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

Netflix upgrade, Lockheed Martin downgrade and Sunrun initiation among today’s top calls on Wall Street

Institutional investors and professional traders rely on The Fly to learn which companies the best analysts on Wall Street are saying to buy and sell.

Research analysts at Wall Street’s largest banks issue recommendations on whether a stock should be bought, held, or sold. The Fly’s team of financial market experts scours hundreds of research notes daily to uncover the best trading ideas. Check out today’s top analyst calls from around Wall Street, compiled by The Fly.

Top 5 Upgrades:

  • Atlantic Equities analyst Hamilton Faber upgraded Netflix (NFLX) to Overweight from Neutral with a price target of $283, up from $211. The upcoming advertising-supported service launch "could be extremely material" and its benefit hasn’t been reflected in consensus estimates, Faber told investors in a research note.
  • Mizuho analyst Salim Syed upgraded Biogen (BIIB) to Buy from Neutral with a price target of $270, up from $207, following the positive CLARITY AD trial data in early Alzheimer’s disease patients. Baird and BMO Capital also upgraded the stock to Buy-equivalent ratings.
  • Evercore ISI analyst Vijay Kumar upgraded Illumina (ILMN) to Outperform from In Line with a price target of $250, up from $170. The current situation has been complicated by Grail, the macro backdrop, competition, and risks to 2023 guidance, but the analyst thinks next week’s analyst day could mark a turn in how investors view Illumina.
  • CL King analyst Steven Marotta upgraded Steven Madden (SHOO) to Buy from Neutral with a $35 price target. The upgrade is based on the stock’s current valuation overlaid with the company being a Class A operator with a highly defensible business model, strong management, a "bulletproof" balance sheet and "spectacular" brand equity, Marotta told investors in a research note.
  • Piper Sandler analyst Stephen Scouten upgraded South State (SSB) to Overweight from Neutral with a price target of $96, up from $92. In the current "up-rate environment," the bank’s low-cost deposit base and strong balance sheet are "even more valuable than in the past," Scouten argued. The analyst also upgraded Truist Financial (TFC) to Overweight from Neutral with a price target of $55, up from $52.

Top 5 Downgrades:

  • Wells Fargo analyst Matthew Akers downgraded Lockheed Martin (LMT) to Underweight from Equal Weight with a price target of $415, up from $406. Akers believes the company’s portfolio is "likely to under-grow peers," particularly if Lockheed doesn’t win the Future Vertical Lift FLRAA contract where it is incumbent on Black Hawk.
  • Wells Fargo analyst Matthew Akers downgraded L3Harris Technologies (LHX) to Equal Weight from Overweight with a price target of $238, down from $272. Akers expects supply chain delays to linger and isn’t sure "what might get investors excited again" regarding shares of L3Harris Technologies.
  • Susquehanna analyst Bascome Majors downgraded CSX (CSX) and Norfolk Southern (NSC) to Neutral from Positive with price targets of $29 and $218, down from $35 and $275, respectively. Looking toward 2023, macroeconomic "clouds continue to gather," the pressure to improve rail service hasn’t eased, U.S. rail labor costs are due a markup for the tentative union agreements and the risk of a work stoppage could arise again in late November and early December, Majors told investors in a research note.
  • BofA analyst Neel Mitra downgraded Equitrans Midstream (ETRN) to Underperform from Neutral with a price target of $6.50, down from $9, as the analyst is pricing in a lower chance that the Mountain Valley Pipeline comes online as a result of the failed Manchin permitting bill and assumes if it does that won’t be before mid-2025.
  • Oppenheimer analyst Colin Rusch downgraded Avient (AVNT) to Perform from Outperform. While Avient’s pre-announcement is potentially a first of many this earnings season, the analyst believes the combination of weakening global demand, market re-ratings, and the company’s elevated debt load is likely to remain a sentiment headwind.

Top 5 Initiations:

  • Northland analyst Abhishek Sinha initiated coverage of Sunrun (RUN) with an Outperform rating and $60 price target, calling it a "high-quality business with very strong and dependable cash flows."
  • Raymond James analyst Farooq Hamed initiated coverage of Ivanhoe Electric (IE) with an Outperform rating and $12 price target. Ivanhoe Electric represents a unique offering among copper explorers and developers combining access to large potential copper projects in historically prolific mining jurisdictions in the U.S. with proprietary geophysics exploration technology that could allow for better target generation making exploration drilling more cost-effective, Hamed told investors in a research note.
  • Jefferies analyst Saree Boroditsky initiated coverage of Generac (GNRC) with a Hold rating and $190 price target. While Boroditsky calls Generac "a high-quality industrial company that has historically compounded earnings through increased penetration of home standby generators," the analyst sees risk to the 2023 outlook given that demand for generators accelerated during the pandemic and a decline into 2023 is being modeled given lower outages, a weaker housing market and a pull forward in demand.
  • Redburn analyst James Goodall initiated coverage of Sabre (SABR) with a Buy rating. Sabre’s turnaround story is underpinned by technology transition, said Goodall, who noted that his estimates are "slightly below" consensus for this year and next, but "well ahead" from fiscal 2024.
  • Cantor Fitzgerald analyst Derek Soderberg initiated coverage of Enovix (ENVX) with an Overweight rating and $25 price target. Enovix’s unique, IP-protected battery architecture and automated manufacturing process can enable the deployment of a cost-effective, industry-leading electric vehicle battery, creating a medium-term opportunity for the company to pursue a share of the $40B market for EVs, Soderberg told investors in a research note.
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street

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