Netflix downgraded, Block 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:

• Wedbush upgraded Block (SQ) to Outperform from Neutral with a price target of $90, up from $70. BTIG also upgraded the shares to Buy. Wedbush now has increased conviction in Block’s ability to post improving performance in its “weak” merchant segment.
• UBS upgraded Spotify Technology (SPOT) to Buy from Neutral with a price target of $274, up from $170. The firm thinks the company’s efficiency initiatives remain the focus and have increased conviction on sustainable margin expansion and stronger bottom-line trends in the coming years.
• Morgan Stanley upgraded Citi (C) to Overweight from Underweight with a price target of $65, up from $46. The firm’s expectation that regulators flex Basel Endgame lighter to align with Europe as they strive to reach consensus within the Fed Governors drives an increase in buybacks to optimize CET1 ratios starting in 2025, notes the firm, which calls Citi the “biggest beneficiary” from incremental buybacks as it contends that “buybacks at roughly half of book value are a very accretive financial transaction.”
• Morgan Stanley upgraded Goldman Sachs (GS) to Overweight from Equal Weight with a price target of $449, up from $333. The firm upgraded the large cap bank group to Attractive, saying it looks like Basel endgame “will be lightened,” opening the door for a significant increase in buybacks. Morgan Stanley also upgraded Bank of America (BAC) to Overweight from Equal Weight with a price target of $41, up from $32.
• Morgan Stanley upgraded BNY Mellon (BK) to Equal Weight from Underweight with a price target of $62, up from $52. The firm says the “potentially better-than-feared outcome” on Basel 3 Endgame leads it to model almost $4B of freed up capital for return to shareholders across 2025 and 2026 versus prior estimates.

Top 5 Downgrades:

• Seaport Research downgraded Netflix (NFLX) to Neutral from Buy without a price target. The firm cites valuation for the downgrade with the shares having “rapidly achieved” the firm’s recently increased $576 prior price target.
• Raymond James downgraded AMD (AMD) to Outperform from Strong Buy with a price target of $195, up from $190. The firm cites valuation for the downgrade.
• Oppenheimer downgraded Five Below (FIVE) to Perform from Outperform with a price target of $200, down from $235. The firm believes underlying growth dynamics for Five Below “are slowing, at least somewhat,” given a now larger base of units, waning remodeling opportunities, and stepped-up reinvestment requirements, on top of already elevated operating margins.
• Wells Fargo downgraded Western Alliance (WAL) to Equal Weight from Overweight with a price target of $72, up from $62. The firm says the company’s current results and guidance “leave little room for error.”
• Jefferies downgraded Masimo (MASI) to Hold from Buy with a price target of $121, up from $107. The firm says the company’s trends and outlook have improved, but a lot of good news is baked into the shares.

Top 5 Initiations:

• Morgan Stanley initiated coverage of Instacart (CART) with an Equal Weight rating and $28 price target. The firm sees attractive upside potential in the $1.8T U.S. grocery market but says the highly competitive nature of the business and recent behavior by peers raises concerns on Instacart’s forward growth as well as market-share loss.
• Northland initiated coverage of Nice (NICE) with an Outperform rating and $300 price target. The firm contends that Nice’s unique conversational data and internally developed customer intent models should drive strong demand.
• Loop Capital initiated coverage of Confluent (CFLT) with a Hold rating and $23 price target. The firm believes it is too early in the adoption curve of this emerging technology, which is reflected in the company’s “lackluster results” in its Cloud business last year.
  Oppenheimer initiated coverage of Pinstripes (PNST) with an Outperform rating and $6 price target. Pinstripes represents an “intriguing and more speculative investment opportunity” within the attractive “eatertainment” category, the firm tells investors in a research note.
• Morgan Stanley initiated coverage of SharkNinja (SN) with an Equal Weight rating and $54 price target. Decelerating consumer spend and “lingering reversion” keeps the firm with a more balanced view in the near term on shares.