Roblox upgraded, Qualcomm initiated: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly.

Top 5 Upgrades:

• JPMorgan upgraded Roblox (RBLX) to Overweight from Neutral with a price target of $48, up from $41. The firm notes investors remain skeptical around Roblox’s execution and third-party data has been mixed in recent months, presenting a compelling entry point for a company growing bookings 20%, exiting a heavy investment cycle, and ramping two new revenue streams in advertising commerce in the second half of 2024.
• Evercore ISI upgraded First Solar (FSLR) to Outperform from In Line with an unchanged price target of $227. The market is expecting the Biden administration to remove a trade exemption for bifacial solar modules imported to the U.S., which now represent about 98% of U.S. solar imports, the firm noted.
• Wells Fargo upgraded Datadog (DDOG) to Overweight from Equal Weight with a price target of $150, up from $130. With the company’s cloud cost optimization coming to an end, Datadog “has many ways” to drive upside in fiscal 2024, including vendor consolation, security cross-sell and generative artificial intelligence.
• Truist upgraded Penn Entertainment (PENN) to Buy from Hold with an unchanged price target of $23. Penn expectations are too low, and the market is not only “too bearish” on ESPN Bet but is also assuming no value for the company’s other profitable interactive businesses, the firm tells investors in a research note.
• Roth MKM upgraded Albertsons (ACI) to Buy from Neutral with a $24 price target. With a new divestiture package, C&S viability as a competitor is improved, says the firm, which is raising its deal probability estimate to 50% from 20%.

Top 5 Downgrades:

• JPMorgan downgraded Five Below (FIVE) to Neutral from Overweight with a price target of $170, down from $215. Over the past eight consecutive quarters, Five Below’s comp ticket has declined year-over-year, as consumers continue to manage to a defined budget, the firm tells investors in a research note.
• Wolfe Research downgraded Warner Bros. Discovery (WBD) to Underperform from Peer Perform with a $7 price target. The firm says that with 80% of its EBITDA from linear TV and merger synergies done, it fears the company’s EBITDA peaked in 2023.
• Evercore ISI downgraded SunPower (SPWR) to In Line from Outperform with an unchanged price target of $6. The firm cites persistent high interest rates, continued weakness in California after NEM 3.0, and the possibility of further capital needs following a second tranche of $50M of additional capital announced in their latest earnings call.
• KeyBanc downgraded Sunnova Energy (NOVA) to Sector Weight from Overweight “despite an undemanding valuation” as part of a broader research note on Alternative Energy. The firm sees a challenging set-up heading into Q1 results as it takes a cautious stance on residential solar-levered names.
• Barclays downgraded Addus HomeCare (ADUS) to Underweight from Equal Weight with a price target of $83, down from $88. The firm views the final rule announced by the Department of Health and Human Services as “materially negative” for Addus.

Top 5 Initiations:

• Benchmark initiated coverage of Qualcomm (QCOM) with a Buy rating and $200 price target. As a “wireless industry leader,” the firm believes Qualcomm is “particularly well positioned to capitalize” on the industry’s trends of shifting AI computational inferencing workloads to the very edges of the network.
• Cantor Fitzgerald initiated coverage of Incyte (INCY) with a Neutral rating and no price target. While the firm views shares as “inexpensive,” it expresses a “lukewarm view on prospects for the company’s pipeline” and thinks Incyte should pursue a course of action that includes a major stock buyback and further R&D prioritization in advance of key pipeline readouts in 2025 and 2026.
• Loop Capital initiated coverage of MongoDB (MDB) with a Buy rating and $415 price target. Industry checks are indicating the pace of new cloud deployments has been improving since the beginning of the year, says the firm, which expects MongoDB’s growth to accelerate in the second half of the year as these new deployments start to ramp.
• Truist initiated coverage of Insmed (INSM) with a Buy rating and $48 price target. The firm’s due diligence and work with key opinion leaders gives it confidence in Phase 3 data set for Q2 for a chronic lung disease with limited options; potential label expansion of their first commercial drug for a bacterial lung infection in 2025; and Phase 2 release of data for two rare lung diseases expected in 2024-2025.
• Rosenblatt initiated coverage of Nice (NICE) with a Buy rating and $285 price target. The firm believes Nice is well positioned across the large and mid-sized enterprise market to take share from legacy players due to an increase in demand for AI and automation in the contact center and views the company’s cloud business as a 20%-plus year-over-year grower over the mid-term.