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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:
- Wells Fargo analyst Joseph O’Dea upgraded Lennox (LII) to Overweight from Equal Weight with a price target of $300, up from $238. The analyst believes earnings resilience in a residential HVAC slowdown and a path to best-in-class margins can restore the historical relative valuation premium and drive Lennox outperformance.
- Wolfe Research analyst Bill Carcache upgraded Regions Financial (RF) to Outperform from Peer Perform with a $24 price target. The analyst believes Regions is better positioned relative to peers to benefit from repricing tailwinds as it remixes into higher yielding assets funded with low-beta deposits, "while providing downside protection through its best-in-class hedging strategy."
- Barclays analyst Julian Mitchell upgraded Pentair (PNR) to Overweight from Equal Weight with a price target of $55, up from $48. The analyst believes Pentair will benefit from easing supply chains and says the stock is among his key picks for residential exposure.
- Morgan Stanley analyst Alex Poon upgraded Tencent Music (TME) to Overweight from Equal Weight with a price target of $8.50, up from $4.50. He projects incremental profit from the music segment to surpass the social segment’s decline from 2023 onwards, leading to a sustainable EPS compound annual growth rate of over 10% from 2022-2024.
- Craig-Hallum analyst George Sutton upgraded eHealth (EHTH) to Buy from Hold with an unchanged price target of $6. The analyst says that "despite material declines anticipated" for this annual enrollment period, he’s seeing "clear signs of life that simply warrant a different view for the equity as a compelling investment."
Top 5 Downgrades:
- Wolfe Research analyst Alex Zukin downgraded Crowdstrike (CRWD) to Peer Perform from Outperform without a price target. The company delivered "underwhelming" Q3 earnings and provided guidance that was below expectations, Zukin tells investors in a research note.
- Wolfe Research analyst Bill Carcache downgraded U.S. Bancorp (USB) to Peer Perform from Outperform without a price target. The analyst expects the stock’s performance to be tempered by the bank’s "growth constraints" as it works to accrete capital and slow buybacks as it prepares for its Category II bank transition.
- BofA analyst Ken Hoexter downgraded Saia (SAIA) to Underperform from Neutral with a price target of $215, down from $216, following the company’s Q4-to-date tonnage and shipment update.
- Morgan Stanley analyst Betsy Graseck downgraded Capital One Financial (COF) and Synchrony (SYF) to Underweight from Equal Weight with price targets of $90 and $29, down from $115 and $31, respectively. The analyst is cautious on the consumer finance sector heading into 2023.
- Wolfe Research analyst Nigel Coe downgraded Hubbell (HUBB) to Underperform from Peer Perform with a $235 price target. The stock’s valuation "stands out as most disconnected," Coe tells investors in a research note.
Top 5 Initiations:
- Redburn analyst Nina Marques initiated coverage of Palo Alto Networks (PANW) with a Buy rating and $270 price target. The Buy rating is supported by her view of Palo Alto as the leader in its main area of network security and continued strong demand for firewall security, Marques tells investors. The analyst also started coverage of Crowdstrike with a Buy rating and a price target of $175.
- New Street analyst Pierre Ferragu initiated coverage of Mobileye (MBLY) with a Buy rating and $42 price target. Mobileye is the only autonomous driving pure-play and "very well positioned to deliver a strong performance in the near term," Ferragu tells investors.
- Janney Montgomery Scott analyst Thomas Meric initiated coverage of Sunrun (RUN) with a Neutral rating and $30 fair value estimate. The analyst expects in-line results relative to the company’s 2022 guidance and notes the shares are trading in-line with the fair value estimate.
- Janney Montgomery Scott analyst Thomas Meric initiated coverage of Sunnova Energy (NOVA) with a Buy rating and $33 fair value estimate. Sunnova is a U.S. residential solar installer and Meric expects its customer counts will grow "nicely above public peers for the next several years," with cumulative customers growing 44%, 42%, and 36% in 2022 through 2024, respectively.
- Redburn analyst Nina Marques initiated coverage of Zscaler (ZS) with a Neutral rating and $135 price target. While positive on Zscaler’s advanced technology and strong growth and cash generation, its valuation remains elevated compared with high-growth security software peers, even after a recent pullback, Marques tells investors.
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