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

McCormick upgrade, Airbus downgrade, and Activision assumption 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:

  • Bernstein upgraded McCormick (MKC) to Outperform from Market Perform with a $90 price target. The analyst expects a recovery in the company’s fundamental performance over the course of the 2023.
  • UBS upgraded General Mills (GIS) to Buy from Neutral with a price target of $88, up from $85. The stock has underperformed the large-caps on concerns that structural headwinds are forming in the Pet category, but these fears are misplaced given the long-term runway for premiumization of pet products on "humanization of pet trends" and the near-term visibility to margin recovery in the segment, the analyst tells investors in a research note.
  • Wedbush upgraded Chewy (CHWY)  to Outperform from Neutral with a price target of $55, up from $35. The firm expects acceleration in net adds and continued material improvement in EBITDA margins as Chewy "turns the corner." 
  • MoffettNathanson upgraded Take-Two (TTWO) to Outperform from Market Perform with a $140 price target. 2022 was "a dreadful year for Take-Two’s stock," but after the "highly disappointing 2022," it’s "back to the future" for Take-Two, said the firm, which thinks upward estimate revisions and multiple expansion can drive the stock higher from here with the "long-awaited content cycle near at hand."
  • Argus upgraded Las Vegas Sands (LVS) to Buy from Hold with a $68 price target. The company is expected to benefit from the end of China’s strict COVID rules, with authorities having eased travel restrictions late last year, the analyst tells investors in a research note.

Top 5 Downgrades:

  • Jefferies downgraded Airbus (EADSY) to Hold from Buy with a price target of EUR 130, down from EUR 135. The analyst said that, ahead of FY22 results due on February 16, the debate now moves onto what a conservative guide for 2023 could look like. Kepler Cheuvreux analyst Aymeric Poulain also downgraded Airbus to Reduce from Hold with a EUR 111 price target.
  • UBS downgraded Polaris (PII) to Neutral from Buy with a price target of $112, down from $165. The firm sees risk to guidance that retail sales would be positive in Q4 and believes that the top-line opportunity of restocking the channel will be mostly behind after Q1, as dealer checks indicate much better inventory availability in the dealer network outside of a few of the higher-end SSV models, the analyst tells investors in a research note.
  • BMO Capital downgraded Ralph Lauren (RL) to Underperform from Market Perform with a price target of $100, up from $96. While the company has one of the strongest brand/management teams among its peers that essentially architected the "Sell Less, Charge More" strategy, after a 50% 4-month rally, the stock is nearly back to pandemic-peaks, the analyst tells investors in a research note.
  • Goldman Sachs downgraded Hess Corp. (HES) to Neutral from Buy with a higher price target of $170, up from $161. The analyst has a "highly positive" view on Guyana and the unique cash flow growth potential for the company, but the stock has been a multi-year winner since being added to the firm’s Buy List on March 16, 2020, returning +417% vs. the S&P +70% and the XLE +235%, the firm tells investors in a research note.
  • Wolfe Research downgraded Northrop Grumman (NOC) to Peer Perform from Outperform and removed its prior $580 price target after the company’s Q4 report brought "an unwelcome question on profitability" about one of the company’s largest contracts, the B-21. With the stock at the high end of its trading range, and against a backdrop where fears of slowing defense budget growth have entered the debate, the firm fears that the B-21 overhang might not be going away quickly and it moves to the sideline given lower estimates and questions about a margin recovery.

Top 5 Initiations:

  • Wedbush assumed coverage of Activision Blizzard (ATVI) with an Outperform rating and $95 price target. The firm continues to expect Microsoft (MSFT) to close its proposed acquisition of Activision Blizzard over the next several months, and once the companies sign legally binding agreements that address concepts such as game availability, pricing, quality, and release timing, regulatory concerns around the potential for lessening of competition should largely subside, paving the way for the deal’s completion in relatively short order, the analyst tells investors in a research note.
  • Guggenheim initiated coverage of MongoDB (MDB) with a Neutral rating and $205 price target. MongoDB has been "a standout NoSQL database vendor," said the firm, which believes the company will continue to benefit from high growth in the NoSQL market, but at slowing rates.
  • Citi initiated coverage of (BILL) with a Buy rating and $131 price target. is a "scarce" pure-play on business-to-business commerce digitization and intelligence for smaller businesses, the analyst tells investors in a research note.
  • Craig-Hallum initiated Flutter Entertainment (PDYPY) with a Buy rating and 165 GBp price target. The firm expects a fundamental inflection in 2023 with EBITDA growing 50% this year and again in 2024, and thinks Flutter is a stock to own given its double-digit revenue growth, meaningful margin expansion and strong free cash flow, the analyst tells investors in a research note.
  • Guggenheim initiated coverage of Commvault (CVLT) with a Buy rating and $86 price target, which implies about 50% potential upside from current levels. Commvault may have been "written off" as "a share donor in what is perceived as a commodity market for on-premise data protection software," but beneath the surface, Commvault has a best-in-class product portfolio, including a cloud-native Metallic product that is still growing at a rate greater than 100%, the firm said.
Keywords: analyst, analyst calls, upgrades, downgrades, initiations, research, wall street

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