What has Wall Street been buzzing about this week? Here are the top 5 Buy calls and the top 5 Sell calls made by Wall Street's best analysts during the week of November 20-24.
Find all top-rated stocks by the best-rated analysts on TipRanks.
Top 5 Buy Calls:
1. Nomura upgrades Baidu on "cheap" valuation, AI initiative
Nomura upgraded Baidu (BIDU) to Buy from Neutral with a price target of $145, up from $135. The "cheap valuation" following the stock's 30% decline since the July peak plus the company's resolution to buy back shares aggressively from now "seem to warrant the benefit of doubt" about its artificial intelligence initiative, the firm tells investors in a research note. Nomura believes incremental downside risks appear limited at current share levels. Baidu's Ernie Bot AI initiative "leads among its Chinese peers in terms of overall performance, which we think may give Baidu a head start in this increasingly competitive market," writes the firm.
2. Deutsche upgrades Boeing to Buy on accelerating aircraft deliveries
Deutsche Bank upgraded Boeing (BA) to Buy from Hold with a price target of $270, up from $204, which offers 30% upside. Aircraft deliveries are accelerating and there's a credible case to be made that this improved performance can be sustained, the firm tells investors in a research note. If that is correct, Boeing's momentum on deliveries should carry through to a positive inflection in free cash flow revisions, Deutsche Bank says. The firm thinks this inflection in revisions can drive the shares to outperform. It says better deliveries equal better free cash flow, and better free cash flow should drive shares higher. Deutsche is now above Street across all years of its forecast horizon that runs through 2027.
3. Arm initiated with an Overweight at Wells Fargo
Wells Fargo initiated coverage of Arm (ARM) with an Overweight rating and $70 price target. Arm has been the leading innovator in RISC-based compute since its founding and can continue the momentum well into the future by taking compute share, the firm tells investors in a research note.
4. Zillow Group initiated with a Buy at Deutsche Bank
Deutsche Bank initiated coverage of Zillow Group (ZG) with a Buy rating and $50 price target. The firm sees Zillow as the market leading platform for beginning a home buying journey with over twice the website traffic of Realtor.com and over twice the daily app users of Redfin. The company's broad reach combined with efforts to improve conversions indicate Zillow can grow its current share of customer transactions from 3% in 2021 to close to 6% by 2025, Deutsche tells investors in a research note. The firm says Zillow is executing on its growth initiatives across its premier agent, seller solutions, and mortgage businesses.
5. Lam Research initiated with a Buy at Redburn Atlantic
Redburn Atlantic initiated coverage of Lam Research (LRCX) with a Buy rating and $800 price target. Lam has "powerful" market positions in two key etch processes, namely conductor and dielectric, the firm tells investors in a research note. Redburn Atlantic says both will benefit from increasing process steps as chipmaking adopts the vertical scaling of GAA and BSPN.
Top 5 Sell Calls:
1. Williams Trading downgrades Foot Locker to Sell ahead of Q3 report
Williams Trading downgraded Foot Locker (FL) to Sell from Hold with a price target of $15, down from $16, ahead of the Q3 report. The firm believes the loss of marquee product allocations from Nike (NKE) will drive an earnings miss and full-year guidance cut. As a result of losing majority allocation for Jordan Retro, Air Force 1 and Nike Dunk styles, Foot Locker will be forced to take more inventory risk, Williams tells investors in a research note. The firm says Foot Locker's issues are evident on its U.S. website, where 38% of men's footwear and 40% of women's footwear are on sale.
2. Virgin Galactic downgraded to Underweight at Morgan Stanley
Morgan Stanley downgraded Virgin Galactic (SPCE) to Underweight from Equal Weight with a price target of $1.75, down from $4. The company is pausing revenue-generating space flights as it conserves cash and redoubles efforts on Delta, the firm tells investors in a research note. Morgan Stanley likes Virgin Galactic's long-term potential, but sees limited opportunities for share price accretion during this upcoming lull period. With no planned revenue-generating flights from mid-2024 to 2026, the firm sees a "catalyst-lull period on the horizon."
3. Chegg downgraded to Underweight at Morgan Stanley
Morgan Stanley downgraded Chegg (CHGG) to Underweight from Equal Weight with a price target of $9, down from $10. The firm says weaker third party data trends and an "aggressive" implied Q4 subscriber addition outlook create a tough near-term setup for a stock that is up over 40% from the October lows. Longer term, challenges from generative artificial intelligence competition create a smaller opportunity for Chegg, likely leading to negative consensus estimate revisions in 2024 and 2025, Morgan Stanley tells investors in a research note.
4. Markel initiated with a Sell at Citi
Citi initiated coverage of Markel (MKL) with a Sell rating and $1,275 price target. The firm says the reinsurance group is its second favorite insurance sub-sector along with personal lines, behind brokers, though it acknowledges "crowding risk." Citi's Sell rating on Markel is based on its view that the company's mix that is overweight professional lines will remain less attractive than peers, continuing to slow sales and margin momentum. The firm also sees Markel's property catastrophe reinsurance exit as a potential headwind in reinsurance casualty.
5. SSR Mining double downgraded to Underperform at BofA
BofA double downgraded SSR Mining (SSRM) to Underperform from Buy with a price target of $12.50, down from $17. The firm's revised price target implies "just" 7% upside potential, which is "well-below" most Buy and Neutral rated gold producer peers. Longer-term, BofA expects rising production and lower costs, but in the near to medium-term, SSR should be in a period of re-investment, during which the firm expects relative underperformance versus peers.
Nike
-0.17 (-0.16%)
Baidu
+4.42 (+3.68%)
Lam Research
+0.76 (+0.11%)
Zillow Group
+0.59 (+1.54%)
Zillow
+0.605 (+1.52%)
Boeing
+1.03 (+0.47%)
Arm
+1.16 (+1.88%)
Foot Locker
+0.48 (+2.13%)
Virgin Galactic
+0.06 (+3.02%)
Markel
+21.14 (+1.48%)
SSR Mining
+0.115 (+1.02%)
Chegg
-0.195 (-1.89%)