Rivian downgraded, Lowe’s 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:

• JPMorgan upgraded Lowe’s (LOW) to Overweight from Neutral with a price target of $265, up from $210, and added the shares to its Analyst Focus List as a value stock idea. The firm continues to believe Lowe’s goods share of wallet headwinds are moderating with trends ultimately reverting back toward wage growth.
• Citi upgraded PepsiCo (PEP) to Buy from Neutral with a price target of $195, up from $180. With a lower organic sales growth bar and a reset in market expectations, the setup looks more favorable with PepsiCo’s track record of meeting or beating guidance, the firm says.
• UBS upgraded GE HealthCare (GEHC) to Neutral from Sell with a price target of $88, up from $66. The firm had believed that a lack of margin expansion near-term would drive a higher degree of investor skepticism on the mid-term margin targets at GE HealthCare, which in turn could drive a de-rating, but management provided “credible margin guidance” along with 2023 results that imply 50-80 basis points of expansion despite limited revenue growth.
• Goldman Sachs upgraded United Therapeutics (UTHR) to Neutral from Sell with a price target of $215, up from $213. The firm believes current share levels appropriately reflect the balance of potential positives and risks for the business over the near to intermediate term.
• UBS upgraded Urban Outfitters (URBN) to Neutral from Sell with a price target of $41, up from $21. The firm expects a solid Q4 print from Urban Outfitters, but thinks this is already priced into the shares.

Top 5 Downgrades:

• Barclays downgraded Rivian Automotive (RIVN) to Equal Weight from Overweight with a price target of $16, down from $25. The company has a great product and technology, but this is not enough to avoid increased signs of demand pressure amid the broader electric vehicle slowdown, the firm tells investors in a research note.
• Morgan Stanley downgraded Hershey (HSY) to Underweight from Equal Weight with a price target of $183, down from $191. The firm is cautious on Hershey’s midterm outlook given outsized cocoa inflation, a tougher pricing environment and weaker consumer demand for confectionery and popcorn.
• Macquarie downgraded Unity (U) to Underperform from Neutral with an unchanged price target of $20. The firm is concerned about the scope of reorganization the company is currently undertaking, which includes key ironSource departures after the ad tech merger has underperformed.
• Susquehanna downgraded Boyd Gaming (BYD) to Neutral from Positive with a price target of $75, down from $84, as the firm expects revenue headwinds in 2024 in its “most valuable segment” of Las Vegas Locals without a notable offset in its other segments.
• Raymond James downgraded Newell Brands (NWL) to Market Perform from Outperform without a price target. After multiple guidance cuts due to slow to recover consumer discretionary categories as well as sequentially increasing operating expenses “even before management turns on the advertising spigot this year,” the firm downgrades the shares.

Top 5 Initiations:

• Seaport Research initiated coverage of Trade Desk (TTD) with a Neutral rating and no price target. The firm is positive on Trade Desk’s long-term fundamental outlook but believes the risk/reward is fairly balanced at current share levels.
• JPMorgan initiated coverage of Palmer Square Capital (PSBD) with an Overweight rating and $17 price target. The firm says Palmer is a solid option for investors who are targeting private credit-like returns and prefer exposure to larger borrowers, more liquid broadly syndicated loans. RBC Capital, Citi and Oppenheimer also started the name with Buy-equivalent ratings, while BofA and UBS initiated the shares with Neutral ratings.
• Jefferies initiated coverage of TKO Group (TKO) with a Buy rating and $120 price target. The firm believes the company can generate meaningful sales and EBITDA growth via rights renewals, and synergies including maximizing gate performance, cross-pollinating across fan bases, sponsorships, and other cost efficiencies.
• Roth MKM initiated coverage of SilverBow Resources (SBOW) with a Buy rating and $41 price target. The company offers “nice” organic production growth, long-term leverage to natural gas upside, a large acreage footprint that spans both oil and gas, and a discounted valuation, the firm tells investors in a research note.
• Piper Sandler initiated coverage of Tango Therapeutics (TNGX) with an Overweight rating and $18 price target. The company’s MTA-cooperative PRMT5 inhibitor portfolio is well positioned within an increasingly important space within precision oncology, the firm says.