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 November 13-17.
 
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Top 5 Buy Calls:

1. AMD initiated with a Buy at Roth MKM

Roth MKM initiated coverage of AMD (AMD) with a Buy rating and $125 price target. AMD’s differentiated portfolio of high-performance compute and networking processors and accelerators represents a strong investment opportunity, the firm tells investors in a research note. AMD is well-positioned from a product portfolio perspective to address the growing data center infrastructure market, and Roth’s checks indicate that AMD is poised to gain further share in the cloud server market and is making further inroads in the enterprise market.

2. Mizuho upgrades Intel to Buy into “significant” new product launches

Mizuho upgraded Intel (INTC) to Buy from Neutral with a price target of $50, up from $37. The firm believes Intel is lining up “significant” new server product launches and foundry customer announcements in the next six months. The company has a better 2024 compute and data center product roadmap versus peers and historical rollouts, and is facing a PC and data center industry upcycle next year, Mizuho tells investors in a research note. In addition, the firm believes the Altera FPGA spinoff adds $17 per share of value. It notes the stock trades at a discount to AMD (AMD) and Nvidia (NVDA).

3. Block upgraded to Buy at Daiwa

Daiwa upgraded Block (SQ) to Buy from Outperform with a price target of $77, up from $71. The stock had seen a significant price adjustment due to continued negative news, such as consumption adjustment and a short seller report, but due to what the firm sees as “a significant improvement in the profit outlook” after the Q3 financial results, it judges that the shares have “become extremely undervalued” and although concerns simmer, Daiwa believes that the medium-term risk/reward has improved.

4. DoorDash initiated with a Buy at Deutsche Bank

Deutsche Bank (DASH) initiated coverage of DoorDash with a Buy rating and $125 price target, implying 30% upside from current levels. DoorDash’s core markets in restaurant, grocery, convenience, and retail delivery are “massive” and measure at around $6.7 trillion, the firm tells investors in a research note. With DoorDash capturing only 1% of its overall market via users that represent only 7% of available homes, “there is ample runway for user growth from here,” says Deutsche Bank. The firm says the company will be one of the prime beneficiaries of digital transformation trends within these multi-trillion markets over the coming years.

5. Wayfair initiated with a Buy at Deutsche Bank

Deutsche Bank initiated coverage of Wayfair (W) with a Buy rating and $55 price target, suggesting 16% upside from current levels. Wayfair stands as the pure-play e-commerce market leader in a “large and generally fragmented” market, the firm tells investors in a research note. Deutsche Bank expects the company to continue to build on its share position as it drives industry-leading supply choice, delivery speeds, and price. The company’s share gains have improved recently as inventory positions normalize and Wayfair is thus able to differentiate in the market based on premium selection, price, and delivery speeds, says the firm.

Top 5 Sell Calls:

1. Southwest downgraded to Sell at Melius Research with strategy “not working”

Melius Research downgraded Southwest (LUV) to Sell from Hold with a price target of $19, down from $30. Southwest’s strategy to outgrow their issues is “not working” and there are two paths Southwest can take – either move forward with the current plan or reset by slowing growth – both of which pose downside risk, the firm tells investors. Melius’ EPS estimates are 55% below the Street in 2024 and 47% below consensus in 2025, Melius noted.

2. Advance Auto Parts cut to Underperform at BofA on disappointing Q3, FCF pressure

BofA downgraded Advance Auto Parts (AAP) to Underperform from Neutral with a price target of $43, down from $60. The company reported a “disappointing” Q3 earnings report, with expectations for continued challenges remaining over the medium term, the firm tells investors in a research note. BofA further notes Advance Auto’s planned sale of assets, a new cost cutting program, and a CFO transition, but also believes that the transformation will be “messy” and that its free cash flow will likely remain under pressure for at least the next 12 months.

3. Beauty Health downgraded to Underweight at JPMorgan

JPMorgan downgraded Beauty Health (SKIN) to Underweight from Neutral without a price target. The company’s Q3 report was headlined by both a significant negative revision to the financial outlook and the exit of CEO Andrew Stanleick, the firm tells investors in a research note. Jefferies thinks investors will view the announced management shuffle in a more positive light as the company has struggled to execute and manage investor expectations. However, a greater than expected impact from previously disclosed Syndeo challenges in the domestic market is driving a share selloff, says the firm. It expects investors will wait for a revised outlook from the new CEO and relatively new CFO before revisiting a story “that has been hampered by execution challenges.”

Piper Sandler also cut Beauty Skin’s rating to Underweight, while Canaccord, Benchmark, William Blair, and TD Cowen downgraded the stock to Neutral-equivalent ratings.

4. Canadian Solar downgraded to Underweight at JPMorgan

JPMorgan downgraded Canadian Solar (CSIQ) to Underweight from Neutral with a price target of $22, down from $32. The stock has modestly outperformed peers over the past couple of months despite significant declines in global module selling prices, which presents downside risk over the next few quarters, the firm tells investors in a research note. JPMorgan says that while the solar industry clears channel inventory over the coming quarters in certain markets, other areas of the value chain which have relatively more pricing power likes trackers and inverters will recover sooner than modules, driving its relatively less favorable view towards Canadian Solar over the near-term. The firm expects the stock to underperform until visibility improves.

5. Ansys double downgraded to Underperform from Buy at BofA

BofA double downgraded Ansys (ANSS) to Underperform from Buy with a price target of $295, down from $356. The firm has concerns around broader demand trends and U.S-China export restrictions. While China only accounts for 6% of Ansys revenue, it added one point to growth over the last two years, BofA tells investors in a research note. The firm believes export restrictions could impact the company’s competitive positioning in the region.