Shopify, Kraft Heinz 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:

• Goldman Sachs upgraded Shopify (SHOP) to Buy from Neutral with a price target of $74, up from $67. Given Shopify’s “significant technology moat” in e-commerce software and share gain across cycles, the firm believes these investments will drive more durable revenue growth at scale.
• Piper Sandler upgraded Kraft Heinz (KHC) to Overweight from Neutral with an unchanged price target of $42. The firm sees incrementally better visibility on Kraft Heinz’s upside in foodservice, helped by its new innovation in time-saving dispensers, which it expects can drive incremental revenues within existing relationships and some incremental distribution.
• Needham upgraded Stryker (SYK) to Buy from Hold with a $392 price target. The firm expects new product launches combined with Stryker’s capital equipment backlog to allow it to deliver upside to consensus revenue estimates and overcome any potential recon market slowdown.
• Citi upgraded Tandem Diabetes (TNDM) to Buy from Neutral with a price target of $57, up from $40. The firm believes Tandem’s guidance screens conservatively as it only relies on 70% patient renewals and flat to down new patient starts.
• Citi upgraded Edwards Lifesciences (EW) to Buy from Neutral with a price target of $105, up from $98. The stock is positioned to work well into the end of the year, with a reset base business and optimism on the next leg of growth, the firm tells investors in a research note.

Top 5 Downgrades:

• JPMorgan downgraded Middleby (MIDD) to Underweight from Neutral with a price target of $118, down from $145. The firm says the company’s backlog tailwind is behind it.
• Citi downgraded Hims & Hers (HIMS) to Neutral from Buy with a price target of $20, up from $16. With the stock up 20% since the GLP-1 launch announcement, Hims & Hers has effectively added $760M of enterprise value on limited new information, leaving little room for upside, the firm tells investors in a research note.
• Oppenheimer downgraded Generac (GNRC) to Perform from Outperform without a price target. The firm believes recent strength in the shares now reflects a more reasonable anticipation of business model development prospects.
• Morgan Stanley downgraded Box (BOX) to Equal Weight from Overweight with a price target of $32, down from $35. The firm cites a lack of near-term catalysts, prolonged macro challenges impacting Box’s seat-based model, continued currency headwinds pressuring growth, and “constant competitive overhang” for the downgrade.
• Piper Sandler downgraded Digi International (DGII) to Neutral from Overweight with a price target of $29, down from $35, following a change in analysts. The company’s business transition “still has a long way to go before volatility can be significantly reduced” while its internet of things share has been stagnant, the firm tells investors in a research note.

Top 5 Initiations:

• FBN Securities initiated coverage of JFrog (FROG) with an Outperform rating and $45 price target. The DevOps market is projected by the firm to grow by well over 20% year-over-year in both 2024 and 2025 and it believes that JFrog should be able to “basically keep its market share against the prominent competitors.” UBS also started coverage of JFrog with a Buy rating and $41 price target.
• UBS initiated coverage of Couchbase (BASE) with a Neutral rating and $31 price target. The firm likes Couchbase Capella’s potential to accelerate new logo growth and support sustainable 20% annual recurring revenue growth over the coming years, but says Capella’s growth to date still appears to be primarily driven by existing installed base conversions.
• UBS initiated coverage of DigitalOcean (DOCN) with a Neutral rating and $40 price target. The firm cites the competitive backdrop of the cloud infrastructure market and DigitalOcean’s exposure to “macro-sensitive” individual and smaller customers for the Neutral rating.
• Citi reinstated coverage of Aon plc (AON) with a Neutral rating and $309 price target. The firm is cautious on the company’s organic growth underperformance, near-term disruption from the acquisition of NFP and multi-year transformation program
• UBS initiated coverage of Elastic (ESTC) with a Buy rating and $135 price target. Elastic has a better artificial intelligence opportunity than is currently priced into the stock, the firm tells investors in a research note.