Foot Locker downgraded, Zillow initiated: 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:

• Oppenheimer upgraded Cloudflare (NET) to Outperform from Perform with an $85 price target. The firm thinks the company is well-positioned to offer edge compute at scale, consolidating compute/security/networking on one infrastructure enabling one common developer platform.
• Goldman Sachs upgraded Western Digital (WDC) to Neutral from Sell with a price target of $48, up from $31, citing improving NAND supply/demand, a cyclical recovery in the nearline HDD market and the introduction of a sum-of-the-parts component to the firm’s valuation framework after Western management concluded that spinning off its NAND business would be the best, executable option as it looks to unlock value.
• Oppenheimer upgraded C3.ai (AI) to Outperform from Perform with a $40 price target. Since Oppenheimer’s initiation report on June 29, C3.ai has reset guidance, worked through a model transition to usage-based, and shown real-world customer benefits, the firm tells investors in a research note.
• Oppenheimer upgraded DigitalOcean (DOCN) to Outperform from Perform with a $37 price target. AI demand is “clearly strong,” and enterprise adoption is set to surge as the market moves past “the network grooming phase of cloud services,” says the firm, which thinks growth is set to accelerate and is increasing outer-year estimates.
• Oppenheimer upgraded Equinix (EQIX) to Outperform from Perform with an $875 price target. The firm thinks “AI-focused names,” like Equinix, are set to outperform as evidence accumulates that AI can lead to both major new revenue sources and massive productivity improvements.

Top 5 Downgrades:

• BTIG downgraded Foot Locker (FL) to Neutral from Buy without a price target. The shares have rebounded over 30% off the August lows post the Q2 report, and as such, the firm is taking this opportunity to step to the sidelines.
• RBC Capital downgraded Hershey (HSY) to Sector Perform from Outperform with a price target of $213, down from $239. RBC’s latest channel work suggests the competitive landscape in 2024 is likely to be just as intense, if not more, than 2023 across Hershey’s chocolate and confection categories in the U.S., as it appears that Mars and Ferraro/Ferrera will likely elevate their marketing, promotional spend, and innovation in the upcoming year, the firm tells investors in a research note.
• Rosenblatt downgraded Six Flags Entertainment (SIX) to Neutral from Buy with a price target of $25, down from $32, in anticipation of the merger with Cedar Fair (FUN) completing.
• Nomura downgraded Trip.com Group (TCOM) to Neutral from Buy with a price target of $41, down from $48, after Q3 earnings beat and Q4 guidance missed expectations.
• Goldman Sachs downgraded Incyte (INCY) to Neutral from Buy with a price target of $65, down from $98. The firm sees continued uncertainty around Jakafi lifecycle management ahead of the losses of exclusivity in mid-2027 and late-2028.

Top 5 Initiations:

• Deutsche Bank initiated coverage of Zillow Group (ZG) with a Buy rating and $50 price target. The firm sees Zillow as the market leading platform for beginning a home buying journey with over twice the website traffic of Realtor.com and over twice the daily app users of Redfin (RDFN).
• Citi reinstated coverage of Royal Caribbean (RCL) and Carnival (CCL) with Buy ratings and price targets of $127 and $18, respectively. Citi’s most recent work on the cruise industry points to ongoing strength in October and November.
• B. Riley initiated coverage of Boot Barn (BOOT) with a Buy rating and $92 price target. The firm says the Boot Barn story is a “throwback to the days of a proven category-killing concept consolidating a large, attractive, fragmented market with no existing national player.”
• Deutsche Bank initiated coverage of Opendoor Technologies (OPEN) with a Hold rating and $2.80 price target. With an increasingly challenged affordability backdrop, the firm is concerned that pricing compression could be an ultimate outcome of elevated rates.
• Wedbush initiated coverage of VinFast Auto (VFS) with an Outperform rating and $12 price target. The firm believes the company is well positioned to generate a durable product portfolio for electric transportation globally while creating a “strong ecosystem to generate profitable growth over the coming years.”