Alphabet downgraded, Gap 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:

• Wells Fargo upgraded Gap (GPS) to Overweight from Equal Weight with a price target of $16, up from $11. The setup for Gap “has become compelling” with right-sized inventory, improved cost controls and new management “set to inflect the narrative” and drive material upside to Street estimates, the firm tells investors in a research note.
• UBS upgraded Chewy (CHWY) to Neutral from Sell with a price target of $20, down from $25. The firm believes the stock now largely reflects the company’s potential near-term challenges.
• Wells Fargo upgraded Veeva (VEEV) to Overweight from Equal Weight with a price target of $229, up from $211. The firm sees a path to double-digit revenue growth returning for Commercial Cloud and expects Veeva to fully defend its CRM turf with its top 25 pharma clients.
• BMO Capital upgraded Progressive (PGR) to Outperform from Market Perform with a price target of $180, up from $155. The company’s “pivot back to offensive growth” during a time when many of its peers continue to “heal” is highly likely in the coming months, aided by double-digit auto inflationary pressures decelerating off all-time highs, the firm tells investors in a research note.
• Citi upgraded American Express (AXP) to Neutral from Sell with a price target of $154, up from $143. Shares pulled back recently, “putting less downside risk on the shares,” the firm tells investors.

Top 5 Downgrades:

• Monness Crespi downgraded Alphabet (GOOGL) to Neutral from Buy with no price target after the company reported “disappointing” Q3 operating profits and “hosted an opaque call.”
• Citi downgraded Etsy (ETSY) to Neutral from Buy with a price target of $67, down from $114. The firm believes there is limited visibility into the company’s 2024 gross merchandise sales growth.
• Evercore ISI downgraded TransUnion (TRU) to In Line from Outperform with a price target of $52, down from $95, citing what the firm sees as a “rapidly deteriorating earnings outlook,” tied to a weakening U.S. and U.K. consumer credit backdrop.
• TD Cowen downgraded EVgo (EVGO) to Market Perform from Outperform with a price target of $4, down from $6. The firm cites slower than expected DC fast charging installations, a softer commercial fleet throughput outlook as businesses rethink their capital projects, capital requirements, and intensified competition from Tesla (TSLA) for the downgrade.
• Stephens downgraded BellRing Brands (BRBR) to Equal Weight from Overweight with a price target of $47, up from $45. BellRing has been one of the best performing names across the staples universe in 2023, but the firm believes the strong performance of shares year-to-date, coupled with current valuation, creates a balanced risk reward setup for shares.

Top 5 Initiations:

• Needham initiated coverage of Palo Alto Networks (PANW) with a Buy rating and $305 price target. The firm says Palo Alto has transformed itself into a stalwart in cybersecurity as the leader in network firewalls with greater than 25% and growing market share.
• Needham initiated coverage of Fortinet (FTNT) with a Hold rating and no price target. While the company has executed “superbly” over the last few years, its Q2 results and the Q3 outlook disappointed, raising questions around growth durability, the firm tells investors in a research note.
• Needham initiated coverage of Check Point (CHKP) with a Hold rating. The company’s underinvestment in both product and go-to-market has hindered growth and led to share losses over the last decade, and while the firm commends its recent reinvestment efforts, Check Point is facing a hurdle for halting share loss and reaccelerating growth amid declining mind-share in channel checks and intensifying competition as it expands into adjacencies, the firm tells investors in a research note.
• FBN Securities initiated coverage of Samsara (IOT) with an Outperform rating and $30 price target. Samsara, which FBN calls “the Internet of Things and Connected Cloud Leader,” has several over 30% year-over-year growth segments, has posted “impressive” ARR growth with larger customers that account for half of total ARR and has shown “impressive” operating leverage.
• Benchmark initiated coverage of Tower Semiconductor (TSEM) with a Buy rating and $35 price target. Tower is “a unique, undervalued, high-growth, high-cash-flow, lesser-known, specialty semiconductor outsource manufacturing story,” says the firm, who highlights the company’s participation in some of the fastest growing themes of the technology industry.