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

Philip Morris upgrade, Microsoft downgrade, and Mobileye initiation among today’s top calls on Wall Street

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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.

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Top 5 Upgrades:

  • Goldman Sachs upgraded Philip Morris (PM) to Buy from Neutral with a price target of $120, up from $95. The firm sees a more favorable risk/reward at current share levels and expects the company’s long-term growth algorithm to accelerate over the next several years, with a key driver being the roll out of iQOS in the U.S. market.
  • Loop Capital upgraded Fox Corp. (FOXA) to Buy from Hold with a price target of $40, up from $34, after Rupert Murdoch withdrew his proposal to merge the company with News Corp. (NWSA).
  • Loop Capital upgraded News Corp. to Buy from Hold with a price target of $25, up from $17. Without a Fox Corp. combination, News Corp. can be valued on a sum-of-the-parts story again, the firm notes.
  • BofA upgraded Hannon Armstrong (HASI) to Neutral from Underperform with a price target of $34, down from $39. The firm expects an acceleration of higher yielding equity interests, such as the AES portfolio recently announced.
  • Wolfe Research upgraded SBA Communications (SBAC) to Peer Perform from Underperform.
    Bernstein upgraded Renault (RNLSY) to Outperform from Market Perform with a EUR 45 price target. The stock’s risk/reward balance has "improved significantly" and an extension of strong European earnings will limit cyclical downside for the shares in 2023, the firm says.

Top 5 Downgrades:

  • BMO Capital downgraded Microsoft (MSFT) to Market Perform from Outperform with a price target of $265, down from $267, following quarterly results. Until Azure growth stabilizes, the shares are likely to be range bound, the firm says.
  • Oppenheimer analyst Dominick Gabriele downgraded Block (SQ) to Perform from Outperform without a price target, citing the recent share rally and the firm’s 2024 profit estimates being significantly below consensus.
  • BofA downgraded Booking Holdings (BKNG) to Neutral from Buy with a price target of $2,700, up from $2,250. The firm’s thesis on Asia recovery "seems to be playing out as a positive driver," but Booking stock has far outperformed peers, comps will get tougher in Q2, and they now see less valuation upside looking out to the firm’s above-Street 2024 estimates.
  • Morgan Stanley downgraded Fisker (FSR) to Underweight from Equal Weight with a price target of $4, down from $8. Electric vehicles, or EVs, are passing from acute under-supply to potential over-supply and Tesla’s (TSLA) recent price cuts "are just the latest sign the EV market may be entering the ‘shake-out’ phase," the firm tells investors.
  • UBS downgraded Cheesecake Factory (CAKE) to Sell from Neutral with an unchanged price target of $30, citing the 16% rise in shares year-to-date and the firm’s expectation for a more challenged macro environment in 2023.

Top 5 Initiations:

  • Loop Capital initiated coverage of Mobileye (MBLY) with a Buy rating and $45 price target. Mobileye is already the 70% share leader in "Phase 1" – Eyes-on Hands-on ADAS Driver Assist – offering robust capability across the autonomous spectrum, the firm states, adding that the company also has an opportunity to become "synonymous with autonomous."
  • BofA initiated coverage of Papa John’s (PZZA) with a Buy rating and $103 price target. Demand for pizza has been "fundamentally unchanged by aggregators" and the firm argues that softer pizza comps reflect a normalization of demand after two years of above-trend growth.
  • BofA reinstated coverage of Bloomin’ Brands (BLMN) with a Neutral rating and $27 price target. The Outback and Carrabba’s brands are likely to drive performance, but the firm expects comps to slow as pricing actions roll off and given some level of macro risk.
  • KeyBanc initiated coverage of Stryker (SYK) with a Sector Weight rating and no price target. The firm sees Stryker’s size, competition, and the macro environment as potential limiting factors for upside to its long-term organic growth.
  • BofA initiated coverage of Lightspeed (LSPD) with a Neutral rating and $20 price target. While BofA feels Lightspeed is disrupting an underserved market within its target end-markets, its risk-reward is balanced at current levels, the firm says.
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street

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