Street Wrap: Today’s Top 15 Upgrades, Downgrades, Initiations

Netflix upgrade, Rivian downgrade, and GE Healthcare initiation among today’s top calls on Wall Street

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:  

• UBS upgraded Netflix (NFLX) to Buy from Neutral with a price target of $390, up from $350, following quarterly results. The firm sees Netflix as the main beneficiary of easing competition in direct-to-consumer streaming as peers focus on profits. [Read more]
• Gordon Haskett upgraded Walmart (WMT) to Buy from Accumulate with a price target of $165, up from $155. Walmart’s foot traffic growth has improved sequentially in April by 1,120 basis points to 0.7% on a four-year basis, outperforming the firm’s coverage and broader retail, notes Gordon Haskett, which thinks the company is likely benefiting from increasing wallet share from core customers in a softening macro backdrop and gaining share with higher-income customers. [Read more]
• Baird upgraded Global Payments (GPN) to Outperform from Neutral with a price target of $156, up from $130. The company is maintaining market share, Q1 industry trends seem "quite good" and a mid-2024 valuation for the stock could be $156, the firm says. [Read more]
• Benchmark upgraded Spirit AeroSystems (SPR) to Buy from Neutral with a $45 price target. With growing backlog visibility spurred by recent mega airline orders coupled with an overreaction to Spirit’s "non-standard" installation announcement, "now is the time to play SPR," contends the firm. [Read more]
• BofA upgraded Trex Company (TREX) to Neutral from Underperform with a price target of $54, up from $47. Following a challenging 2022 for decking, the composite decking industry is poised to recover in the second half of 2023, the firm says. [Read more]

Top 5 Downgrades:

• RBC Capital downgraded Rivian Automotive (RIVN) to Sector Perform from Outperform with a price target of $14, down from $28. While the firm argues that Rivian is "well positioned to capture market share as the industry shift towards electrification", in the near-term it sees limited catalysts to accelerate profitability and believes the company’s margins will "remain constrained." [Read more]
• RBC Capital downgraded Magna (MGA) to Sector Perform from Outperform with a price target of $52, down from $58. The firm believes more meaningful margin and free cash flow improvements may not occur until 2025. [Read more]
• BofA downgraded CDW (CDW) to Neutral from Buy with a price target of $200, down from $240, after the company negatively pre-announced Q1 revenue below the Street’s and the firm’s forecasts. [Read more]
• Craig-Hallum downgraded Extreme Networks (EXTR) to Hold from Buy with a price target of $17.50, down from $22, following CDW negative pre-release. Craig-Hallum is "surprised by the magnitude of the more cautious spending outlook shift," which in turn makes it more cautious regarding Extreme Network’s previous outlook for the company’s demand to remain strong and its backlog to remain stable for several quarters before beginning to be worked down. [Read more]
• JPMorgan downgraded Mytheresa (MYTE) to Neutral from Overweight with a price target of $7, down from $9, after the company preannounced a reduction in FY23 outlook for gross merchandise volume growth, gross profit dollar growth and adjusted EBITDA margin as management acknowledged ongoing macro pressure.  [Read more]

Top 5 Initiations:

• Piper Sandler initiated coverage of GE HealthCare (GEHC) with an Overweight rating and $95 price target. The recent spinoff from GE (GE) gives GE HealthCare the independence and focus to transform into a "more nimble, faster-growing, and more profitable entity," the firm says. [Read more]
• Argus initiated coverage of Chewy (CHWY) with a Hold rating. The firm believes Chewy will likely face earnings pressure in the near term from a post-pandemic decline in online ordering, substantial investment spending, and weaker economic conditions. [Read more]
• William Blair resumed coverage of Splunk (SPLK) with an Outperform rating and no price target. The company has significant growth opportunities in the observability, cybersecurity, and core machine search markets, the firm says. [Read more]
• William Blair resumed coverage of Cloudflare (NET) with an Outperform rating and no price target. The firm believes the company can continue to sustain growth while delivering operating leverage over the long term. [Read more]
• William Blair resumed coverage of Fastly (FSLY) with a Market Perform rating and no price target as it would like to see faster growth in new enterprise customers. [Read more]