GPN) with an Overweight rating and $125 price target, saying the company's current valuation and share price is "dislocated." [Read more]
- B. Riley initiated coverage of Crocs (CROX) with a Buy rating and $157 price target. The firm believes the "polarizing and opinion-driving nature" of Crocs' core clog product has distracted many investors from appreciating the company's business model, competitive advantages, importance to the footwear ecosystem, and international growth potential. [Read more]
- TD Cowen initiated coverage of Zebra Technologies (ZBRA) with an Outperform rating and $375 price target. The firm, which notes that its estimates are 5%-6% above the Street view, sees double-digit percentage EPS growth in FY24 "without making big assumptions about retail capex moving materially higher." [Read more]
- Canaccord initiated coverage of Spectrum Brands (SPB) with a Buy rating and $82 price target. The firm believes a "leaner, more focused, and higher margin/growth company" should produce more predictable results, commanding a higher valuation multiple. [Read more] Meanwhile, Wolfe Research started coverage of Spectrum Brands with a Peer Perform rating and no price target. [Read more]
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