Airbnb upgraded, Southwest downgraded: 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:

• Wedbush upgraded Airbnb (ABNB) to Outperform from Neutral with a price target of $165, up from $160. The stock is down 8.5% since the company reported Q1 earnings on May 8 and investors should take advantage of this period of relative weakness, the firm tells investors in a research note.
• Truist upgraded Deckers Outdoor (DECK) to Buy from Hold with a price target of $1,200, up from $1,011. While noting that Hoka’s DTC trends did decelerate in Q4 as the firm had previewed, Truist also notes that a very significant acceleration of wholesale sell-in activities was a key driver and argues that the brand’s current trends, momentum and the outlook for the brand across channels and regions “appear very bullish.”
• Truist upgraded On Holding (ONON) to Buy from Hold with a price target of $46, up from $34. The company’s trends have remained robust despite some broader discretionary pressure, and On’s momentum continues to build and it is positioned well to gain share as Nike (NKE) is “pulling back on fan-favorites” as part of its franchise lifecycle management strategy.
• JMP Securities upgraded Duolingo (DUOL) to Outperform from Market Perform with a $260 price target. The firm sees “multiple catalysts” that can sustain the company’s growth and notes the shares are now trading for 19.9-times JMP’s 2026 “Blue Sky” free cash flow.
• Citi upgraded DuPont (DD) to Buy from Neutral with a price target of $95, up from $85, following its plan to separate into three distinct, publicly traded companies. Feedback from investors on the news has been positive, as the flexibility of operating as standalone businesses should create value through focused growth and portfolio clarity, the firm tells investors in a research note.

Top 5 Downgrades:

• Argus downgraded Southwest (LUV) to Hold from Buy. The firm cites the company’s high employee costs and delayed aircraft deliveries that make the road to recovery for Southwest “longer than anticipated.”
• Rosenblatt downgraded Zscaler (ZS) to Neutral from Buy with a $190 price target ahead of the fiscal Q3 report on May 30. The firm says sales attrition is weighing on the company’s Q4 and fiscal 2025 prospects. Wells Fargo also downgraded Zscaler to Equal Weight from Overweight with a price target of $182, down from $275.
• RBC Capital downgraded Sarepta (SRPT) to Sector Perform from Outperform with a price target of $142, down from $157, ahead of the June 2 Elevidys FDA action date. The firm still expects significant share upside on the broadest label with $2.6B peak annual U.S. sales potential, but with the shares having appreciated 50% in the last six months, many investors appear to already expect label expansion and regulatory flexibility.
• Raymond James downgraded Frontier Group (ULCC) to Market Perform from Outperform with no price target. While the firm sees valuation support, it is increasingly concerned about potential near-term earnings downside risk and mixed results so far in the company’s ability to improve operational performance.
• TD Cowen downgraded Triumph Group (TGI) to Hold from Buy with a price target of $14, down from $19.50, citing moderated cash flow due to pared Boeing (BA) 737 and 787 ramp plans and expected lower military results.

Top 5 Initiations:

• Citi resumed coverage of Kenvue (KVUE) with a Neutral rating and $21 price target following the completion of a secondary offering on May 14. The firm sees an “unclear” near-term outlook for the company, driven by difficult Q2 comparisons, a slow start to the allergy season, Neutrogena struggling to recover share, and uncertainty on its China recovery.
• Deutsche Bank resumed coverage of Aon plc (AON) with a Hold rating and $311 price target. The firm believes 2024 will be a transition year for the company, as it integrates NFP, a business characterized by higher growth but lower margins, and accelerates its restructuring efforts.
• Mizuho initiated coverage of Medpace (MEDP) with a Buy rating and $435 price target. The firm believes Medpace is an attractive investment opportunity given its industry-leading organic growth profile, expertise in serving small- to mid-size biotechnology companies, and solid balance sheet and cash flow which provide financial flexibility.
• Stifel initiated coverage of Viking Holdings (VIK) with a Buy rating and $37 price target. Viking “is the ultimate growth story” within the luxury travel cruise segment as it will grow EBITDA, on average, around 17% for the next three years, the firm tells investors in a research note. UBS, BofA and Wells Fargo also initiated the name with Buy-equivalent ratings, while Morgan Stanley and Redburn Atlantic started coverage of Viking with Neutral-equivalent ratings.
• Deutsche Bank initiated coverage of Ares Management (ARES) with a Buy rating and $176 price target. The firm views Ares as well-positioned to capitalize on long-term secular trends that are driving growth in the alternative asset management sector and believes Ares can grow fee-related earnings, or FRE, at a 22.4% compound annual growth rate from 2023-2026.