Nike upgraded, Paramount downgraded: 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:

• Citi upgraded Nike (NKE) to Buy from Neutral with a price target of $135, up from $100. While the company’s sales challenges remain, Citi is more optimistic about Nike’s ability to “protect” earnings in fiscal 2024 and 2025 despite a “choppy” macro environment.
• Wells Fargo upgraded Snap (SNAP) to Overweight from Equal Weight with a price target of $22, up from $8. The firm sees advertising positively inflecting at Snap for first time since Apple’s (AAPL) privacy initiatives in April 2021.
• RBC Capital upgraded Pinterest (PINS) to Outperform from Sector Perform with a price target of $46, up from $32. The firm believes Pinterest is an attractive story underpinned by channel checks indicating key product cycles starting to work, positive ad load analysis and attractive comps.
• Goldman Sachs upgraded Universal Health (UHS) to Buy from Sell with a $170 price target. After several years of margin erosion driven by the Acute Hospital segment, the firm believes Universal Health’s margins will begin to recover in the second half of 2024 after physician subsidy pressures are annualized and as both the volume and rate environment remain favorable.
• Benchmark upgraded Domino’s Pizza (DPZ) to Buy from Hold with a $455 price target following last week’s “upbeat” investor day. The firm now has a better appreciation for the company-specific drivers of same store sales growth that Domino’s possesses going into the new year in what the firm expects will be a challenged economic environment for the consumer heading into FY24.

Top 5 Downgrades:

• Loop Capital downgraded Paramount (PARA) to Sell from Hold with an unchanged $12 price target. According to media reports, David Ellison’s Skydance Media, in partnership with RedBird Capital, is “kicking the tires” on National Amusements, which is the controlling shareholder of Paramount, but the firm does not see the upside for the public shareholders of Paramount from the deal.
• Goldman Sachs downgraded HCA Healthcare (HCA) to Neutral from Buy with a $271 price target. The firm’s rating change is “largely a relative call” versus peer stocks in the hospital space where it sees more meaningful catalysts over the next 12 months and greater multiple expansion upside potential.
• Goldman Sachs downgraded Align Technology (ALGN) to Sell from Neutral with a $197 price target. In a weaker macro environment, the firm sees clear aligners and implants as most exposed to potential trade downs and delayed purchases and for Align it also sees increased competitive challenges in the general practitioner and ortho channels.
• Piper Sandler downgraded Domino’s Pizza (DPZ) to Neutral from Overweight with a price target of $400, down from $401. While it is likely true that Domino’s is one of the only restaurant concepts that is likely to have accelerating domestic same-store-sales and unit growth next year, this dynamic is very well understood at this point, and is also arguably priced into the shares at current levels, says the firm.
• Benchmark downgraded Wingstop (WING) to Hold from Buy and removed the firm’s prior price target following the stock’s 47% move since the firm’s previous upgrade on August 3.

Top 5 Initiations:

• Citi resumed coverage of Broadcom (AVGO) with a Buy rating and $1,100 price target. The firm cites strength in the core business and accretion from the VMware acquisition for the Buy rating.
• TD Cowen initiated coverage of Intra-Cellular (ITCI) with an Outperform rating and $75 price target. Intra-Cellular is developing small molecule candidates for several neuropsych and CNS disorders and lead asset Caplyta has received approvals in both schizophrenia and bipolar disorder, the firm notes.
• JPMorgan reinstated coverage of IntercontinentalExchange (ICE) with an Overweight rating and $139 price target following a period of restriction. The firm sees the potential for peak and/or falling interest rates in 2024 “to remove a key impediment” for the company’s revenue growth.
• Guggenheim initiated coverage of Spyre Therapeutics (SYRE) with a Buy rating and $44 price target, citing a “positive view” of the company’s “potentially best-in-class IBD mAb portfolio.”
• Capital One initiated coverage of EyePoint (EYPT) with an Overweight rating and $44 price target. EyePoint, one of a few companies aiming to develop a treatment, EYP-1901, for retinal diseases that would allow patients to have meaningfully fewer eye injections than they currently do with Eylea and other approved anti-VEGF therapies, has the potential to “truly take market share from Eylea,” the firm says.