Tesla downgraded, Spotify upgraded: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly.

Top 5 Upgrades:

• Goldman Sachs upgraded Spotify (SPOT) to Buy from Neutral with a price target of $425, up from $320, after the company reported “overall solid” Q2 results. The firm said that Spotify is the clear global audio platform leader, which it expects to translate into compounded user growth, rising engagement, and pricing power, and the company is continuing to show gross and operating margin momentum.
• RBC Capital upgraded Estee Lauder (EL) to Outperform from Sector Perform with a $131 price target. The firm believes the company’s earnings and investor sentiment have troughed and that the stock’s risk-to-reward profile skews favorable.
• TD Cowen upgraded Lockheed Martin (LMT) to Buy from Hold with a price target of $560, up from $480. The company’s strong Q2 and F-35 delivery restart give Lockheed enhanced visibility of 5% sales gains, 10-20 points of margin lift, and rising cash flow through 2026, the firm tells investors in a research note
• Leerink upgraded Ionis Pharmaceuticals (IONS) to Outperform from Market Perform with a price target of $62, up from $53, following the Angelman syndrome update. As the company transitions to its wholly owned assets, investor focus has shifted toward olezarsen and donidalorsen as a series of assets reach commercialization, the firm says.
• Deutsche Bank upgraded Invitation Homes (INVH) to Buy from Hold with a price target of $41, up from $35. The firm believes single family for rent companies could generate better earnings growth in 2024 and 2025, especially given that there is no supply overhang which is an issue on the multifamily side.

Top 5 Downgrades:

• New Street downgraded Tesla (TSLA) to Neutral from Buy with a $225 price target following the Q2 report. The company’s deliveries recovered “at a cost,” increasing by 15% quarter-over-quarter, but with gross margins, excluding credits and leasing, down 1.7 points. Cantor Fitzgerald also downgraded Tesla to Neutral from Overweight with a price target of $245, up from $230.
• Morgan Stanley downgraded General Motors (GM) to Equal Weight from Overweight with a price target of $47, up from $46. The firm cites industry price pressure, EV and China risks as well as what it sees as a balanced risk/reward for its downgrade.
• Gordon Haskett downgraded Five Below (FIVE) to Hold from Accumulate with an $85 price target after the company last week “surprisingly pre-announced disappointing” Q2 to-date sales in conjunction with the resignation of long-time CEO Joel Anderson.
• Piper Sandler downgraded Ulta Beauty (ULTA) to Neutral from Overweight with a price target of $404, down from $494. Despite efforts to improve efficiencies in the supply chain, it is not enough to offset the several sources of margin dilution, the firm tells investors in a research note.
• Barclays downgraded BWX Technologies (BWXT) to Underweight from Equal Weight with a price target of $90, up from $75. The firm sees risk to BWX’s medium term mid-to-high-single digit EBITDA target, even with accelerating growth from medical/power.

Top 5 Initiations:

• Seaport Research initiated coverage of Imax (IMAX) with a Buy rating and $23 price target. The firm sees “a distinct near-term opportunity” for Imax shares to start to recognize that the film industry’s theatrical release schedule will start heading toward normalcy and calls the stock “a small-cap way to leverage this trend.”
• TD Cowen initiated coverage of JFrog (FROG) with a Buy rating and $50 price target. The firm says the company’s cloud story is attractive and argues that its seasonally weaker Q1 offers a buying opportunity.
• Morgan Stanley initiated coverage of Biohaven (BHVN) with an Overweight rating and $58 price target. The firm sees several drivers of value creation from the company’s “broad” pipeline across multiple disease areas, which it believes is unique among smid-cap biotech.
• Leerink initiated coverage of Tectonic Therapeutic (TECX) with an Outperform rating and $49 price target. The firm says the major stock value drivers over the next two years are TX45 developments, TX45 competitive news flow, and GPCR3 antagonist candidate progress.
• Baird initiated coverage of Aaon (AAON) with a Neutral rating and $100 price target. The firm is bullish on the company’s long-term fundamentals and market positioning, but says the recent rally and 2025 estimates that embed meaningful growth and margin reacceleration balance the stock’s near-term risk/reward.