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 30 – November 3.
 
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Top 5 Buy Calls:

1. Amazon.com initiated with a Buy at HSBC

HSBC initiated coverage of Amazon.com (AMZN)with a Buy rating and $160 price target. Amazon’s structural opportunity in cloud surpasses even the lock-in effect with consumers in e-commerce, HSBC tells investors in a research note. The firm adds that Amazon Web Services remains one of the most attractive stories in technology. Short-term “growth hiccups don’t impair the secular growth story,” contends HSBC.

2. Pinterest upgraded to Buy at BofA after “solid” Q3

BofA upgraded Pinterest (PINS) to Buy from Neutral with a price target of $37, up from $32. The company’s position versus peers is “much improved” as quarter-over-quarter underperformance shifts to outperformance, as expected in Q4, BofA tells investors. With the company much closer to the start of its Amazon deal ramp, the firm expects more acceleration in the first half of 2024. BofA has renewed confidence in the new management team given recent product execution.

3. Boeing upgraded to Conviction Buy at Goldman

Goldman Sachs upgraded Boeing (BA) to the firm’s Conviction List and keeps a Buy rating on the shares with a $258 price target. The firm believes investors are more focused on near-term disruptions than long-term fundamentals and normalized free cash flow, creating a buying opportunity “in this domestic half of the global aircraft manufacturing duopoly.”

4. UBS upgrades JD.com to Buy amid business transition

UBS upgraded JD.com (JD) to Buy from Neutral with a price target of $39, down from $40, after assuming coverage of the name. JD is in a year of transition with a new strategy based on cultivating a third-party ecosystem, building low-price mind share, and streamlining its corporate structure to be more responsive to market change, UBS tells investors in a research note. The firm views the company’s business recalibration as “necessary in this dynamic and competitive market.” UBS sees an attractive valuation at current share levels with the company’s net cash roughly equal to 50% of its market cap.

5. AbbVie upgraded to Overweight at Barclays

Barclays upgraded AbbVie (ABBV) to Overweight from Equal Weight with a price target of $170, up from $160. The firm says last week’s selloff looks like an overreaction to “external sector dynamics,” against a backdrop of Immunology momentum and commentary de-risking 2024 pricing. Barclays sees an opportunity in the shares “amidst the noise.” The upgrade reflects “clarity on the top-line evolution over the next 12-18 months and confidence on the timing of the trough,” the frim tells investors in a research note.

Top 5 Sell Calls:

1. MoffettNathanson cut Lyft to Sell, sees long-term guidance as likely to disappoint

MoffettNathanson downgraded Lyft (LYFT) to Sell from Neutral with a price target of $7, down from $10. With Q4 results, management is expected to provide both long-term guidance and “perhaps” improved disclosures on bookings and volumes, notes the firm, which adds that its analysis of non-traditional data points suggests investors may not like what they see if management discloses gross bookings and rides. Any potential historic financials “will reveal the unsustainable take-rate tactics used by past management to drive revenue,” added MoffettNathanson, which expects Lyft’s gross margins to compress from 50.8% in FY21 to 38.5% in 2024 with take-rate and pricing “no longer a meaningful lever to pull” amid rising insurance costs per ride. The firm forecasts Lyft to be a single digit adjusted EBITDA margin business, and believes any long-term guidance provided by management will “likely disappoint.”

2. Moderna downgraded to Sell at Deutsche Bank after “another tough update”

Deutsche Bank downgraded Moderna (MRNA) to Sell from Hold with a price target of $60, down from $125, calling the company’s Q3 report “another tough update.” Preliminary FY24/25 guidance confirms the company is looking at “another couple of years of heavy cash burn” and the report “incredibly” featured a further R&D increase despite the headwinds Moderna is seeing on revenue and gross margin, the firm tells investors. While further negative revenue revisions pressure “might be tolerable at this level with tighter P&L management,” Moderna’s “empire building leaves increasingly little room for error,” Deutsche Bank added.

3. Six Flags initiated with an Underweight at JPMorgan

JPMorgan initiated coverage of Six Flags (SIX) with an Underweight rating and $16 price target. In the near-term, the firm sees a pair trade opportunity within the regional theme park industry, noting Six Flags is trading at a 2 turn valuation premium to SeaWorld (SEAS). JPMorgan also sees theme parks as a “market share donor post-pandemic” and downside risk to Six Flags’ consensus estimates over the next 18 months.

4. PVH Corp. downgraded to Negative from Mixed view at OTR Global

OTR Global downgraded its view on PVH Corp. on Wednesday to Negative from Mixed. The firm cited checks that showed Q3 sales plan attainment in Western Europe and at U.S. outlets deteriorated quarter-over-quarter.

5. Toast initiated with an Underweight at Wells Fargo on “cloudier growth outlook”

Wells Fargo initiated coverage of Toast (TOST) with an Underweight rating and $16 price target. While the firm “typically gives the benefit of the doubt to market leaders with leading tech,” Wells suspects Toast is “likely to disconnect from on-the-ground success.” The firm expects the recent magnitude of beats will begin to come down as tailwinds begin to fade, “creating a cloudier growth outlook.”