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 December 4-8.

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

Top 5 Buy Calls:

1. General Motors upgraded to Buy at Mizuho

Mizuho upgraded General Motors (GM) to Buy from Neutral with a price target of $42, up from $38. The firm says sentiment on GM “is at a bottom” given the weak consumer, 25% UAW wage hikes, Cruise and electric vehicle challenges. This is reflected in the stock’s 10-year valuation lows, Mizuho adds. The firm notes the UAW strike is in the rearview mirror, production has resumed, and GM has “idiosyncratic catalysts” from fixed cost reductions, a refreshed EV ramp focused on profitability and share buybacks.
General Motors initiated with a Buy at HSBC

HSBC initiated coverage of General Motors with a Buy rating and $41.30 price target. The firm says the “age of disruption is underway” in the auto sector, with rising electric vehicle adoption, growing importance of software, and cost pressures affecting autos stocks. HSBC believes stock valuations do not reflect cash flow outlooks for its Buy rated stocks.

2. Raymond James upgrades Biogen to Outperform on attractive 2024 setup

Raymond James upgraded Biogen (BIIB) to Outperform from Market Perform with a $283 price target. The firm likes the setup for the shares in 2024 and believes the Leqembi launch will begin to gain traction next year, while the Skyclarys U.S launch will continue at its strong pace in 2024, bolstered by a launch in the European Union early next year. Raymond also thinks Biogen will “remain prudent” with research and development spend and while operating margins steadily improve moving forward. It says the shares are trading at an unwarranted discount to some of its large-cap biopharma peers.

3. Datadog upgraded to Buy from Hold at Stifel

Stifel upgraded Datadog (DDOG) to Buy from Hold with a price target of $140, up from $98. The firm states that its recent Datadog customer survey focused on growth expectations, usage trends, security adoption, and GenAI interest indicated that installed-base optimization showed a marked decline of about 38% vs. 50% in its prior two surveys and about half of the customers still optimizing indicated they were close to completing their optimizations, which is an improvement from 8% in the last survey. This is in line with the current consumption commentary and bodes well for Datadog’s FY24 growth, Stifel stated. The firm added that after a volatile 2023, given the current consumption trends and a stable macro backdrop, it expects Datadog to post 25% 2024 revenue growth.

In addition, Scotiabank initiated coverage of Datadog with an Outperform rating and $138 price target. Datadog has emerged as a leader in the observability market with a clear differentiation in cloud-native environments, says the firm, which adds that 2024 estimates are “at a level we view as eminently achievable.”

4. AutoZone just upgraded at Raymond James

Raymond James upgraded AutoZone (AZO) to Strong Buy from Outperform with a price target of $3,100, up from $2,850. The firm expects the company’s fiscal 2024 results to support its favorable long-term thesis of market share gains driven by improved parts coverage and availability following more mega hub openings. While there is still work to be done in AutoZone’s commercial business, Raymond James is encouraged by the sequential acceleration in revenue delivered in fiscal Q1 and expects results to continue to improve through 2024, the analyst tells investors in a research note. The firm is turning increasingly bullish on AutoZone’s valuation.

5. Bumble initiated with an Overweight at Wells Fargo

Wells Fargo initiated coverage of Bumble (BMBL) with an Overweight rating and $19 price target. The firm, which is “optimistic” on the sustainability of Bumble app growth, notes that Wells’ EBITDA multiple implies a slight premium to peer Match (MTCH) to account for faster growth at Bumble.

Top 5 Sell Calls:

1. Plug Power downgraded to Underweight at Morgan Stanley

Morgan Stanley downgraded Plug Power (PLUG) to Underweight from Equal Weight with a price target of $3, down from $3.50. Rising interest rates and renewable electricity prices leave green hydrogen economics increasingly reliant on subsidies, where visibility remains poor, the firm tells investors in a research note. Morgan Stanley says this could delay project pipelines and slow adoption. It cites liquidity concerns and worsening hydrogen economics for the downgrade of Plug Power.

2. Shift4 Payments initiated with bearish view at Redburn Atlantic

Redburn Atlantic initiated coverage of Shift4 Payments (FOUR) with a Sell rating and $49 price target. The firm says why Shift4 should be valued as a legacy payment business, “not a disruptor.” Rrdburn anticipates Shift4’s earnings may fall short of consensus’ expectations, and says the company is buying some of its fast growth.

3. Avis Budget initiated with a Sell at Goldman Sachs

Goldman Sachs initiated coverage of Avis Budget (CAR) with a Sell rating and $164 price target. Following two years of tight supply leading to record high rental rates and surging residual values, EBITDA has started to normalize in the rental car space, the firm tells investors in a research note. Goldam believes consensus estimates of pricing in 2025 remaining 30% over 2019 levels are too high, and that greater focus on company-specific growth is more warranted later cycle. While Avis Budget has been executing better than Hertz (HTZ) year-to-date, it has a more limited catalyst path from here, contends the firm, which expects further downside to consensus estimates in 2025. The market is overestimating the company’s’ pricing power at 30% versus 2019 in 2025, Goldman says. As such, it believes the stock’s risk/reward skews negatively.

4. Asana downgraded to Reduce at HSBC

HSBC downgraded Asana (ASAN) to Reduce from Hold with an unchanged price target of $18. While margin expansion drove a narrower Q3 loss, the company’s macroeconomic challenges continue, the firm tells investors in a research note. HSBC says Asana’s uptick in guidance was largely led by heightened cost controls. Its price target implies 23% downside in the shares.

5. Range Resources downgraded to Underweight at JPMorgan

JPMorgan downgraded Range Resources (RRC) to Underweight from Neutral with a price target of $32, down from $33. Improved macro prospects for the oil and gas exploration and production group stem from efficiency gains and deflationary tailwinds, which are more than offsetting modest declines in well productivity and should lead to better overall capital efficiency in 2024, the firm tells investors in a research note. In addition, JPMorgan thinks the potential for more mergers and accusations given the industry’s “thirst for sticks on the map could keep a floor on valuations.” Given the “mixed macro backdrop,” the firm thinks stock selection will be paramount to drive alpha next year. Its rating changes reflect updates to its “forced ranking” system on key valuation, cash flow, cash return, and balance sheet metrics going into 2024.