Arm initiated, SQM 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:

• Jefferies upgraded Elastic (ESTC) to Buy from Hold with a price target of $100, up from $75. The company has posted “two solid quarters of execution” and its revenue is accelerating heading into fiscal 2025, the firm tells investors in a research note.
• Mizuho upgraded Hudson Pacific (HPP) to Neutral from Underperform with a price target of $7, down from $10. The firm sees a more balanced risk/reward for Hudson Pacific with several negatives, like tenant move-outs, an uncertain Studio business trajectory and financial covenant concerns balanced by potential improvement in San Francisco fundamentals progress on the actors’ strike during the next 3-6 months several actions to shore up the balance sheet.
• JPMorgan upgraded Editas Medicine (EDIT) to Neutral from Underweight with an $8 price target. The firm believes Editas’ share downside is “relatively protected at this valuation.”
• Janney Montgomery Scott upgraded FB Financial (FBK) to Buy from Neutral with a fair value estimate of $35.50, up from $34, citing improved profitability, its “demographically appealing Tennessee-based footprint” and what the firm views as “an attractive valuation.”
• BofA upgraded Dow Inc. (DOW) to Neutral from Underperform with a price target of $59, up from $55. The firm also upgraded Huntsman (HUN) to Buy from Underperform and LyondellBasell (LYB) to Neutral from Underperform.

Top 5 Downgrades:

• Scotiabank downgraded Olink (OLK) to Sector Perform from Outperform after Thermo Fisher (TMO) announced a proposal to acquire Olink in an all-cash transaction.
• BofA downgraded Sherwin-Williams (SHW) to Underperform from Neutral with a price target of $275, down from $300.
• BofA downgraded SQM (SQM) to Underperform from Neutral with a price target of $59, down from $69, as the firm lowered its 2023 and 2024 EBITDA estimates by 17% and 43%, respectively, following 20%-50% cuts in lithium price assumptions made by the BofA commodities team for 2023-2025.
• Deutsche Bank downgraded Lithium Americas (LAC) to Hold from Buy with a price target of $7, down from $25. The firm views the shares as “richly valued” following the spinoff.
• TD Cowen downgraded Evelo Biosciences (EVLO) to Market Perform from Outperform. The firm is citing the company’s announcement that it will explore strategic alternatives and partnering opportunities for EDP1815 and its SINTAX platform following results from the Phase II study of EDP2939 in moderate psoriasis, which missed the PASI-50 primary endpoint.

Top 5 Initiations:

• KeyBanc initiated coverage of Arm (ARM) with an Overweight rating and $65 price target. The firm believes Arm will increasingly benefit from key semiconductor design trends, including rising chip complexity, as evolving compute chip architectures increasingly compensate for scaling challenges as a result of the demise of Moore’s Law.
• Jefferies initiated coverage of Pinterest (PINS) with a Hold rating and $30 price target. The firm cites the stock’s premium valuation for the Hold rating.
• TD Cowen initiated coverage of WK Kellogg (KLG) with a Market Perform rating and $11 price target. The spin from Kellanova (K) gives WK Kellogg the opportunity to regain market share in breakfast cereal and rebuild profits, but the firm is concerned that years of underinvestment may have impaired the company’s brands and hampered its ability to engineer a turnaround in a U.S. cereal category that is in structural decline.
• Redburn Atlantic initiated coverage of Nu Holdings (NU) with a Buy rating and $11 price target. The firm says the company has penetrated only 2% of a $2.7 trillion addressable market in Brazil and is “poised for growth in high-return, low-risk payroll lending over the next three years.”
• JMP Securities initiated coverage of Vigil Neuroscience (VIGL) with an Outperform rating and $23 price target. The firm says interim results from the VGL101 Phase 2 trial are anticipated in Q4 and represent the key near-term, value-driving milestone.