What has Wall Street been buzzing about this week? Here are the top 5 Buy calls and the top 5 Sell calls made by Wall Street’s best analysts during the week of November 21-25, 2022.
Top 5 Buy calls:
Disney (DIS) – MoffettNathanson upgrades stock to Outperform after Iger returns
On November 21, MoffettNathanson analyst Michael Nathanson upgraded Disney to Outperform from Market Perform with a $120 price target. The analyst cites the news that Disney is bringing back former CEO Bob Iger for a two-year term for the upgrade. "We applaud Disney’s Board for the courage to make this change," Nathanson tells investors in a research note. He expects Iger to examine the investment plans at Disney+ and refocuses investment on "areas of franchise strength and away from broader general entertainment content." Disney’s multiple will likely move higher as these new changes are implemented, contends Nathanson.
Intuit (INTU) – Credit Suisse starts coverage of the stock with an Outperform, $550 price target
On November 21, Credit Suisse analyst Rich Hilliker initiated coverage of Intuit with an Outperform rating and $500 price target. The "platform of platforms" has line of sight to double-digit revenue growth and free cash flow margin for next decade given that it is in the early days of "deep cross functional integration" and leveraging its "brand bawn to unlock network flywheel and monetization," Hilliker tells investors.
Yum! Brands (YUM) – Argus upgrades the stock to Buy, sees "solid" growth pace from value menu
On November 23, Argus analyst John Staszak upgraded Yum! Brands to Buy from Hold with a $142 price target. The analyst expects consumers to opt for the company’s relatively inexpensive menu items, looking for Yum! Brands to grow at a "solid pace." Staszak further contends that the company should benefit from the eventual reopening of the Chinese economy and an acceleration in restaurant openings, as well as growth in orders placed through GrubHub, the exclusive delivery service for KFC and Taco Bell. The analyst is also boosting his full year 2023 EPS view on the stock by 10c to $5.20, forecasting the recent improvements in same-store sales to continue.
Procter & Gamble (PG) – Wolf Research starts coverage of the stock with an Outperform, $156 price target
On November 22, Wolfe Research analyst Greg Badishkanian initiated coverage of Procter & Gamble with an Outperform rating and $156 price target. Badishkanian expects demand elasticities to beat expectations as brand investments and innovation drive wallet share to P&G. The analyst views their geographic exposure and balance sheet as defensive, which should support fund flows.
Squarespace (SQSP) – Piper Sandler upgrades stock to Overweight, raises price target to $30
On November 21, Piper Sandler analyst Clarke Jeffries upgraded Squarespace to Overweight from Neutral with a price target of $30, up from $22. Squarespace stood out in Q3 as one of the few businesses this quarter with improving constant currency revenue growth and bookings growth, Jeffries tells investors in a research note. While this is partially due to pricing, it is not the majority of the growth in bookings, "which we see as very encouraging," the analyst writes.
Top 5 Sell calls:
Carvana (CVNA) – Argus cuts Carvana to Sell
On November 21, Argus analyst Taylor Conrad downgraded Carvana to Sell from Hold. The stock’s sharp decline reflects the company’s recent results and weak industry trends, the analyst tells investors in a research note. Conrad further notes that as used car prices fall, she expects Carvana to struggle to make a profit on vehicles previously purchased at high prices. The company is also "highly leveraged" with debt to capital ratio of 95%, and at its current price, the stock is "overvalued," the analyst adds.
Walgreens Boots Alliance (WBA) – New Morgan Stanley analyst assumed coverage with an Underweight rating
On November 23, Morgan Stanley analyst Erin Wright assumed coverage of Walgreens Boots Alliance with an Underweight rating with an unchanged price target of $39. While she is forecasting improved profitability in fiscal 2023, she remains concerned on macroeconomic challenges, European headwinds, and potential integration headwinds after VillageMD announced the definitive agreement to acquire Summit Health-CityMD for $8.9B in conjunction with Cigna (CI).
Blackstone (BX) – Credit Suisse downgrades stock to Underperform, lowers price target to $67.50
On November 22, Credit Suisse analyst Bill Katz downgraded Blackstone to Underperform from Neutral with a price target of $67.50, down from $85.50. While structurally bullish on the alternative asset management sector, the analyst maintains a cautious view given the mixed macro picture, normalization of trading trends and lack of near-term catalysts that could drive significant multiple expansion. Blackstone faces decelerating contribution from its retail platform, says Katz, who cut distributable earnings estimates for fiscal 2023 and 2024 and believes consensus numbers are "too high."
Dropbox (DBX) – Credit Suisse starts coverage of the stock with an Underperform, $20 price target
On November 21, Credit Suisse analyst Rich Hilliker initiated coverage of Dropbox with an Underperform rating and $20 price target. Dropbox’s investment level, efficiency, and sales productivity are falling, its ARR and ARPU are trending lower, and its net paid customer adds are gradually slowing, the analyst says. Hilliker believes product expansion, integration, go-to-market optimization, and pricing/packaging improvements "will all take time."
Extra Space Storage (EXR) – Evercore ISI downgrades the stock to Underperform, lowers price target to $150
On November 21, Evercore ISI analyst Steve Sakwa downgraded Extra Space Storage to Underperform from In Line with a price target of $150, down from $162. The analyst is making eight ratings changes, including seven downgrades and one upgrade, to reflect recent stock moves and more conservative underwriting in a few sectors, namely apartments, SFR and storage, after having attended the Fall NAREIT conference in San Francisco.
Published first on TheFly
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