Buy/Sell: Wall Street’s top 10 stock calls this week

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 July 31-August 4.

Find all top-rated stocks by the best-rated analysts on TipRanks.

Top 5 Buy Calls:

1. AMD upgraded to Buy from Neutral at Citi

Citi upgraded AMD (AMD) to Buy from Neutral with a price target of $136, up from $120. The company reported “good” Q2 results and bad news of trimmed guidance “ain’t that bad,” Citi tells investors in a research note. The firm thought AMD’s artificial intelligence products would remain margin dilutive and investors would eventually care about the stock’s “expensive valuation.” However, the firm admits to being “wrong on both counts.” As such, Citi upgraded AMD to buy post the results.

2. Pinterest upgraded to Buy on “enticing progress” at Rosenblatt

Rosenblatt upgraded Pinterest (PINS) to Buy from Neutral with a price target of $35, up from $27, post the Q2 results. In a “choppy” advertising market “with cost-pressures galore,” Pinterest is making “enticing progress,” Rosenblatt tells investors in a research note. The firm says the company is laying a foundation for revenue acceleration, margin expansion and rising relevancy that can bolster the shares.

3. Adobe upgraded to Overweight from Equal Weight at Morgan Stanley

Morgan Stanley analyst Keith Weiss upgraded Adobe (ADBE) to Overweight from Equal Weight with a price target of $660, up from $510. The firm says greater clarity on the company’s artificial intelligence-enabled products and the monetization road map increase the firm’s confidence in reaccelerating the Creative Cloud organic growth engine. A return to mid/high-teens earnings growth over the next three years warrants upside to Adobe’s multiple, Morgan Stanley tells investors in a research note.

4. Wells double upgrades Wayfair with $100 target on “real” progress

Wells Fargo double upgraded Wayfair (W) to Overweight from Underweight with a price target of $100, up from $35, following the Q2 beat. The company’s sales and EBITDA progress “is real,” says the firm, which notes Wayfair’s multi-year upward revision cycle is “just beginning.” Wells adds that it is time to re-recognize Wayfair as a “high growth, share-taking asset with real profit levers and upside catalysts ahead.” Near-term channel checks suggest more upside while the fiscal 2024 consensus estimates screen conservative, the firm contends.

5. Match Group upgraded to Buy from Neutral at BTIG

BTIG upgraded Match Group (MTCH) to Buy from Neutral with a $60 price target following the Q2 beat. The Tinder net addition outlook is improving, the company’s growth is accelerating and estimates are moving higher, BTIG tells investors in a research note. The firm adds that with Tinder opting not to go ahead with international price increases and showing an improving daily new users/reactivation trend, the net add outlook is improving, which has been a drag on sentiment. It believes Match’s “new team looks to be on the right track.”

Top 5 Sell Calls:

1. Southwest downgraded to Underperform at Jefferies on limited margin visibility

Jefferies downgraded Southwest (LUV) to Underperform from Hold with a price target of $25, down from $40. A worse cost outlook, Southwest’s decelerating revenues per available seat mile, or RASM, and a fleet refresh cycle that forces capacity into oversupplied markets give the company limited visibility to margin expansion in 2024 despite its optimization plan, the firm tells investors.

2. SoFi downgraded to Underperform from Market Perform at Keefe Bruyette

Keefe Bruyette downgraded SoFi Technologies (SOFI) to Underperform from Market Perform with a price target of $7.50, up from $5.50. After rallying 142% since the mid-May trough, the company’s valuation “has overshot the fundamental earnings outlook,” Keefe tells investors in a research note. The firm says SoFi’s profitability “will be modest at best” in 2024, with growth rates likely to moderate as capital consumption has to slow. Ultimately, the upside/downside analysis at the current price seems negatively biased, contends Keefe.

3. Carvana downgraded to Underperform from Hold at Jefferies

Jefferies downgraded Carvana (CVNA) to Underperform from Hold with a price target of $30, down from $55. Consensus estimates appear to overestimate the sustainability of the company’s recently elevated profitability, which has benefited from transitory tailwinds that will abate in the coming quarters, Jefferies tells investors in a research note. The firm says estimate downside could resurface concerns about the viability of Carvana’s business model. It says “transitory tailwinds” are inflating the company’s near-term profitability and pushing estimates too high. Carvana’s new capital structure still requires a material improvement in unit economics, contends Jefferies.

4. Cambium Networks downgraded to Underweight at JPMorgan

JPMorgan downgraded Cambium Networks (CMBM) to Underweight from Neutral with a price target of $12, down from $17, post the Q2 results. The company reported “another hiccup” in getting back to a normalized growth backdrop as it is now seeing enterprise channel headwinds, the firm tells investors in a research note. JPMorgan believes investor patience with the shares “is going to be limited” given the combination of the company’s inconsistent track record, limited scale driving high variability on earnings, and low visibility given its high reliance on the channel.

5. Compass Point downgrades TriplePoint to Sell on “collapsed” NAV

Compass Point downgraded TriplePoint Venture Growth BDC (TPVG) to Sell from Neutral with a price target of $9.75, down from $10.50. The net asset value performance of TriplePoint has “collapsed” due to multiple credit issues over the last two years, Compass Point tells investors in a research note. The firm sees the possibility of additional NAV declines before the venture capital cycle turns more favorable. The company is “saddled with a very high” leverage ratio, which reduces its flexibility to support portfolio companies and manage credit issues that exist in the portfolio, contends Compass.