Airbnb downgraded, Citi 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:

• Piper Sandler upgraded Citi (C) to Overweight from Neutral with a price target of $63, up from $56. The firm believes Citigroup’s unique story remains intact.
• Morgan Stanley upgraded Cadence Design (CDNS) to Overweight from Equal Weight with a price target of $350, up from $260. Weak Q1 guidance is offset by strength signaled into the rest of FY24, says the firm, which expects momentum in chip design will continue into next year at least and expects investors to focus on momentum into 2024-2025.
• BofA upgraded SentinelOne (S) to Buy from Neutral with a price target of $35, up from $26.50. Though competition remains intense, the firm cites the near-term path to profitability and free cash flow, reaccelerating net new annual recurring revenue growth and improving market conditions for its more positive view.
• HSBC upgraded HP Inc. (HPQ) to Buy from Hold with a price target of $33, up from $30. The firm says global PC shipments are recovering, while the PC refresh cycle, end of life of Windows 10, and adoption of artificial intelligence PCs offer tailwinds for HP.
• JPMorgan upgraded Bruker (BRKR) to Overweight from Neutral with a price target of $90, up from $60, after the company reported a “sizeable” Q4 beat and gave “strong,” better-than-expected 2024 guidance.

Top 5 Downgrades:

• DA Davidson downgraded Airbnb (ABNB) to Neutral from Buy with an unchanged price target of $145. While Airbnb’s Q4 results were “solid,” with “decent” upside versus expectations on both the topline and adjusted EBITDA, management’s outlook commentary for Q1 and calendar 2024 suggests that this year may reflect a more normalized room night growth environment, the firm tells investors.
• Loop Capital downgraded Ulta Beauty (ULTA) to Hold from Buy with an unchanged $530 price target. The rating change reflects the current valuation levels as opposed to a more bearish view of the company’s fundamentals as the stock has gained 25% since June 2023 vs. the 14% rise in the S&P 500, the firm says.
• HSBC downgraded Twilio (TWLO) to Reduce from Hold with a price target of $61, down from $62. Twilio is trading at a large premium to similar “low-growth” companies in the sector on non-GAAP valuation metrics, the firm says.
• JPMorgan downgraded QuidelOrtho (QDEL) to Underweight from Neutral with a price target of $37, down from $66. The company reported a “substantial” Q4 margin and earnings miss, while initiating disappointing 2024 guidance that calls for adjusted earnings 46% below the Street at the midpoint, the firm tells investors in a research note. Craig-Hallum and William Blair also downgraded QuidelOrtho to Neutral-equivalent ratings.
• JPMorgan downgraded Ecolab (ECL) to Neutral from Overweight with a price target of $220, up from $200. The shares are 49% higher over the past year and the company’s consolidated volume performance in 2023 was roughly flat and is likely to be roughly flat to higher in 2024, the firm notes.

Top 5 Initiations:

• Bernstein initiated coverage of Wingstop (WING) with an Outperform rating and $340 price target. The firm believes Wingstop is a “category of one” concept in the fastest growing segment of the restaurant industry with a potential to be “the next Domino’s.”
• Piper Sandler initiated coverage of Steven Madden (SHOO) with a Neutral rating and $45 price target. Steven Madden is a “strong operator with a trusted management team,” but the stock’s valuation and potential cost headwinds warrant a Neutral view, the firm says.
• Morgan Stanley resumed coverage of TKO Group (TKO) with an Equal Weight rating and $95 price target. The firm sees limited upside to consensus estimates and views the stock’s valuation as fair relative to TKO’s growth and history.
• RBC Capital initiated coverage of SolarEdge (SEDG) with a Sector Perform rating and $85 price target. Though the firm believes that current valuation multiples have troughed and 2024-2025 expectations are largely derisked, it awaits proof points of a margin recovery.
• RBC Capital initiated coverage of First Solar (FSLR) with an Outperform rating and $195 price target. As the global leader in thin film CdTe technology and the largest supplier and domestic manufacturer of solar modules in the U.S., the company has a demonstrated history of being able to grow production, reduce costs, and improve performance, says the firm, which believes the strong visibility for earnings growth and free cash flow generation are “underappreciated.” RBC also started coverage of Enphase Energy (ENPH) with an Outperform rating and $140 price target.