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

Tapestry upgrade, Qualcomm downgrade and Coinbase 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:

• Goldman Sachs analyst Brooke Roach upgraded Tapestry (TPR) to Buy from Neutral with a price target of $44, up from $37. Top-line trends are "likely to remain lackluster," especially due to potential headwinds to the middle-income consumer following robust growth in 2022, but Roach believes Tapestry has scope to relatively outperform peers in 2023. The analyst also upgraded Gap (GPS) to Buy from Neutral with a price target of $18, up from $10.
• Goldman Sachs analyst Kate McShane upgraded Best Buy (BBY) to Neutral from Sell with a price target of $83, up from $59, implying 2% upside. The analyst sees the ability for Best Buy to improve margins in fiscal 2024 and 2025 as sales improve and as the company laps the "Total Tech" investment.
• Stifel analyst Jim Duffy upgraded Under Armour (UAA) to Buy from Hold with a price target of $12, up from $9. "Relative inventory management discipline" leaves Under Armour with better margin certainty and in a better position to bring newness to market in 2023, Duffy tells investors in a research note.
• Citi analyst Joanne Wuensch upgraded Becton Dickinson (BDX) to Neutral from Sell with a price target of $250, up from $220. Looking into 2023, "many headwinds remain" for the North America medical supplies and technology group, but these should ease in the second half of next year, alleviating operating margin pressures, Wuensch tells investors in a research note.
• Deutsche Bank analyst Sidney Ho upgraded Lam Research (LRCX) to Buy from Hold with a price target of $520, up from $400. While some risks to memory wafer fab equipment remain in the near-term, investor expectations are already low enough and should not have a significant impact on Lam’s share price, the analyst says.

Top 5 Downgrades:

• Wells Fargo analyst Gary Mobley downgraded Qualcomm (QCOM) to Underweight from Equal Weight with a price target of $105. The analyst believes that once investor sentiment toward the chip sector turns more positive, or once investors are convinced of a trough in the chip cycle, shares of companies with high smartphone exposure should underperform the broader chip sector.
• Deutsche Bank analyst Sidney Ho downgraded Micron Technology (MU) to Hold from Buy with a price target of $55, down from $60. The analyst is "incrementally more cautious" on the memory market, as he believes the current downturn will last longer and be more severe than we previously forecasted.
• Roth Capital analyst Edward Engel downgraded DraftKings (DKNG) to Neutral from Buy with a $15 price target. The analyst cites concerns that Fanatics’ Q1 OSB launch can disrupt the profitability narrative.
• Goldman Sachs analyst Kate McShane downgraded Ulta Beauty (ULTA) to Neutral from Buy with a price target of $508, down from $511. The company’s market share gains from here are likely to be "more limited" and it faces difficult year-over-year compares following a strong 2022, McShane tells investors in a research note. The analyst also downgraded RH (RH) to Sell from Neutral with a price target of $215, down from $227.
• Citi analyst Patrick Donnelly downgraded Illumina (ILMN) to Sell from Neutral with a price target of $180, down from $200. Going into 2023, the analyst views sentiment across the life science tools space as "relatively mixed following several years of outperformance." Donnelly also downgraded Labcorp (LH) to Neutral from Buy with a price target of $250, down from $275.

Top 5 Initiations:

• KeyBanc analyst Alex Markgraff initiated coverage of Coinbase (COIN) with a Sector Weight rating. Markgraff believes positive marks for a highly scalable model, innovative suite of products/services, and market share gains are balanced by limited revenue visibility tied to crypto asset prices/volume/volatility and industry headwinds leading to depressed crypto asset prices and market activity.
• Northland analyst Ted Jackson initiated coverage of Allied Motion Technologies (AMOT) with an Outperform rating and $45 price target. Allied Motion is a leader in motion control solutions and technology with a focus on the higher end of its addressable market segments, which drives above industry average sales growth, while also being an industry consolidator "adept at accentuating growth through strategic acquisitions," Jackson tells investors.
• Jefferies analyst Andrew Anderson initiated coverage of Palomar (PLMR) with a Hold rating and $55 price target. Anderson thinks the stock already reflects growth and risks.
• Jefferies analyst Andrew Anderson initiated coverage of Kinsale Capital Group (KNSL) with a Hold rating and $295 price target. Anderson expects Kinsale to continue to post above commercial P&C peer growth and margins due to a strong run of results, but thinks shares already reflect stronger growth/margins and lower volatility compared to peers.
• Credit Suisse analyst Fahad Tariq initiated coverage of Royal Gold (RGLD) with a Neutral rating and $120 price target. The analyst notes the stock has outperformed seniors Franco-Nevada (FNV) and Wheaton Precious Metals (WPM) in 2022, and he sees the current valuation as fair.

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