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 October 9-13.
 
Find all top-rated stocks by the best-rated analysts on TipRanks.

Top 5 Buy Calls:

Target upgraded to Buy at BofA

BofA upgraded Target (TGT) to Buy from Neutral with a price target of $135, up from $120. The stock’s risk/reward is improved following the recent pullback, the firm tells investors in a research note. BofA sees catalysts that could upside for Target. The company’s traffic could improve from “depressed levels” into fiscal Q4 and it has gross margin upside opportunities, says the firm.

Rivian Automotive upgraded to Buy at UBS

UBS upgraded Rivian Automotive (RIVN) to Buy from Neutral with a price target of $24, down from $26. The firm sees a reduced probability of an additional capital raise over the next ~1 year with capital likely not needed until the end of 2025, and thinks the market can refocus on improving fundamentals with the raise out of the way. UBS is forecasting 2023 production of roughly 54,500 vs. guidance of 52,000, with the potential for a raise, and forecasts 10-times unit growth by 2030.

Boeing initiated with a Buy at UBS

UBS initiated coverage of Boeing (BA) with a Buy rating and $275 price target. The firm notes that the fundamental demand backdrop for aircraft is strong, stating that the 20% pullback in the stock over the past two months prices in a significant amount of near-term supply chain risk. UBS adds that Boeing stock tracks free cash flow, which the firm expects to compound at 36% from 2023-2027, and it sees multiple drivers for UBS’s above-consensus $11B 2025 estimate for free cash flow despite supply chain lumpiness.

Electronic Arts upgraded to Buy at BofA

BofA upgraded Electronic Arts (EA) to Buy from Neutral with a price target of $150, up from $145. With investors cautious on the rebranding of FIFA and EA Sports, the stock’s balance of risk looks attractive again, the firm tells investors in a research note. BofA says Electronic Arts’ relative valuation is near a five year trough while early stats from the FC24 launch suggest upside to Street estimates and guidance.

Oracle upgraded to Outperform at Evercore ISI

Evercore ISI upgraded Oracle (ORCL) to Outperform from In Line with a price target of $135, up from $131. The firm believes the recent pullback in shares “creates a more interesting entry point” for a business that is now in a better position to deliver more consistent revenue and earnings growth due a higher percentage of revenue coming from cloud solutions. Oracle’s apps and infrastructure cloud businesses are now big enough to drive total revenue growth in the high single digits going forward, Evercore ISI tells investors in a research note. The firm believes Oracle’s current valuation leaves room for upside if the company can show consistent revenue growth and margin expansion.

Top 5 Sell Calls:

Qorvo downgraded to Sell at Citi

Citi downgraded Qorvo (QRVO) to Sell from Neutral with a price target of $78, down from $116. The firm sees increased China substitution risk post the recent Huawei Mate 60 phone launch, which it believes uses domestic radio frequency and connectivity chips. While the company’s China sales have already come down over the last year due to weak China smartphone demand, increasing competition from Chinese domestic RF component makers will lead to potential share losses and a weak sales recovery in 2024, Citi tells investors in a research note. The firm also downgraded Skyworks Solutions (SWKS) to Sell from Neutral with a price target of $87, down from $116.

Beyond Meat downgraded to Underperform at Mizuho amid uneven recovery

Mizuho downgraded Beyond Meat (BYND) to Underperform from Neutral with a price target of $5, down from $12, citing category pressure, cash burn and risk to estimates. Plant-based category growth has disappointed year-to-date. However, a distinction exists between plant-based beverages, or PBB, and plant-based meat, or PBM, added the firm, which expects improvement for PBB into 2024 as inflation moderates. Conversely, PBM remains impacted by macros, insufficient innovation and larger reinvestment, Mizuho argues.

Unilever reinstated with an Underperform at BofA

BofA reinstated coverage of Unilever (UL) with an Underperform rating and $44 price target. While the firm likes the current organizational structure and strategic focus and expects share gains in Beauty & Wellbeing, Home Care and Nutrition, BofA expects next year’s performance to be challenged. The firm adds that “if we are right” with estimates 1%-3% below on 2023-25 EPS, the “next 18 months will test investor confidence” in medium-term mid-single digit growth targets.

RXO Inc. downgraded to Underweight at JPMorgan

JPMorgan downgraded RXO Inc. (RXO) to Underweight from Neutral with a price target of $16, down from $17. The firm continues to see material risk to consensus estimates, especially in a lower for longer freight rate environment. The downgrade reflects earnings revision risk and cycle positioning, JPMorgan tells investors in a research note.

Timken downgraded to Underperform at BofA on near-term short-cycle caution

BofA downgraded Timken (TKR) to Underperform from Neutral with a price target of $74, down from $100, as the firm sees a “no pain, no gain” theme as it looks towards 2024 in its Machinery, E&C and Waste coverage. More EPS “pain” in the near-term sets up a better risk/reward in 2024 for “some names,” but BofA has near-term caution on short-cycle coverage and reduced its 2024 estimates for Timken.