Cisco downgraded, Lucid resumed: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly.

Top 5 Upgrades:

• Stifel upgraded Papa John’s (PZZA) to Hold from Sell with a price target of $60, down from $65. The firm believes near-term expectations are reasonable.
• Morgan Stanley upgraded Alcoa (AA) to Equal Weight from Underweight with a price target of $36.50, up from $28.50. The firm now sees a more balanced risk/reward for Alcoa shares given the company’s continued progress on cost saving measures, reduced uncertainty on the path to resolving bauxite mining issues in Western Australia, and potentially more Inflation Reduction Act benefits to come.
• Jefferies upgraded Ingevity (NGVT) to Buy from Hold with a price target of $62, up from $52. The firm says hybrid sales are outpacing electric vehicle sales, bolstering activated carbon volumes, and likely leading to a 4% increase in segment sales and a 7% increase in EBITDA through 2026.
• Morgan Stanley upgraded Sea Limited (SE) to Overweight from Equal Weight with a price target of $70, while BofA also upgraded Sea Limited shares to Buy from Neutral with a price target of $70.
• Seaport Research upgraded PPG (PPG) to Buy from Neutral with a $175 price target following in-line Q1 results. The firm cites an “attractive combination of margin momentum, volume recovery, and reasonable valuation” for its increased rating on the shares.

Top 5 Downgrades:

• JPMorgan downgraded Cisco (CSCO) to Neutral from Overweight with a price target of $53, down from $62, after resuming coverage of the shares following a period of restriction. The firm believes Cisco’s medium-term outlook “remains muted” with its expectations for 5% earnings growth annually through fiscal 2027.
• Raymond James downgraded Western Digital (WDC) to Market Perform from Outperform without a price target. The firm cites valuation for the downgrade as the shares now discount a “reasonable recovery” in the markets for both the hard disk drives and NAND memory chips.
• BMO Capital downgraded Prologis (PLD) to Market Perform from Outperform with a price target of $112, down from $145. Despite underperforming year-to-date, the shares will remain under pressure “as long as the demand picture remains murky,” the firm tells investors in a research note.
• Evercore ISI downgraded PPG Industries (PPG) to In Line from Outperform with an unchanged price target of $152. The firm says PPG’s headwinds are intensifying and the market is likely to struggle with what multiple to apply to shares in the nearer term.
• JPMorgan downgraded PacBio (PACB) to Neutral from Overweight without a price target. The downgrade follows the preannouncement last week as the company missed Q1 results, reduced 2024 guidance, and pushed out the timing of achieving greater than $500M of revenue.

Top 5 Initiations:

• Citi resumed coverage of Lucid Group (LCID) with a Neutral rating and $2.90 price target. The firm sees a balanced risk/reward when weighing Lucid’s “strong” electric vehicle technology position and “adequate” near-term liquidity against past demand and branding challenges and the company’s reliance on a successful Gravity ramp later this year.
• TD Cowen initiated coverage of BellRing Brands (BRBR) with a Buy rating and $64 price target. The company is “uniquely positioned” to capitalize on rising consumer adoption of ready-to-drink shakes for weight management, the firm tells investors in a research note.
• TD Cowen initiated coverage of Simply Good Foods (SMPL) with a Hold rating and $34 price target. The firm believes the declining relevance of the Atkins Diet “creates a negative halo over the brand and poses a significant obstacle to its marketing turnaround.”
• Benchmark initiated coverage of Hut 8 Corp. (HUT) with a Buy rating and $12 price target. The “new HUT,” which is the “NewCo” resulting from the merger of “old HUT” and US Bitcoin Corporation, features a diversified business model with multiple revenue streams including self-mining, managed services, hosting, high-performance computing and artificial intelligence, notes the firm, which sum-of-the-parts analysis includes a 2-times EV/revenue multiple applied to its FY24 revenue of $195.8M and the market value of the company’s bitcoin holdings.
• Oppenheimer initiated coverage of Kymera Therapeutics (KYMR) with an Outperform rating and $53 price target. The firm says Kymera has the potential to deliver first, and best-in-indication, therapies in inflammation and immunology indications through the pursuit of validated targets and pathways utilizing its PROTAC degrader platform.