Oracle upgraded, Southwest 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:

• Edward Jones upgraded Oracle (ORCL) to Buy from Hold without a price target. The firm says the company’s transition to a subscription model will drive a sales growth acceleration.
• Stifel upgraded Crowdstrike (CRWD) to Buy from Hold with a price target of $225, up from $153, as a new analyst took over coverage of the stock. While Endpoint Security is highly competitive, CrowdStrike has differentiation given its high-efficacy cloud-based endpoint technology, lightweight single-agent architecture, and “massive scale” analyzing over 1 trillion events daily, the firm argues.
• Citi upgraded HP Inc. (HPQ) to Buy from Neutral with a price target of $33, up from $31. The firm cites continued improvements in PC ecosystem with inventory digestion completed, significant cost-takeout which is supportive of margins and earnings recovery ahead, and an “undemanding valuations” and potential for higher free cash flow generation to drive higher buybacks for the upgrade.
• Bernstein upgraded Booking Holdings (BKNG) to Market Perform from Underperform. The firm says consensus estimates and the stock’s valuation “looks unchallenging” and that Booking’s buyback commitment will continue to make it a popular stock
• Bernstein upgraded TripAdvisor (TRIP) to Outperform from Market Perform. The firm says the key fear of operational deleverage from meta declines has been de-risked with other high-margin revenues able to offset, that allows Viator “to once again be the bull case.”

Top 5 Downgrades:

• Melius Research downgraded Southwest (LUV) to Sell from Hold with a price target of $19, down from $30. Southwest’s strategy to outgrow their issues is “not working” and there are two paths Southwest can take – either move forward with the current plan or reset by slowing growth – both of which pose downside risk, the firm says.
• Citi downgraded 2U (TWOU) to Neutral from Buy without a price target. While there is a strong argument that the enterprise of 2U is undervalued, it is increasingly difficult to see how the “Gordian Knot” of overleverage is resolved, the firm tells investors in a research note.
• Odeon Capital downgraded Regions Financial (RF) to Hold from Buy with a $17.10 price target. Regions has had good management for a decade now, but it appears that management’s reliance on margins above sales is “now creating a problem” as the bank must give up this focus “aligning its pricing to the markets,” the firm says.
• Barclays downgraded Waters (WAT) to Underweight from Equal Weight with a price target of $230, down from $270. The firm cites a lack of visibility on the instrument down cycle and potential recovery, as well as expectations for continued negative sentiment on instrument names for the downgrade.
• UBS downgraded IFF (IFF) to Neutral from Buy with a price target of $78, down from $88. The firm sees less potential for IFF to re-rate in the medium term and sees shares as range-bound with lower earnings vs. prior expectations.

Top 5 Initiations:

• Jefferies initiated coverage of Coca-Cola (KO) with a Hold rating and $62 price target. The firm says that while it has momentum and underlying fundamentals are strong, the stock’s current valuation provides limited upside as the looming tax settlement “may put a lid on shares.” Jefferies also started coverage of Boston Beer (SAM), Church & Dwight (CHD), and Molson Coors (TAP) with Neutral-equivalent ratings.
• Jefferies initiated coverage of PepsiCo (PEP) with a Buy rating and $203 price target. The firm says Pepsi is the most durable business in its coverage, and the most likely to grow earnings high-single digits or better in the next three years. Jefferies also started coverage of Constellation Brands (STZ), Keurig Dr Pepper (KDP), Monster Beverage (MNST), Colgate-Palmolive (CL), Vita Coco (COCO), and Procter & Gamble (PG) with Buy-equivalent ratings.
• Jefferies initiated coverage of Clorox (CLX) with an Underperform rating and $117 price target. The company’s August cyberattack delays its turnaround and adds uncertainty, the firm tells investors in a research note.
• Evercore ISI initiated coverage of WK Kellogg (KLG) with an In Line rating and $13 price target. The firm sees downside risk to the company’s revenue and gross margin if consumption trends remain weak.
• Truist initiated coverage of Cintas (CTAS) with a Buy rating and $625 price target. A return to normalized pricing increases and moderating input costs could drive upside margin gains and FY26 consensus EPS 10%+ higher, the firm tells investors in a research note.