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

Roblox upgrades, Block downgrade, and DLocal 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: 

• Benchmark upgraded Roblox (RBLX) to Buy from Hold and introduced a $45 price target following the company’s Q1 report. While Roblox reported "mixed" results, including missing the consensus view on profitability in the quarter, it delivered "strong" net bookings growth that continues to accelerate and a "solid return" to positive operating cash flow and free cash flow, the firm says. [Read more] Roth MKM also upgraded Roblox to Buy from Neutral with a price target of $48, up from $37. [Read more]
• Credit Suisse upgraded RingCentral (RNG) to Outperform from Neutral with a price target of $45, up from $40, following the "strong" Q1 report. The company is structurally improving its profitability profile and increased its free cash flow outlook, pulling forward year-end 2024 targets by a year, the firm notes. [Read more]
• JPMorgan upgraded J.B. Hunt Transport Services (JBHT) to Overweight from Neutral with a price target of $204, up from $200. The firm believes J.B. Hunt should benefit from recent progress on a West Coast port labor deal, improving rail service, and the end of inventory de-stocking. [Read more]
• JPMorgan upgraded Axon (AXON) to Overweight from Neutral with an unchanged price target of $236. The firm tells investors to take advantage of the 15% decline in the stock price on Wednesday post the earnings print. [Read more]
• Susquehanna upgraded International Game Technology (IGT) to Positive from Neutral with a price target of $31, up from $25. The firm’s estimates are higher after what it says has been "impressive execution by management over the past few quarters" and it also sees downside protection from International Game’s global lottery portfolio, which it calls "notoriously stable in historical downturns." [Read more]

Top 5 Downgrades:

• CLSA downgraded Block (SQ) to Underperform from Buy with a price target of $63, down from $93. The firm says concerns around the macro environment now eclipse its ongoing enthusiasm around the company’s prospects for long-term growth. [Read more]
• Goldman Sachs downgraded Twilio (TWLO) to Neutral from Buy with a price target of $53, down from $90. The firm says its Buy thesis overestimated the durability of the company’s revenue growth, which has since fallen to mid-single digits, as well as the early traction with its software segments. [Read more]
• Goldman Sachs downgraded RingCentral to Neutral from Buy with a price target of $37, down from $52. While encouraged by RingCentral’s emphasis on accelerating profitability, the firm believes this marks a pivot from a growth company to a more mature operational profile. [Read more]
• Goldman Sachs downgraded TechTarget (TTGT) to Sell from Neutral with a price target of $27, down from $52. The company doesn’t screen favorably when comparing subscription-based revenue models across the software space, the firm says. [Read more]
• Barclays downgraded Northrop Grumman (NOC) to Equal Weight from Overweight with a price target of $450, down from $580. Northrop’s margins are likely to deteriorate more than expected, diluting a significant portion of growth that is seen on the outlook for B-21/GBSD, the firm says. [Read more]

Top 5 Initiations:

• Barclays initiated coverage of DLocal (DLO) with an Underweight rating and $10 price target. While the company has a valuable product offering, it competes directly with several companies with a similar payments focus as well as significantly larger, mainline payment processors that have similar overlaps in functionality, the firm says. [Read more]
• Barclays initiated coverage of PagSeguro Digital (PAGS) with an Overweight rating and $16 price target. The firm likes the company’s "ambitious but focused strategy" of integrating its own consumer- and merchant focused digital bank into its payment processing service and moving "upstream" by signing larger merchants as clients. [Read more]
• Barclays initiated coverage of StoneCo (STNE) with an Equal Weight rating and $13 price target. The firm notes that StoneCo’s 2021 acquisition of Linx had fewer immediate benefits than hoped and channel checks indicate the company should have moved more cautiously before making such a large acquisition. [Read more]
• Citi initiated coverage of Integer (ITGR) with a Neutral rating and $88 price target, citing valuation. [Read more]
• Advantage Solutions’ (ADV) coverage was assumed at Morgan Stanley with an Equal Weight rating and $3 price target following the company’s report of what the firm describes as "a solid quarter." [Read more]