Tesla downgraded, Southwest upgraded: 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:

• Jefferies upgraded Southwest Airlines (LUV) to Hold from Underperform with a price target of $28, up from $20. The firm believes the recent selloff “finds a floor” for the shares.
• Baird upgraded Texas Roadhouse (TXRH) to Outperform from Neutral with a price target of $175, up from $160. The shares “still may have plenty of room to run” even when factoring in the recent strength, the firm tells investors in a research note.
• DA Davidson upgraded Nice (NICE) to Buy from Neutral with a price target of $300, up from $250. The company’s “strong” Q4 results displayed strong underlying growth dynamics and a better-than-expected profitability ramp, the firm says.
• JPMorgan upgraded Cooper Companies (COO) to Overweight from Neutral with a price target of $120, up from $100. Cooper’s trends remain robust in contact lenses, where healthy market trends, pricing power, exposure to high growth subsegments, and wins in new fits have driven growth in the high single to low double digits, consistently above the market, the firm tells investors in a research note.
• Goldman Sachs upgraded Moelis (MC) to Neutral from Sell with a price target of $58, up from $53, implying 13% total return potential. The merger and acquisition cycle is improving, and the firm believes Moelis is well positioned to benefit.

Top 5 Downgrades:

• Wells Fargo downgraded Tesla (TSLA) to Underweight from Equal Weight with a price target of $125, down from $200. The firm expects the company’s volume to disappoint as price cuts are having a diminishing impact on demand.
• Argus downgraded Humana (HUM) to Hold from Buy. The company faces headwinds to revenue and earnings growth as its profit margin is squeezed by an unanticipated spike in medical utilization among its Medicare Advantage members, and this elevated utilization observed in Q4 is likely to continue in 2024, the firm says.
• Baird downgraded FIS (FIS) to Neutral from Outperform with a price target of $78, up from $76. The firm likes the company’s “return to solid execution and beat/raise pattern,” sees the risk/reward as “pretty balanced.”
• Citi downgraded Cleveland-Cliffs (CLF) to Neutral from Buy with an unchanged price target of $22. The company’s EBITDA “has underwhelmed” relative to the strength of underlying steel markets, the firm tells investors in a research note.
• Maxim downgraded SurgePays (SURG) to Hold from Buy with no price target. The company’s Q4 results were just below consensus, but more importantly, SurgePays disclosed that the U.S. Government’s Affordable Connectivity Program, or ACP, has unexpectedly stopped taking new applications in February, creating uncertainty that the program will be re-funded when its initial $14.2B in funding runs out, firm notes.

Top 5 Initiations:

• Goldman Sachs initiated coverage of Royal Caribbean (RCL) with a Buy rating and $162 price target. The firm says Royal offers “best in class execution,” with the most exposure to incremental pricing tailwinds.
• Goldman Sachs initiated coverage of Carnival (CCL) with a Buy rating and $20 price target. The firm sees the setup for Carnival into 2024 as the most favorable, with the company providing conservative guidance despite a larger occupancy recovery to come given its higher Europe exposure.
• Goldman Sachs initiated coverage of Norwegian Cruise Line (NCLH) with a Neutral rating and $19 price target. The firm says that while Norwegian has made “strong headway” in the past year, it remains on the sidelines, believing the company’s 2024 guidance factors in relatively little conservativism. Goldman also views Norwegian’s ongoing cost efficiencies as a “show-me” story.
• Evercore ISI reinstated coverage of Campbell Soup (CPB) with an In Line rating and $49 price target, citing a sum-of-parts analysis. The firm expresses “optimism” for snacks and the acquired Sovos business, offset by lack of growth in the legacy Meals & Beverage, or M&B, business.
• Argus initiated coverage of Axon (AXON) with a Buy rating and $380 price target. The company’s shares should continue to outpace the broader market driven by its strong management team and robust earnings prospects as demand for its products and solutions remains strong, the firm says.