Disney downgraded, Meta Platforms upgraded: 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:

• New Street upgraded Meta Platforms (META) to Buy from Neutral with a price target of $350, up from $285. The firm is “hearing very positive feedback” on Meta’s artificial intelligence efforts. (Read more)
• Piper Sandler upgraded Walmart (WMT) to Overweight from Neutral with a price target of $210, up from $145. As grocery inflation subsides, Walmart has an opportunity to further extend market share gains, the firm argues. (Read more)
• BTIG upgraded Zscaler (ZS) to Buy from Neutral with a $185 price target. Fieldwork indicates that demand in the secure service edge has sustainably improved and that large projects which were put on hold in late 2022 / early 2023 are starting to move forward again, the firm says. (Read more)
• Wolfe Research upgraded Datadog (DDOG) to Outperform from Peer Perform with a $140 price target ahead of the company’s Dash conference on August 2 and Q2 earnings August 8. (Read more)
• JPMorgan upgraded Huntington Bancshares (HBAN) to Neutral from Underweight with a price target of $13, up from $12. The firm sees a more balanced risk/reward for shares given the bank’s moderating net interest margin pressure and “robust” capital. (Read more)

Top 5 Downgrades:

• Atlantic Equities downgraded Disney (DIS) to Underweight from Neutral with a price target of $76, down from $113. The firm sees a “negative tipping point” in linear TV advertising, which it estimates will shave almost $1B off 2026 forecast operating income at Disney. (Read more)
• Citi downgraded Goldman Sachs (GS) to Neutral from Buy with a price target of $400, up from $370. The firm sees a balanced risk/reward with the shares trading slightly ahead of the historical multiple. (Read more)
• BofA downgraded Tractor Supply (TSCO) to Neutral from Buy with a price target of $226, down from $270. Given a fading tailwind from inflation, worsening demand for discretionary categories and the firm’s estimate that one third of revenue comes from animal/pet food, BofA expects Tractor Supply to report an earnings miss and cut guidance. (Read more)
• Deutsche Bank downgraded Sprouts Farmers Market (SFM) to Hold from Buy with a price target of $42, down from $45. While the firm acknowledges ongoing solid fundamentals ahead of Sprouts’ Q2 results and expects another “beat and raise,” it believes the shares are factoring this in at current levels. (Read more)
• Citi downgraded Rackspace Technology (RXT) to Sell from Neutral with a price target of $1.50, up from $1.25. Although Rackspace restructured to a new operating model last quarter and has hired multiple experienced industry leaders into management roles, the tough challenge is whether the company can not only pivot to growth but also achieve growth levels that attract investors in a reasonable timeframe, the firm says. (Read more)

Top 5 Initiations:

• HSBC initiated coverage of Electronic Arts (EA) with a Hold rating and $128 price target. The company is the leading sport genre games publisher of iconic FIFA fame, but is struggling with the mobile gaming segment, the firm argues. (Read more)
• William Blair initiated coverage of AbbVie (ABBV) with a Market Perform rating. The firm says the Humira loss of exclusivity is complicated by growing competition in AbbVie’s hematology and aesthetic franchises. (Read more) 
• HSBC initiated coverage of Take-Two Interactive (TTWO) with a Buy rating and $170 price target. The firm sees strong game sales ahead and scope for merger gains. (Read more) 
• Morgan Stanley resumed coverage of Mobileye (MBLY) with an Equal Weight rating and $34 price target. The company’s Q2 SuperVision sales may have limited upside given the inventory backlog, the firm believes. (Read more)  
• Citi initiated coverage of Incyte (INCY) with a Buy rating and $82 price target. While Jakafi patent expiration appears priced into the shares, in Opzelura, Incyte has another potential blockbuster opportunity, contends Citi. (Read more)