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

Activision Blizzard upgrade, DraftKings downgrade, and Li Auto 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:

  • Morgan Stanley analyst Matthew Cost upgraded Activision Blizzard (ATVI) to Overweight from Equal Weight with a $95 price target as he took over coverage of the stock. While calling it "challenging" to assess the likelihood that Microsoft’s (MSFT) proposed acquisition receives regulatory approvals, the analyst believes the risk reward is compelling on a fully standalone basis with "a call option" of $95 in cash per share if and when the deal closes. Wells Fargo and Truist also upgraded Activision Blizzard to Buy-equivalent ratings.
  • JPMorgan analyst Jared Dinges upgraded AB InBev (BUD) to Overweight from Underweight with a price target of $70, up from $45. The analyst sees "scope for earnings outperformance" and says the company’s "rapidly deleveraging balance sheet provides optionality."
  • JPMorgan analyst Joseph Greff upgraded Wynn Resorts (WYNN) to Overweight from Neutral with a price target of $91, up from $71. The analyst thinks Wynn should benefit from a Macau recovery as COVID restrictions are eased, which he says should reverse the stock’s underperformance since the onset of the pandemic. The analyst also upgraded Melco Resorts & Entertainment (MLCO) to Overweight from Neutral with a price target of $10, up from $7.
  • Morgan Stanley analyst Adam Jonas upgraded BorgWarner (BWA) to Equal Weight from Underweight with a price target of $45, up from $35. The market will be willing to pay a higher multiple for the "longer tailed" internal combustion engine business once it becomes more evident it will be accretive to long term margins, Jonas tells investors in a research note.
  • Citi analyst Jason Bazinet upgraded Live Nation Entertainment (LYV) to Buy from Neutral with a price target of $82, down from $90. Following the recent share selloff, Bazinet says Live Nation’s risk/reward profile "looks more reasonable."

Top 5 Downgrades:

  • JPMorgan analyst Joseph Greff downgraded DraftKings (DKNG) to Underweight from Neutral with an unchanged price target of $12. The analyst sees downside in the shares following the post-earnings rally. Greff also downgraded Penn Entertainment (PENN) to Neutral from Overweight with a price target of $39, up from $38.
  • JPMorgan analyst Mark Strouse downgraded First Solar (FSLR) to Neutral from Overweight with a price target of $190, up from $147. The analyst cites the stock’s outperformance since the announcement of the U.S. Inflation Reduction Act for the downgrade.
  • Jefferies analyst Johnson Wan downgraded XPeng (XPEV) to Underperform from Hold with a price target of $4.20, down from $18.60, telling investors that he expects a "challenging year" for China’s automakers.
  • Morgan Stanley analyst Simeon Gutman downgraded Williams-Sonoma (WSM) to Underweight from Equal Weight with a price target of $100, down from $150. The company’s earnings revisions could turn "sharply negative" in 2023 with the home furnishings category "negatively inflecting" as sales volumes continue to normalize, Gutman tells investors in a research note.
  • Barclays analyst Benjamin Theurer downgraded Beyond Meat (BYND) to Underweight from Equal Weight with a price target of $10, down from $13, as he believes protein companies face a difficult outlook. The analyst also downgraded Tyson Foods (TSN) to Underweight from Equal Weight with a price target of $58, down from $89.

Top 5 Initiations:

  • Jefferies analyst Johnson Wan initiated coverage of Li Auto (LI) with a Buy rating and $20.66 price target. While Wan expects a "challenging year" for China’s automakers – citing the "honeymoon stage of early NEV adoption" coming to an end, an intensified competition under a price war led by Tesla (TSLA), and the removal of EV subsidies and rising lithium prices – the analyst calls Li his "favorite NEV startup."
  • Jefferies analyst Johnson Wan assumed coverage of Nio (NIO) with a Hold rating with a price target of $11.26, down from $42.30. Until deliveries pick up, high fixed costs from R&D and SG&A will "continue to derail" Nio’s path to profitability, Wan contends.
  • Roth Capital analyst Sean McGowan initiated coverage of Turtle Beach (HEAR) with a Buy rating and $18 price target. Besides the broader market selloff, McGowan believes Turtle Beach’s decline has two main causes, namely surprising weakness in the video game sector, leading to sales shortfalls and an industry-wide compression of stock prices; and a costly proxy fight and unsuccessful sale effort forced by an activist investor. However, the analyst thinks both of these factors will ease over the next 12-18 months.
  • Morgan Stanley analyst Matthew Cost resumed coverage of Unity (U) with an Equal Weight rating and $27.50 price target. He sees a balanced risk reward, with strong continued momentum in the Create graphics engine business seeming likely to be offset by Operate segment and advertising weakness in the near-term.
  • EF Hutton analyst Edward Reilly initiated coverage of Hudson Global (HSON) with a Buy rating and $42.50 price target. The recent decline in share price due to temporary weakness in hiring presents an "excellent opportunity to add a high-quality business with attractive long-term tailwinds, Reilly tells investors.
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street

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