Netflix upgraded, Tesla 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:

• Macquarie upgraded Netflix (NFLX) to Outperform from Neutral with a price target of $595, up from $410. Netflix reported “excellent” Q4 results and outlook as its efforts to boost subscribers, revenue and earnings are bearing fruit, the firm says.
• New Street upgraded AMD (AMD) to Buy from Neutral with a $215 price target after analyzing the possibility of $400B being spent on artificial intelligence chips in 2027. AMD is the best way to play a fast adoption scenario of AI chips, with the most valuation and expectation upside, the firm tells investors in a research note.
• Daiwa upgraded Verizon (VZ) to Outperform from Neutral with a price target of $47, up from $36. The firm has a “positive impression” of the company’s Q4 given the strength in Verizon’s core business and the 2024 guidance.
• JMP Securities upgraded Squarespace (SQSP) to Outperform from Market Perform with a $40 price target. The firm says Google Domains make its 2024 estimate appear conservative, international localization and pricing is a tailwind, and industry-wide rationalization increases confidence that Squarespace’s margins can expand.
• UBS upgraded First Horizon (FHN) to Buy from Neutral with a price target of $16, up from $15.50. UBS thinks First Horizon is well positioned to return capital to shareholders given their strong capital position, near-TBV stock valuation and management’s stated goals of deploying excess capital above 11% CET1.

Top 5 Downgrades:

• Deutsche Bank downgraded Netflix (NFLX) to Hold from Buy with a price target of $525, up from $460. While the firm acknowledges that the decision to downgrade “was a difficult one” as it increased earnings and free cash flow estimates, it says that Netflix’s leadership position is fully priced into the stock at these levels.
• Gordon Haskett downgraded Uber Technologies (UBER) to Hold from Buy with a $66 price target. Uber deserves to trade at a premium to peers, but its catalysts are now well appreciated, and Street incremental EBITDA margin estimates are sitting well above the company’s long-term target, the firm says.
• UBS downgraded Biogen (BIIB) to Neutral from Buy with a price target of $276, down from $311. The firm is moving to the sidelines as the Leqembi ramp is progressing slower than expected, and is not expecting a major sales inflection in 2024 based on a review of the latest IQVIA/Symphony data and management commentary.
• Barclays downgraded Thermo Fisher (TMO) and Danaher (DHR) to Equal Weight from Overweight with price targets of $555 and $240, up from $475 and $215, respectively. Given the recent run in shares, stocks trade at or above historical premiums to the market, leaving little room for more multiple expansion, the firm argues.
• Morgan Stanley downgraded Epam Systems (EPAM) to Underweight from Equal Weight with a price target of $250, up from $235. The firm says more pricing pressure, slower budget growth and lower venture capital investment will likely make a return to Epam’s previous growth rates difficult.

Top 5 Initiations:

• Redburn Atlantic initiated coverage of Tesla (TSLA) with a Sell rating and $170 price target Tesla has largely retained its technical leadership in electrical architectures, offering scale advantages and lower unit costs, but its valuation “appears indifferent to margin pressure from pricing and rising capital needs,” says Redburn.
• Redburn Atlantic initiated coverage of General Motors (GM) with a Neutral rating and $40 price target and Ford (F) with a Sell rating and $10 price target as the firm launched coverage of nine automotive original equipment manufacturers, with a “cautious bias” driven by falling incremental returns.
• Bernstein initiated coverage of Polestar Automotive (PSNY) with an Underperform rating and $1.15 price target. The firm says it loves the innovative asset-light strategy and the cars, but doesn’t think the company should be a stand-alone equity.
• Citi initiated coverage of Delek US (DK) with a Neutral rating and $26 price target as the firm initiated coverage of refiners, saying the stock is its least preferred name in the group.
• Citi analyst Vikram Bagri initiated coverage of Valero (VLO) with a Buy rating and $160 price target. The firm notes Valero continues to lead the way in strong execution and best positioned to perform in any environment.