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

AutoZone upgrade, Target downgrade, and Gartner 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: 

• BofA upgraded AutoZone (AZO) to Neutral from Underperform with a price target of $2,465, up from $2,120. While the market was disappointed by the deceleration in sales growth this past quarter, the firm came away from the report noting "a number of positives" and cites the stock’s pullback over the last several trading days following earnings for a more balanced rating. [Read more]
• JPMorgan upgraded Domino’s Pizza (DPZ) to Overweight from Neutral with a price target of $360, up from $340. A fresh look at estimates shows the stock is "too cheap" for Domino’s "structurally low cost delivery" at $6.99 for a medium two-topping and take-out provider for a $7.99 3-topping large pizza, the firm says. [Read more]
• BofA upgraded Genuine Parts (GPC) to Buy from Neutral with a price target of $189, up from $185. Among the "big 4" auto parts retailers, Genuine has "a unique opportunity to capitalize on two growth trends" given that it is the only company among its peers with exposure to new vehicle production and it has an opportunity to benefit from a favorable automation capex cycle, the firm tells investors. [Read more]
• Wedbush upgraded C3.ai (AI) to Outperform from Neutral with a price target of $50, up from $24. While it will be a bumpy road, the firm believes C3.ai has turned a corner and is ready to now capitalize on the $800B AI transformational opportunity over the next decade. [Read more]
• GLJ Research upgraded First Solar (FSLR) to Hold from Sell with a $157.56 price target. While the firm believes the solar industry is in the "beginning innings of one of the most severe supply surpluses its ever seen," it calls First Solar the "best house on a (very) bad block" in light of its "enviable position" due to President Biden’s Inflation Reduction Act "giveaways." [Read more]

Top 5 Downgrades:

• JPMorgan downgraded Target (TGT) to Neutral from Overweight with a price target of $144, down from $182. The firm believes the consumer is "broadly weakening," while the share of wallet shift away from goods, which represents 51% of Target’s sales, is ongoing. [Read more]
• Raymond James double downgraded Advance Auto Parts (AAP) to Market Perform from Strong Buy following  a "disappointing" Q1 performance and negatively revised outlook. [Read more] BofA [Read more], JPMorgan [Read more] and Goldman Sachs [Read more] also downgraded the stock to Neutral-equivalent ratings.
• BMO Capital downgraded Okta (OKTA) to Market Perform from Outperform with a price target of $85, down from $94, following quarterly results. The company’s mid-teens growth, or lower, leaves limited upside in the shares, the firm says. [Read more] JPMorgan also downgraded Okta to Neutral from Overweight with a price target of $85, down from $95. [Read more]
• Barclays downgraded Johnson Controls (JCI) to Equal Weight from Overweight with an unchanged price target of $70. Long cycle exposure is easier to own for now, but this will likely reverse heading into 2024, the firm tells investors in a research note. [Read more]
• RBC Capital downgraded Exxon Mobil (XOM) to Sector Perform from Outperform with an unchanged price target of $125. From here, Exxon Mobil’s earnings momentum and risk/reward are more balanced, the firm contends. [Read more]

Top 5 Initiations:

• UBS initiated coverage of Gartner (IT) with a Neutral rating and $368 price target. While Gartner is a strong and resilient business with significant runway for growth beyond its current Contract Value of $4.5B, the firm forecasts CV growth to moderate to +9% in 2023 from +12% in 2022, slightly below consensus of +10%. [Read more]
• BofA initiated coverage of Toast (TOST) with a Buy rating and $26 price target. The firm sees an opportunity for Toast to capture additional market share given that it has captured only about 10% of an estimated 860,000 U.S. restaurants. [Read more]
• HSBC initiated coverage of Kenvue (KVUE) with a Hold rating and $27 price target. HSBC views the stock as fairly valued at current levels. [Read more]
• UBS initiated coverage of Bright Horizons (BFAM) with a Sell rating and $79 price target. Consensus expects EBIT margin expansion in 2024 that is "well above" the firm’s forecast, UBS notes. [Read more]
• Macquarie initiated coverage of MSG Entertainment (MSGE) with an Outperform rating and $43 price target. The company’s legacy entertainment business can now be more easily appreciated by the market for the "quality, cash-flowing assets it has," the firm tells investors in a research note. [Read more]