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

Zions Bancorp upgrade, Target downgrade and Citizens Financial 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:

• DA Davidson analyst Peter Winter upgraded Zions Bancorp (ZION) to Buy from Neutral with an unchanged price target of $56. The analyst believes the bank’s net interest income will come in above consensus in Q3 and increase throughout 2023.
• DA Davidson analyst Peter Winter upgraded Comerica (CMA) to Buy from Neutral with a price target of $80, up from $78. The analyst argues that if the U.S. economy enters a mild recession, investor focus will turn to credit and Comerica has a long track record of best-in-class credit metrics.
• New Street analyst Soomit Datta upgraded PagSeguro Digital (PAGS) to Buy from Neutral with a price target of $17, down from $22. The analyst believes sentiment on the stock "can’t have ever been lower," and sees close to 100% upside in the shares.
• Jefferies analyst Andy Barish upgraded Chefs’ Warehouse (CHEF) to Buy from Hold with an unchanged price target of $43. The analyst maintains a positive view on the U.S. restaurant and foodservice distribution sector into 2023, but turned more selective to reflect greater chance of a recession next year.
• Piper Sandler analyst David Westenberg upgraded Adaptive Biotechnologies (ADPT) to Overweight from Neutral with a price target of $14, up from $7.50. If the company can grow minimal residual disease revenue at 50% as is expected in 2023, the stock would deserve a 10-times revenue multiple on its MRD business, Westenberg tells investors in a research note.

Top 5 Downgrades:

• Gordon Haskett analyst Chuck Grom downgraded Target (TGT) to Hold from Buy with a $132 price target. Target’s traffic levels have "meaningfully eroded over the past two months after a long stretch of very strong results," Grom tells investors in a research note.
• Jefferies analyst Andy Barish downgraded Starbucks (SBUX) to Hold from Buy with an unchanged price target of $100. The analyst maintains a positive view on the U.S. restaurant and foodservice distribution sector into 2023, but is less positive on limited-service restaurants, citing mixed same-store-sales and margin trends. Barish also downgraded Red Robin (RRGB) and Brinker (EAT) to Hold from Buy.
• Truist analyst Naved Khan downgraded Carvana (CVNA) to Hold from Buy with a price target of $5, down from $50. The analyst cites the risk to equity holders from a potential debt restructuring, which could happen if the company’s management looks to bring high debt servicing costs under control as the business continues to face headwinds from a tough macro environment. Khan also downgraded Opendoor Technologies (OPEN) and Redfin (RDFN) to Hold from Buy.
• Wedbush analyst Nick Setyan downgraded Jack in the Box (JACK) to Neutral from Outperform with a price target of $75, down from $100. The analyst views Jack in the Box’s current valuation as a reflection of a relatively less favorable value offering at JIB, ongoing uncertainty regarding Del Taco’s refranchising path/its potential impact on estimates, and relatively less visibility into margin trends. Setyan also downgraded Papa John’s (PZZA), Shake Shack (SHAK), Denny’s (DENN), and One Group Hospitality (STKS) to Neutral from Outperform.
• Wolfe Research analyst Gal Munda downgraded Roblox (RBLX) to Underperform from Peer Perform with a $24 price target. The company’s "disappointing" November metrics potentially provide concern in company execution, Munda tells investors in a research note. The analyst also downgraded Palantir (PLTR) to Underperform from Peer Perform with a $4.50 price target. 

Top 5 Initiations:

• DA Davidson analyst Peter Winter initiated coverage of Citizens Financial (CFG) with a Buy rating and $47 price target and also designates the stock as his Top Pick. The analyst is positive on the company’s "low valuation" while noting that the fears around credit risk, deposit betas and integration risk with its latest acquisitions are overdone.
• DA Davidson analyst Peter Winter initiated coverage of U.S. Bancorp (USB) with a Neutral rating and $47 price target. The company is intentionally managing the size of the balance sheet in order stay below $700B in assets for four consecutive quarters so as to delay becoming a Category II bank, since that comes with "more onerous" capital restrictions, the analyst tells investors in a research note. Winter also started coverage of KeyCorp (KEY), Regions (RF), and Cullen/Frost (CFR) with Buy ratings, and Huntington Bancshares (HBAN), New York Community Bancorp (NYCB), Fifth Third (FITB), and M&T Bank (MTB) with Neutral ratings.
• Barclays analyst Matt Miksic initiated coverage of Bausch + Lomb (BLCO) with an Equal Weight rating and $17 price target. While Bausch’s "strong brands" in contact lenses, vision care and ophthalmic pharma will likely deliver solid growth in 2023, the analyst notes there a "several key events which may significantly impact stock performance over the next 12 months," including the spinoff timing, approval, launch and initial traction of NOVO3 for dry eye, and the management transition.
• Evercore ISI analyst Greg Melich initiated coverage of BJ‘s Wholesale Club (BJ) with an In Line rating and $70 price target. The analyst says that while he’d like to own BJ’s longer-term, a fee hike to accelerate membership fee income is unlikely until 2024.
• Barclays analyst Matt Miksic initiated coverage of ZimVie (ZIMV) with an Underweight rating and $9 price target. The company’s dental business has been relatively stable, but its spine business has struggled, declining double digits in a flat or low single digit growth market, Miksic tells investors in a research note.

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