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

Spotify upgrade, Universal Health downgrade, and Johnson & Johnson initiation among today’s top calls on Wall Street

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Check out today’s top analyst calls from around Wall Street:

Top 5 Upgrades:

• Redburn upgraded Spotify (SPOT) to Buy from Neutral with a new fair value estimate of $140 per share. The firm forecast gross margins of 26.7% in 2023 and 30.4% in 2026, which are each higher than consensus, supported by waning headwinds from investments, publishing royalty increases and marketplace growth. [Read more]

• UBS upgraded Procter & Gamble (PG) to Buy from Neutral with a price target of $163, up from $157. The firm views earnings growth concerns as misplaced and believes an earnings inflection is on the horizon looking out to fiscal 2024. [Read more]

• UBS upgraded Philip Morris (PM) to Buy from Neutral with a price target of $116, up from $106. The firm expects an acceleration of heated tobacco products shipment growth in mature markets due to Iluma and likes the "strong cash flow" in the company’s combustible business. [Read more]

• Benchmark upgraded MKS Instruments (MKSI) to Buy from Hold with a $125 price target. An expected cyclical upswing in 2024, combined with the ramp of new fabs and funding by the U.S., Europe, and Japan for internal chip production, is seen lifting non-GAAP earnings to $8.01 per share, the firm says. [Read more]

• Morgan Stanley upgraded Sarepta Therapeutics (SRPT) to Overweight from Equal Weight with a price target of $187, up from $141. The firm already had a bias of early approval for SRP-9001, but says information management shared from their mid-cycle review increases confidence in approval on the May 29 FDA action date. [Read more]

Top 5 Downgrades:

• Wolfe Research downgraded Universal Health (UHS) to Peer Perform from Outperform and removed the firm’s previous $167 price target following Q4 results and full year 2023 guidance that came in below expectations. [Read more]

• Craig-Hallum downgraded Grocery Outlet (GO) to Hold from Buy with a price target of $29, down from $53. While Q4 results were solid, Grocery Outlet provided disappointing full year 2023 guidance on sales, margins, EPS and unit development, the firm notes. [Read more]

• Bernstein downgraded Spirit AeroSystems (SPR) to Market Perform from Outperform with a price target of $38, down from $46. The firm also reduced the company’s outlook for margins and cash flow, citing concerns regarding its operational performance. [Read more]

• JPMorgan downgraded iHeartMedia (IHRT) to Underweight from Neutral with a price target of $5, down from $10. The company reported "mixed" Q4 results and offered weaker than expected Q1 guidance, the firm notes. [Read more]

• JPMorgan downgraded Marqeta (MQ) to Neutral from Overweight with a price target of $6, down from $9. The firm likes the strategic value and long-term operational improvements being put in place at Marqeta, but feels it is time to move to the sidelines given trade-off of lower near-term growth with longer-term certainty due to stepped up renewals that surprised to the downside. [Read more]

Top 5 Initiations:

• Guggenheim initiated coverage of Johnson & Johnson (JNJ) with a Neutral rating and $161 price target. While the firm agrees with the company’s decision to proceed with the Consumer Health separation, and believes the MedTech segment is showing "reasonable" signs of recovery, it would like more visibility on the outlook of the Pharma business given an upcoming series of patent expirations. [Read more]

• Needham reinstated coverage of Rivian Automotive (RIVN) with a Buy rating and $26 price target after its Q4 results. The firm remains positive on the stock based on demand and current vehicle owner satisfaction levels. [Read more]

• Guggenheim initiated coverage of AbbVie (ABBV) with a Buy rating and $172 price target. Investors have "naturally" been focused on Humira’s erosion curve as it loses U.S. market exclusivity, but the firm believes that has led to people overlooking the strength of the rest of AbbVie’s business. [Read more]

• DA Davidson initiated coverage of Palantir (PLTR) with a Neutral rating and $8 price target. The company possesses significant intellectual property, but its unique mission and focus may limit its opportunity and earnings visibility, the firm says. [Read more]

• Guggenheim initiated coverage of ANI Pharmaceuticals (ANIP) with a Buy rating and $55 price target, citing a "bullish view" that is driven primarily by enthusiasm on purified cortrophin gel’s potential. [Read more]

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