Lululemon downgraded, Datadog 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:

• Wells Fargo upgraded Integra LifeSciences (IART) to Overweight from Equal Weight with a price target of $49, up from $40. The firm now has increased confidence in the company’s ability to restart commercial distribution from its Boston facility by mid-to-late Q2 of 2024.
• Wells Fargo upgraded Crown Castle (CCI) to Equal Weight from Underweight with a price target of $115, up from $90. The involvement of Elliott and the potential for a strategic shake-up should provide some downside protection for the shares, even if material upside is limited, the firm tells investors in a research note.
• BofA upgraded Apellis (APLS) to Buy from Neutral with a price target of $85, up from $52. The company’s Syfovre label for geographic atrophy was updated to include the safety events of vasculitis with or without occlusion and did not include a black box warnings, the firm notes.
• Mizuho upgraded First Industrial Realty (FR) to Buy from Neutral with an unchanged price target of $55. The firm sees a positive risk/reward at current share levels.
• JPMorgan upgraded XP Inc. (XP) to Overweight from Neutral with a price target of $30, up from $27. The firm says XP’s take rate will benefit both from asset class mix, as well as fees on a per-segment basis.

Top 5 Downgrades:

• Raymond James downgraded Lululemon (LULU) to Outperform from Strong Buy with a price target of $495, up from $440, following the recent stock rally, reflecting some upside being factored in. The firm expects an in-line Q3, but is modeling slower growth for Q4, in line with implied guidance.
• Mizuho downgraded Prologis (PLD) to Neutral from Buy with a price target of $125, down from $140. The firm sees a balanced risk/reward and more limited upside to the price target.
• UBS downgraded United Rentals (URI) to Neutral from Buy with a price target of $525, up from $504. The firm says a slower cycle and above average multiple equal more limited upside for the shares.
• JPMorgan downgraded SAIC (SAIC) to Neutral from Overweight with a price target of $142, up from $130, citing valuation with the stock up 24% year-to-date.
• Needham downgraded Staar Surgical (STAA) to Hold from Buy and removed the firm’s prior $49 price target following an ophthalmology survey with 35 respondents to get updated checks on key vision care segments. While it’s clear Staar’s U.S. launch has been slower than expected, the firm believes its survey results are negative and imply there could be downside to the domestic launch.

Top 5 Initiations:

• Scotiabank initiated coverage of Datadog (DDOG) 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 it views as “eminently achievable.”
• Wells Fargo initiated coverage of Marriott (MAR) with an Equal Weight rating and $220 price target. The firm says Marriott has an attractive fee-based business with multiple growth drivers and favorable exposure to 2024 tailwinds, but at 15-times 2024 EV/EBITDA, Wells views risk/reward as even.
• Wells Fargo initiated coverage of Hyatt Hotels (H) with an Overweight rating and $138 price target, implying 15% upside. The firm views the company’s ongoing asset-light transition as highly accretive.
• Wells Fargo initiated coverage of Hilton (HLT) with an Equal Weight rating and $168 price target. The firm says that while there’s a lot to like about Hilton – including compounding fee growth, accelerating NUG, capital return -, at 15-times 2024 EV/EBITDA, risk/reward is fairly even.
• Scotiabank initiated coverage of Dynatrace (DT) with an Outperform rating and $62 price target. DPS and Grail should support NRR and help squeeze out point-product peers and the firm sees “a beat/raise story” for FY24 with “the path of least resistance higher for Dynatrace shares.”