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 21-25.

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

Top 5 Buy Calls:

1.  Amazon assumed with an Outperform, added to ‘Best Ideas List’ at Wedbush

Amazon.com (AMZN) was assumed with an Outperform rating and $180 price target at Wedbush. The firm also added the stock to its “Best Ideas List,” citing the belief that the backdrop for Amazon is beginning to strengthen with improving or stabilizing growth across the company’s eCommerce, advertising, and web services verticals. Following a period of weak growth as eCommerce broadly slowed against challenging pandemic comps and operating margin compression due in part to lower fulfillment utilization, Amazon’s core business has been underappreciated in recent quarters, says the firm, adding that Amazon’s core business is now well positioned with an industry-leading fulfillment infrastructure.

2. Loop Capital upgrades Netflix to Buy on improving fundamentals

Loop Capital upgraded Netflix (NFLX) to Buy from Hold with a price target of $500, up from $425. The shares have corrected 15% from its recent gains, but more importantly, Netflix’s fundamentals continue to improve, the firm tells investors in a research note. Loop Capital says the company’s competition is simultaneously raising prices and reducing content spend, which should further boost Netflix’s competitive position. Netflix is the best positioned for the writers and actors strike based on its larger pipeline of unreleased content and global production capabilities, the firm contends. It believes the strike will accelerate the decline of the traditional TV business, benefiting streaming. Loop also thinks Netflix’s advertising will become a “major contributor” over time.

3. Nvidia upgraded to Buy from Hold at Stifel

Stifel upgraded Nvidia (NVDA) to Buy from Hold with a price target of $600, up from $440. The firm cites “another exceptional quarter” from the company, its “significantly stronger-than-expected outlook,” and extended demand visibility for the upgrade. Stifel says it underestimated the company’s opportunity related to the potential shift of $1 trillion of installed data center infrastructure from general purpose compute to accelerated compute architectures. As data center compute demand continues to expand, longer-term data center capacity growth is increasingly constrained by power limitations and the slowing of Moore’s Law, the firm tells investors in a research note.

4. Dollar General upgraded to Buy from Hold at Edward Jones

Edward Jones upgraded Dollar General (DG) to Buy from Hold and added the shares to the firm’s Stock Focus List. The attractive fundamentals of the dollar store industry, reduced internet competition and the long-term potential for continued store growth create attractive store economics and growth potential for Dollar General, the firm tells investors in a research note.

5. Raymond James double upgrades Prudential to Strong Buy from Market Perform

Raymond James double upgraded Prudential to Strong Buy from Market Perform with a $125 price target, which represents 38% upside potential. The firm expects Prudential will “re-rate” as it proves out its transformation strategy and reflects potential for increased share repurchases as a catalyst. Prudential’s catalysts appear largely favorable as “significant de-risking” and reserving recently took place, and investors have been disappointed for a lengthy period, Raymond tells investors in a research note.

Top 5 Sell Calls:

1. BofA double downgrades Vizio to Underperform on macro concerns

BofA double downgraded Vizio (VZIO) to Underperform from Buy with a price target of $6, down from $11, as it sees headwinds from a weaker macro environment weighing on the device side of the business. The firm, which cut its device estimates to reflect lower TV unit sales, also sees the Platform+ side of the business facing pressures from lower active accounts as a function of lower TV sales and a weaker advertising market.

2. Olaplex Holdings downgraded to Underweight from Neutral at Piper Sandler

Piper Sandler downgraded Olaplex Holdings (OLPX) to Underweight from Neutral with a price target of $2, down from $3. Piper’s quarterly salon survey shows that instead of seeing improvement, “things look to have stabilized at a weaker level.” The firm now struggles to see a scenario of share gains going forward and better margin recovery. Respondents noting Olaplex as a preferred brand is still weak, penetration within the salon seems to have leveled out at 60%, and over half of respondents are still calling out negative Olaplex treatment demand impacts from macro environment and competition remains elevated, says Piper.

3. Genpact downgraded to Underweight from Neutral at JPMorgan

JPMorgan downgraded Genpact (G) to Underweight from Neutral with an unchanged price target of $40. Relative to Cognizant (CTSH), Genpact’s stock “tolerance to continued muted” short-cycle work and any potential slowing of large deal backlog is weaker, considering a steeper second half of 2023 ramp implied in its guidance, the firm tells investors in a research note. JPMorgan says that while the stock isn’t expensive, Genpact’s margin for error seems lower to meet second half targets that requires large deal momentum to continue.

4. Celldex initiated with an Underweight at Wells Fargo

Wells Fargo initiated coverage of Celldex (CLDX) with an Underweight rating and $21 price target. The firm believes Celldex’s barzolvolimab will be efficacious in chronic spontaneous urticaria, but thinks the Street is overly optimistic on its commercial potential given its “less-than-ideal” safety profile, the more advanced competition and time required for Phase 3 trials. The stock’s risk/reward is skewed to the downside for barzolvolimab into Phase 1 readout in Q4, Wells tells investors in a research note.

5. Medical Properties Trust downgraded to Underweight from Neutral at JPMorgan

JPMorgan downgraded Medical Properties Trust (MPW) to Underweight from Neutral with a price target of $7, down from $9. The firm says the recent stock action related to the negative Wall Street Journal story about the Prospect deal and Medical Properties’ rebuttal press release “underscore how sensitive this stock has become to tenant headlines/dynamics.” With stock trading in the mid-to-high single digits and its spot debt costs “arguably being quite high,” the company’s external growth engine continues to be “in the box” and future debt refinancing headwinds “could be quite real given the current backdrop,” JPMorgan tells investors in a research note. In addition, the firm does not see any economic rationale for Medical Properties maintaining the current dividend level, which is now translating into a 17% yield.