Philip Morris upgraded, Palantir 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 Philip Morris (PM) to Buy from Neutral with a price target of $117, up from $109, and opened a “Positive Catalyst Watch” on the stock, citing the belief that the current stock price is “not fairly valuing the group’s market-leading, high growth NGP footprint.” (Read more)
• Morgan Stanley upgraded Baidu (BIDU) to Overweight from Equal Weight with a price target of $190, up from $160. The firm believes Baidu is the most obvious beneficiary of the $7.4T AI internet opportunity in China. (Read more)
• Morgan Stanley upgraded Avis Budget (CAR) to Overweight from Equal Weight with a price target of $230, up from $182. The firm believes Avis Budget is able to extract more value per unit while also running a larger fleet than peers. (Read more)
• Credit Suisse upgraded Melco Resorts & Entertainment (MLCO) to Outperform from Neutral with a price target of $18.20, up from $14. Given a better-than-expected recovery in the first half of 2023, it lifts its GGR estimates and is turning more constructive on the sector. (Read more)
• Wells Fargo upgraded Ball Corp. (BALL) to Equal Weight from Underweight with a price target of $55, up from $52, following a news report that said Ball could monetize its Aerospace business for about $5B. (Read more)

Top 5 Downgrades:

• Raymond James downgraded Palantir (PLTR) to Outperform from Strong Buy with a price target of $18, up from $15. The firm remains enthusiastic about Palantir’s positioning in AI, but cites the more than 60% appreciation in shares since the early May Q1 earnings report for the downgrade. (Read more)
• Morgan Stanley downgraded Performance Food Group (PFGC) to Equal Weight from Overweight with a price target of $66, down from $74. Morgan Stanley stills believe Performance Foods is a good operator with a favorably skewed investment case and undemanding valuation, but it has more exposure to casual dining and pizza, which, at a headline level, could remain more challenged categories for now. (Read more)
• RBC Capital downgraded Abcam (ABCM) to Sector Perform from Outperform with a price target of $22, down from $23. Shares are up 40% in the last 10 days and up 65% quarter-to-date, says the firm, who is taking profit on anticipation of a bid. (Read more)
• Goldman Sachs downgraded Gates Industrial (GTES) to Neutral from Buy with a $14.50 price target. The firm remains positive on Gates’s significant aftermarket business and margins that should drive solid through cycle cash generation, but continues to prefer Construction Materials and Environmental Services to its Capital Equipment coverage. (Read more)
• Milestone Pharmaceuticals (MIST) was downgraded to Hold from Buy at Jefferies with a price target of $4, down from $8, as a different analyst took over research coverage of the stock. While Milestone is ready to submit the NDA for its novel fast acting intranasal CCB for difficult to treat cardiac arrhythmias in Q3, the firm would like more clarity on the commercial opportunity. (Read more)

Top 5 Initiations:

• UBS initiated coverage of Molina Healthcare (MOH) with a Neutral rating and $310 price target. While UBS believes Molina Healthcare is well-positioned to see long-term above average revenue growth from recent and future Request for Proposals wins, market share gains, and an expectation of M&A, the impact from redeterminations on both membership and margins creates risk to estimates in FY24, the firm says. (Read more)
• Morgan Stanley initiated coverage of Progressive (PGR) with an Equal Weight rating and $135 price target. While Progressive is one of the leading auto insurers today in terms of growth, profitability and tech innovation, the strong performance over the past 5+ years is largely priced in, the firm says. (Read more) Morgan Stanley also started Allstate (ALL) with an Equal Weight rating and $117 price target (Read more) and AIG (AIG) with an Equal Weight rating and $57 price target. (Read more)
• Morgan Stanley initiated coverage of Travelers (TRV) with an Equal Weight rating and $185 price target. The firm believes a premium to most primary carrier peers is warranted given its limited catastrophe exposure and a relatively strong Bond and Specialty business. (Read more)
• Morgan Stanley initiated coverage of Chubb (CB) with an Equal Weight rating and $192 price target. As the company enters the next phase of growth, Chubb hopes to achieve sustainable value creation, but near-term results have been somewhat mixed, the firm notes. (Read more)
• Craig-Hallum initiated coverage of Tigo Energy (TYGO) with a Buy rating and $28 price target. The firm sees Tigo Energy as a “rare undiscovered gem” in the rapidly growing global solar market and thinks that investors who take note will be rewarded. (Read more) Roth MKM also started coverage of Tigo Energy with a Buy rating and $21 price target. (Read more)