Baidu upgraded, Foot Locker 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:

• Nomura upgraded Baidu (BIDU) to Buy from Neutral with a price target of $145, up from $135. The “cheap valuation” following the stock’s 30% decline since the July peak plus the company’s resolution to buy back shares aggressively from now “seem to warrant the benefit of doubt” about its artificial intelligence initiative, the firm tells investors in a research note.
• JPMorgan upgraded Clorox (CLX) to Neutral from Underweight with a price target of $145, up from $124. The firm now thinks there is a significant upside risk to consensus estimates post earnings rebase last quarter as it is seeing improvement in tracked channel demand.
• RBC Capital upgraded GoDaddy (GDDY) to Outperform from Sector Perform with a price target of $124, up from $90. The firm likes the company’s “structurally hedged” customer acquisition model and has rising confidence in margin expansion coming out of RBC’s conference.
• Redburn Atlantic upgraded Applied Materials (AMAT) to Buy from Neutral with a $175 price target. The firm has turned positive on the semiconductor sector ahead of the last consensus earnings cuts expected in Q1 of 2024.
• Wells Fargo upgraded Southwestern Energy (SWN) to Equal Weight from Underweight with a price target of $6.90, up from $6.30. The firm cites improving free cash flow outlook and the increasing likelihood of potential M&A for the upgrade.

Top 5 Downgrades:

• Williams Trading downgraded Foot Locker (FL) to Sell from Hold with a price target of $15, down from $16, ahead of the Q3 report. The firm believes the loss of marquee product allocations from Nike (NKE) will drive an earnings miss and full-year guidance cut.
• Piper Sandler downgraded Autodesk (ADSK) to Neutral from Overweight with a price target of $215, down from $240. The firm says that based on fiscal 2025 growth expectations of 9% and tempered margin expectations, the outlook is “substantially less optimistic.”
• Morgan Stanley downgraded Virgin Galactic (SPCE) to Underweight from Equal Weight with a price target of $1.75, down from $4. The firm likes Virgin Galactic’s long term potential, but sees limited opportunities for share price accretion during an upcoming lull period.
• JPMorgan downgraded Reynolds Consumer Products (REYN) to Neutral from Overweight with a price target of $28, down from $29. Demand for the categories Reynolds competes in is softening faster than anticipated, the firm tells investors in a research note.
• Raymond James downgraded Jacobs Solutions (J) to Market Perform from Outperform without a price target. The firm sees increased execution risk with the Reverse Morris Trust spin and a longer road to create shareholder value for existing shareholders leading to a range-bound stock over the next several quarters.

Top 5 Initiations:

• Redburn Atlantic initiated coverage of Lam Research (LRCX) with a Buy rating and $800 price target. Lam has “powerful” market positions in two key etch processes, namely conductor and dielectric, both of which the firm believes will benefit from increasing process steps as chipmaking adopts the vertical scaling of GAA and BSPN.
• Cantor Fitzgerald initiated coverage of GitLab (GTLB) with an Overweight rating and $55 price target. The firm believes GitLab’s strength in source code management and continuous integration/deployment sets up as a solid foundation to capture the adjacent areas in DevSecOps.
• Redburn Atlantic initiated coverage of KLA Corp. (KLAC) with a Neutral rating and $550 price target. KLA offers a stable growth trajectory but the company’s attributes are well understood by investors, the firm notes.
• BMO Capital initiated coverage of Saia (SAIA) with a Market Perform rating and $450 price target. The firm cites a muted macro-outlook and valuation that is at the high end of the historical range.
• UBS initiated coverage of TD Synnex (SNX) with a Neutral rating and $105 price target. Given near-term macro pressure and a lack of catalysts to drive a multiple re-rating, UBS looks for a better entry point into TD Synnex shares.