Nike downgraded, Pepsi 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:

• Monness Crespi upgraded Snowflake (SNOW) to Neutral from Sell without a price target. The firm believes fiscal 2025 will be a challenging year for Snowflake, but upgrades the shares on valuation following the recent selloff.
• Morgan Stanley upgraded PepsiCo (PEP) to Overweight from Equal Weight with a $190 price target. The firm names PepsiCo the firm’s top pick, both in beverages and overall, replacing Constellation Brands (STZ) in beverages as it top pick and Colgate (CL) as its overall top pick in consumer packaged goods.
• Bernstein upgraded Charter (CHTR) to Outperform from Market Perform with a $370 price target, reflecting a 25% upside. While the firm acknowledges that Charter has a clear set of challenges to navigate near-term, it believes the market has more than priced in these risks given the potential persistence of them.
• CLSA upgraded Futu Holdings (FUTU) to Outperform from Underperform with a price target of $65, up from $50. While a further share correction could be possible in the near-term, the company’s growth potential in the mid- to long-term is promising, the firm says.
• BofA upgraded Pinnacle West (PNW) to Buy from Neutral with a price target of $80, up from $71. The firm sees the adoption of the System Reliability Benefit, or SRB, surcharge, the regulator-led initiative towards a forward or hybrid test year and the Integrated Resource Plan, or IRP, consideration process pointing to an improving earnings and growth outlook through the end of the decade given the improving regulatory environment for the Arizona-based regulated utility.

Top 5 Downgrades:

• Williams Trading downgraded Nike (NKE) to Sell from Hold with a price target of $85, down from $92. “Nike’s strength continues to diminish,” the firm says, adding that it believes “consultants, rather than Nike experts are leading strategy decisions, senior leaders are too dogmatic, and do not welcome all opinions.”
• Evercore ISI downgraded Prologis (PLD) to In Line from Outperform with an unchanged price target of $136. The firm cites the stock’s lower relative ranking along with limited upside to estimates for the downgrade.
• Telsey Advisory downgraded Hibbett (HIBB) to Market Perform from Outperform with a price target of $74, down from $82. The company’s 2024 is projected to be a more difficult year than anticipated with the comp flat to down low single digits and operating margin contraction, the firm tells investors in a research note. Williams Trading also downgraded Hibbett to Hold from Buy with a $73 price target.
• Evercore ISI downgraded Invitation Homes (INVH) to In Line from Outperform with an unchanged price target of $36. While the firm continues to like the single family rental space over apartments due to the stickier nature of the renter base, limited new construction of homes across the U.S. and elevated mortgage rates, it sees limited upside in estimates and therefore less upside in the stock.
• JPMorgan downgraded Terex (TEX) to Neutral from Overweight with an unchanged price target of $63. The firm sees limited upside to Street estimates in 2024 and 2025 as the company indexes higher versus Oshkosh (OSK) to Europe, which remains weak.

Top 5 Initiations:

• Citi resumed coverage of Thermo Fisher (TMO) with a Neutral rating and $620 price target. While the firm continues to view Thermo as a “well-entrenched diversified player” and believes management has mostly de-risked this year, Citi moves to the sidelines given the recent multiple expansion and its 2025 numbers below consensus.
• Wolfe Research initiated coverage of Dynatrace (DT) with an Outperform rating and $60 price target. The firm is bullish on the company’s market opportunity, product cycle, and “differentiation” from offering full stack observability.
• RBC Capital initiated coverage of Howmet Aerospace (HWM) with an Outperform rating and $75 price target. The firm believes the company’s position as a “high-quality” aerospace engine supplier “will keep it in favor.”
• Morgan Stanley initiated coverage of Ball Corp. (BALL) with an Equal Weight rating and $68 price target. The firm says that while near- and long-term catalysts can drive earnings upside, near-term volumes may be pressured from weak consumer demand and the company’s exposure to the secularly challenged beer market.
• Morgan Stanley initiated coverage of Crown Holdings (CCK) with an Equal Weight rating and $87 price target. The firm sees Crown’s international beverage can exposure and non-core business pressured in 2024.