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

Lyft upgrade, AMD downgrade, and Target 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.

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Top 5 Upgrades:

  • KeyBanc upgraded Lyft (LYFT) to Overweight from Sector Weight with a $24 price target as ridesharing data "appears stable," with Lyft data actually improving over the course of December.
  • UBS upgraded Universal Health (UHS) to Neutral from Sell with a price target of $167, up from $113. The firm applied a defensive framework and assessed the strength and resiliency of companies’ financials and stock valuations as macroeconomic conditions may come under further pressure.
  • JPMorgan upgraded Blackstone (BX) to Overweight from Neutral with a price target of $105, up from $104. The firm sees a retail franchise "still intact and positioned for stronger growth" over the intermediate term, as well as a real estate franchise "with such good performance from which we expect growth even if the asset class falls from favor."
  • Stifel upgraded Xylem (XYL) to Buy from Hold with a price target of $124, up from $115, after the company entered into a definitive agreement to acquire Evoqua (AQUA) in an all-stock transaction.
  • Citi upgraded Intellia Therapeutics (NTLA) to Neutral from Sell with a price target of $39, down from $48, citing the recent share price decline and the overall potential of the company’s platform.

Top 5 Downgrades:

  • Bernstein downgraded AMD (AMD) to Market Perform from Outperform with a price target of $80, down from $95. The PC environment "has grown considerably worse" since Bernstein’s upgrade AMD shares in February of last year, and the firm’s belief AMD would prove relatively more immune to channel degradation proved incorrect.
  • Bernstein downgraded Lululemon Athletica (LULU) to Underperform from Market Perform with a price target of $290, down from $340. The firm says that with no more pent-up demand, a more cautious consumer outlook, and negative margin mix shifts, the company’s earnings growth will decelerate "materially."
  • Baird downgraded Peloton Interactive (PTON) to Neutral from Outperform with a price target of $12, down from $14. Baird believes the current environment, including signs of accelerated return to gyms, could cause Peloton to guide its March quarter below consensus and lengthen the time needed to restore "healthy profitability."
  • Raymond James downgraded Cheesecake Factory (CAKE) to Market Perform from Outperform to reflect continued concerns regarding the company’s ability to recover pre-COVID margins. The firm also downgraded Dine Brands (DIN) to Market Perform from Outperform.
  • Vertical Group downgraded Trade Desk (TTD) to Neutral from Positive. Worries about weaker consumer spending have advertisers cutting costs and further deceleration is expected in Q1 with ad auctions being less competitive market wide, the firm said.

Top 5 Initiations:

  • Oppenheimer initiated coverage of Target (TGT) with an Outperform rating and $190 price target. While some bumps along the way against seemingly aggressive Street forecasts for FY23 could be expected, Target is well positioned to continue capturing share, the firm tells investors in a research note.
  • Wells Fargo initiated coverage of Starbucks (SBUX) with an Overweight rating and $120 price target. The company "leads a high-growth global category with big aspirations," said the firm, which sees multi-year upside given "robust" coffee fundamentals, a global economic recovery and re-opening, share gains, unit growth, and innovation. Wells Fargo also started coverage of Yum! Brands (YUM) and Chipotle (CMG) with Overweight ratings, and Restaurant Brands (QSR), Domino’s Pizza (DPZ), Darden (DRI), and McDonald’s (MCD) with Equal Weight ratings. 
  • JPMorgan initiated coverage of Palo Alto Networks (PANW) with an Overweight rating and $195 price target as it sees a "compelling setup" for the shares with 20% year-over-year revenue growth in 2023, expanding margins, "healthy" cash flow margins and a focus on shareholder return. The firm also placed Palo Alto on JPMorgan’s U.S. Equity Analyst Focus List as a growth pick. Additionally, JPMorgan started coverage of Crowdstrike (CRWD), SentinelOne (S), Fortinet (FTNT), and Okta (OKTA) with Overweight ratings.
  • JPMorgan initiated coverage of Check Point Software (CHKP) with a Neutral rating and $134 price target. Although the company’s valuation remains below peer averages, it continues to grow at a fraction of peer growth rates in spite of the greatest level of network security demand we’ve seen in years, the firm notes. JPMorgan also started coverage of Zscaler (ZS), Tenable Holdings (TENB), Rapid7 (RPD), and CyberArk (CYBR) with Neutral ratings, and Qualys (QLYS) and Varonis (VRNS) with Underweight ratings.
  • KeyBanc initiated coverage of Virgin Galactic (SPCE) with a Sector Weight rating and no price target. Executing to achieve the company’s long-term targets could yield attractive economics for the business, but near-term visibility surrounding its commercial service timeline and future capital requirements "remains cloudy," the firm argues.
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street

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