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

General Electric upgrade, Royal Caribbean downgrade, and Walmart 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:

• Oppenheimer analyst Christopher Glynn upgraded General Electric (GE) to Outperform from Perform with a $104 price target based on 2024 estimates, and assuming 12-times EV/EBITDA for Healthcare (GEHC), 13-times for Aviation, and 8-times for combined Power & Renewable Energy/RE, discounted back one year at 12%.
• Deutsche Bank analyst Steve Powers upgraded Estee Lauder (EL) to Buy from Hold with a price target of $266, up from $209. The analyst sees increased likelihood of China reopening by the start of Estee’s fiscal 2024 and has increased confidence in its makeup margin expansion.
• Argus analyst John Staszak upgraded United Airlines (UAL) to Buy from Hold with a $52 price target. Demand for air travel should continue to recover from the pandemic with "strong growth" expected in business and international travel, the analyst tells investors in a research note.
• Morgan Stanley analyst Betsy Graseck double upgraded JPMorgan (JPM) to Overweight from Underweight with a price target of $153, up from $126. The bank’s operating leverage is inflecting positively in 2023, driven by revenues up 10% year-over-year and expenses up 9%, Graseck tells investors in a research note.
• Wells Fargo analyst Michael Kaye upgraded PennyMac Financial (PFSI) to Overweight from Equal Weight with a price target of $75, up from $54, as he believes the backdrop for the mortgage industry has turned more favorable.

Top 5 Downgrades:

• JPMorgan analyst Daniel Adam double downgraded Royal Caribbean (RCL) to Underweight from Overweight with a price target of $47, down from $106, after assuming coverage of the name. Despite roughly $10B of capital raises so far this year and free cash flow generation that should cover most, but not all, of its future commitments, Royal could face a $400M funding shortfall by the end of next year, Adam tells investors in a research note.
• GLJ Research analyst Gordon Johnson double downgraded First Solar (FSLR) to Sell from Buy with a price target of $46.80, down from $138.40. The shares are "priced for perfection" into a "(very) imperfect environment," Johnson tells investors in a research note.
• Oppenheimer analyst Christopher Glynn downgraded Snap-On (SNA), TE Connectivity (TEL), and Eaton (ETN) to Perform from Outperform without a price target. The analyst cites valuation for the downgrade with the shares near the firm’s prior price target "in an environment with limited capacity to argue for multiple expansion or earnings upside."
• Deutsche Bank analyst Steve Powers downgraded Boston Beer (SAM) to Sell from Hold with a price target of $316, up from $315. The analyst sees the company "grappling with persistent softness in the core hard seltzer category." Powers also downgraded Kimberly-Clark (KMB), Molson Coors (TAP), Conagra Brands (CAG), and Flowers Foods (FLO) to Sell from Hold.
• Deutsche Bank analyst Steve Powers downgraded General Mills (GIS) to Hold from Buy with an unchanged price target of $88, citing valuation. While he continues to believe General Mills "operates from a position of relative advantage," he also sees current market expectations "well-aligned with this view." The analyst also downgraded Spectrum Brands (SPB) to Hold from Buy with a price target of $70, up from $63.

Top 5 Initiations:

• Bernstein analyst Dean Rosenblum initiated coverage of Walmart (WMT) with a Market Perform rating and $159 price target. The analyst is "cautiously bullish" on the U.S. hardlines/broadlines retail sector. Rosenblum also started coverage of Home Depot (HD), and Lowe’s (LOW) with Market Perform ratings, while initiating Floor & Décor (FND), Costco (COST), Target (TGT), Albertsons (ACI), and Kroger (KR) with Outperform ratings.
• Susquehanna analyst Christopher Stathoulopoulos initiated coverage of Hertz Global (HTZ) and Avis Budget (CAR) with a Neutral rating and $18 price target as he expanded his coverage of the Travel and Leisure industry. Pent-up demand and supply chain pressures have allowed both to over-earn and the duration of that situation underpins the investment debate, says Stathoulopoulos, who expects conditions to gradually normalize.
• UBS analyst Ashwani Verma initiated coverage of United Therapeutics (UTHR) with a Buy rating and $320 price target. The analyst sees the company’s Tyvaso as a foundational therapy for Pulmonary Arterial Hypertension, and believes Tyvaso’s transition into newly launched dry powder inhaler format and expansion into PH-Interstitial Lung Disease fuels growth.
• Wells Fargo analyst Michael Blum initiated coverage of Array Technologies (ARRY) with an Overweight rating and $28 price target. The analyst projects Array to grow revenues at a CAGR of 10%, driven by policy support, Solar’s low cost, and state/federal utility mandates to de-carbonize and achieve net zero targets.
• Cowen analyst Charles Rhyee initiated coverage of Veeva Systems (VEEV) with a Market Perform rating and $184 price target. The analyst views Veeva as a market leader in the life sciences commercial industry but believes the stock’s valuation fairly reflects its near-term fundamentals.

Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street