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 August 7-11.

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

Top 5 Buy Calls:

1. DraftKings upgraded to Overweight from Equal Weight at Wells Fargo

Wells Fargo upgraded DraftKings (DKNG) to Overweight from Equal Weight with a price target of $37, up from $28. The company’s earnings report showed that it is capturing market share, capitalizing on an improved product, and limiting operating expense growth, the firm tells investors in a research note. Wells sees upward EBITDA revisions to come and a path to $1B adjusted EBITDA in 2025 for DraftKings.

Truist also upgraded DraftKings to Buy from Hold with a price target of $44, up from $31. The firm cites the company’s inflection to profitability in Q2 as the management navigated around numerous early threats, and the path to “significant and sustainable” profitability has become clearer. DraftKings may be the “best top-line story in gaming today”, even though the sector has been constrained by macro concerns, Truist adds.

2. Eli Lilly upgraded to Buy from Hold at Jefferies

Jefferies upgraded Eli Lilly (LLY) to Buy from Hold with $615 price target, up from $408 prior. The firm cited the two recent positive GLP-1 data points, with SELECT trial exceeding the firm’s base case and its Mounjaro sales exceeding consensus estimates by 28%. Jefferies is also boosting its Mounjaro peak sales view to $70B and its orforglipon view to $8.5B.

3. Redburn more bullish on United Airlines, upgrades to Buy

Redburn upgraded United Airlines (UAL) to Buy from Neutral with an $80 price target, citing its preference for international airlines and a more positive view on the impact of fewer narrow-body deliveries on both capex and growth over the coming years for the upgrade. Growing domestic capacity should continue to pressure unit revenue, the firm tells investors in a research note. Against this backdrop, Redburn reassessed its view on the U.S. airlines.

4. Monster Beverage upgraded to Overweight at Piper Sandler

Piper Sandler upgraded Monster Beverage (MNST) to Overweight from Neutral with a price target of $63, up from $60. The share pullback makes Monster’s risk/reward more attractive, the firm tells investors in a research note. While the company’s Q2 results were below expectations, there is nothing concerning about the business or its near- and long-term momentum, contends Piper. It remains bullish on the energy drink category specifically, especially with no private label presence, and expects Monster to continue to be well positioned.

5. UBS upgrades Wayfair to Buy, raises price target to $110

UBS upgraded Wayfair (W) to Buy from Neutral with a price target of $110, up from $72. The company’s low valuation multiple does not fully price in its “favorable intermediate term set-up,” UBS tells investors in a research note. While sentiment on Wayfair shares has improved lately, the market will be surprised by the degree of profit upside the company is likely to generate in the coming periods, says the firm. It says the online retailer is “just on the cusp” of entering a multi-quarter period of sales growth and profit acceleration.

Top 5 Sell Calls:

1. Cloudflare downgraded to Sell at Guggenheim

Guggenheim downgraded Cloudflare (NET) to Sell from Neutral with a $50 price target. The firm sees execution risk at Cloudflare and believes the stock “has gotten way ahead of itself.” There is risk in near, mid, and long-term estimates, and execution risk tied to the company’s “worthwhile, but aspirational goals,” Guggenheimer tells investors in a research note. The firm says Cloudflare’s “modest” Q2 beat will not likely carry over to the second half, where a “steep hill” of new annual recurring revenue “needs to be climbed just to meet expectations.”

2. JPMorgan downgrades Westlake to Underweight, raises target to $123

JPMorgan downgraded Westlake (WLK) to Underweight from Neutral with a price target of $123, up from $120. Westlake shares have outperformed the other deeper cyclical petrochemical companies since June, but Westlake does not offer the high free cash flow yield and large share repurchase capabilities of Olin nor does it offer the high 5%-plus dividend yields of Dow and Lyondell, the analyst tells investors in a research note. The firm expects Westlake’s business conditions to continue to soften into the second half of 2023.

3. BofA starts Labcorp spinoff Fortrea with an Underperform

BofA initiated coverage of Fortrea Holdings (FTRE) with an Underperform rating and $27 price target following its spinoff from Labcorp (LH) last month. The late-stage contract research organization, or CRO, is better as a standalone entity, but has underperformed peers historically and the firm doesn’t see this changing quickly, BofA tells investors. A discount to peers is “warranted at this time,” the firm added.

4. JPMorgan bearish on Atea Pharmaceuticals, downgrades to Underweight

JPMorgan downgraded Atea Pharmaceuticals (AVIR) to Underweight from Neutral without a price target. The firm says that despite reiterating on track clinical timelines for bemnifosbuvir, it remains skeptical of the value accretive potential of the product candidate in either indication. JPMorgan currently approved antivirals continuing to dominate a shrinking market opportunity as severe COVID case rates dwindle. The firm anticipates Atea shares continuing to be under pressure and underperforming.

5. Piper downgrades Eagle Pharmaceuticals to Underweight on long-term concerns

Piper Sandler downgraded Eagle Pharmaceuticals (EGRX) to Underweight from Neutral with a price target of $17, down from $26, following the company’s Q2 report. Though the company having raised its FY20 adjusted EBITDA and EPS guidance “is not lost on us,” the firm says it “continues to struggle” with the longer-term EBITDA trajectory given what it views as “challenging dynamics on multiple fronts,” including declining contribution from bendamustine products and sluggish uptake of new products Barhemsys and Byfavo.