Buy/Sell: Wall Street’s top 10 stock calls this week

What has Wall Street been buzzing about this week? Here are the top 5 Bu-y calls and the top 5 Sell calls made by Wall Street’s best analysts during the week of May 6-10.

Find all top-rated stocks by the best-rated analysts on TipRanks.

Top 5 Buy Calls:

1. Micron upgraded to Outperform at Baird

Baird upgraded Micron (MU) to Outperform Technology from Neutral with a price target of $150, up from $115. The firm also added the shares to its list of top semiconductor ideas. Baird sees “meaningful upside opportunities ahead” for Micron. The stock’s recent pullback is in discrepancy with incrementally positive trends unfolding in DRAM per Baird’s recent channel checks, “yielding to a somewhat unprecedented outlook for memory over the next 12-18 months,” the firm tells investors in a research note. Baird says DRAM pricing is stronger than previously expected with increasing mix of premium-priced DDR5, while HBM3E has the potential to generate 60%-plus gross margin for Micron next year.

2. Target upgraded to Buy at Citi

Citi upgraded Target (TGT) to Buy from Neutral with an unchanged price target of $180. The firm believes Target has emerged as “one of the winners within the retail landscape” with an opportunity to improve EBIT margin in the years to come. Following a “choppy” 2022 and 2023, the company is “on the right track” with inventory well-controlled, easier sales comparisons beginning in Q2 and conservative guidance, Citi tells investors in a research note. The firm believes the market may have reacted too negatively to some retailers amid a recently more uncertain consumer environment, and is attracted to retailers “that have mindshare for value and idiosyncratic opportunities to improve margins.” It says Target checks both boxes.

3. Shopify upgraded to Outperform at JMP Securities

JMP Securities upgraded Shopify (SHOP) to Outperform from Market Perform with an $80 price target. The company reported solid Q1 results with revenue and operating income above consensus, but it expects gross profit margins to fall in Q1 while it is investing more in marketing, the firm tells investors in a research note. JMP says the upgrade is driven by the potential for new merchant cohorts to contribute in 2025 and beyond, Plus subscription price increases coming on in the second half of 2024, and a belief that Shopify remains a “best-in-class” e-commerce platform that is taking share and has multiple adjacencies across financial services, advertising, and merchant services.

4. Block upgraded to Buy at Phillip Securities

Phillip Securities upgraded Block (SQ) to Buy from Accumulate with a price target of $96, up from $94. The firm cites the recent share weakness for the upgrade. Catalysts for Block include continued margin expansion and Cash App’s ability to serve as a traditional bank account substitute for millions of lower income and underbanked consumers, Philip Securities tells investors in a research note.

5. Affirm upgraded to Overweight at JPMorgan

JPMorgan upgraded Affirm (AFRM) to Overweight from Neutral with a price target of $43, up from $41. The stock declined more than 9% on Wednesday despite posting another headline and operating margin beat, and offering a better-than- feared fiscal Q4 gross merchandise volume outlook, “which was baffling,” the firm tells investors in a research note. JPMorgan says the stock is down 35% year-to-date, giving back most of the gains since its analyst day last November, despite reporting meaningful volume and operating margin upside in consecutive quarters, creating an attractive entry point.

Top 5 Sell Calls:

1. Barclays, Morgan Stanley downgrade Victoria’s Secret to Underweight

Barclays downgraded Victoria’s Secret (VSCO) to Underweight from Equal Weight with a price target of $14, down from $15. Promotional checks suggest elevated discounting has continued this year despite Victoria’s efforts to improve its inventory position, the firm tells investors in a research note. Barclays sees competitors like Skims and Savage X Fenty encroaching on Victoria’s Secret’s market share, noting the company’s transactions have decelerated year-to-date. It believes consensus estimates for the company could be at risk.

In addition, Morgan Stanley downgraded Victoria’s Secret to Underweight from Equal Weight with a price target of $15, down from $19. The firm, which anticipates sales and margin driven Q1 EPS downside, thinks Q1 underperformance comes with a fiscal year guidance reduction that the market isn’t fully appreciating. Morgan Stanley also fears Victoria’s historical competitive advantages, such as its structured bra expertise and store footprint, are less relevant amid category and consumer shopping changes.

2. Goldman downgrades ZoomInfo to Sell on weak renewal trends

Goldman Sachs downgraded ZoomInfo (ZI) to Sell from Neutral with a price target of $12, down from $19.50. The company’s Q1 results suggest ongoing macro challenges and execution hurdles, the firm tells investors in a research note. Goldman cites an increased lack of visibility around a growth inflection and weak renewal trends for the downgrade. A challenging spending backdrop, softer macro signals and the lack of upcoming catalysts that can support revenue re-acceleration leads to a more gradual sales re-acceleration story, the firm tells investors in a research note.

3. DoubleVerify double downgraded to Underperform at BofA

BofA double downgraded DoubleVerify (DV) to Underperform from Buy with a price target of $18, down from $45. The firm cites predominantly long positioning, difficulty justifying high long-term growth expectations and a lack of bullish catalysts. The company’s lowered calendar year 2024 guidance and its explanations are not consistent with a “predictable greater than 20% long term grower,” BofA tells investors.

4. WK Kellogg downgraded to Underperform at Exane BNP Paribas

Exane BNP Paribas downgraded WK Kellogg (KLG) to Underperform from Neutral with a $20 price target. The firm believes the company’s long-term margin potential is now fully priced into the shares and says WK Kellogg’s 2026 adjusted EBITDA margin target is a “milestone, not a destination.”

5. Teradata downgraded to Underperform at BofA

BofA downgraded Teradata (TDC) to Underperform from Neutral with a price target of $39, down from $48. The company’s execution remains mixed in the near term and the back-half of the year loaded guidance creates incremental risk, the firm tells investors in a research note. BofA says estimates revisions continue to be negative with no near-term positive catalyst for the shares.