Tesla downgraded, UPS 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:

• UBS upgraded UPS (UPS) to Buy from Neutral with a price target of $175, up from $160. The firm says the company has a strong cost reduction program to support margin expansion and “attractive” earnings growth.”
• BofA upgraded Tyson Foods (TSN) to Neutral from Underperform with a price target of $62, up from $47. While Beef remains a headwind and will likely remain so for some time, Chicken fundamentals and Tyson’s execution have seen material improvement, the firm says.
• Citi upgraded Palantir Technologies (PLTR) to Neutral from Sell with a price target of $20, up from $10. The company’s stronger than expected Q4 and outlook suggests “some breakthrough momentum” in the commercial business, the firm argues. Jefferies also upgraded Palantir Technologies to Hold from Underperform with a price target of $22, up from $13.
• Deutsche Bank upgraded Li Auto (LI) to Buy from Hold with a price target of $41, down from $45. Following the stock’s 32% decline since late November, the firm sees a “compelling set-up in the coming quarters driven by a robust product pipeline,” further supported by an attractive valuation for a “top tier” electric vehicle player.
• Morgan Stanley upgraded Open Lending (LPRO) to Equal Weight from Underweight with a price target of $7, up from $4. The firm expects rising auto inventories should help stabilize the company’s new vehicle certified loans in 2024, while easing interest rates will help add flexibility to insurance companies hurdle rates, which in turn should make program pricing more attractive overall.

Top 5 Downgrades:

• Daiwa downgraded Tesla (TSLA) to Neutral from Outperform with a price target of $195, down from $245. The firm says the ramifications of increasing focus on governance concerns could limit Tesla’s propensity to invest for the very long term and innovate.
• BTIG downgraded McDonald’s (MCD) to Neutral from Buy without a price target following this morning’s earnings report. The company’s sales trends have normalized, operating conditions have become more uncertain, and earnings upside seems more limited, the firm tells investors in a research note.
• Redburn Atlantic downgraded Bristol Myers (BMY) to Neutral from Buy with a price target of $54, down from $77. The firm sees the launch trajectory for new products, and contribution from the in-line pipeline and recently acquired assets as incapable of addressing looming headwinds for the company’s key in-line products.
• Evercore ISI downgraded Vertex Pharmaceuticals (VRTX) to In Line from Outperform with a price target of $438, up from $436. Vertex has been “a monster of a stock against broader sector weakness,” but the stock has reached a new valuation high following multiple Phase 3 readouts across pain and CF, which combined with anticipated headwinds for the emerging pain franchise leads the firm to pause here as it “continues to look for ways to be constructive on this biotech leader.”
• Northland downgraded Fabrinet (FN) to Market Perform from Outperform with an unchanged price target of $200. The firm says that while telecom was stronger in Q2 and expected to grow sequentially in Q3, the recent strength in the shares and Fabrinet’s premium valuation metrics warrant a move to the sidelines.

Top 5 Initiations:

• JPMorgan initiated coverage of Broadcom (AVGO) with an Overweight rating and $1,550 price target following a period of restriction. The firm also added Broadcom to the firm’s U.S. Equity Analyst Focus List a growth idea, and said it believes the market continues to overlook the diversification story in Broadcom’s semiconductor and mission critical software infrastructure franchises combined with strong free cash flow generation of the business.
• KeyBanc resumed coverage of ResMed (RMD) with an Overweight rating and $227 price target. The firm would maintain or increase MedTech exposure into 2024, believing “several limiting factors are now in the rearview,” including previous COVID resurgences and subsequent staffing and supply chain challenges. KeyBanc also resumed coverage of Steris (STE), Alcon (ALC), Inspire Medical (INSP), ICU Medical (ICUI) and Integer (ITGR) with Overweight ratings, and Sotera Health (SHC), LeMaitre (LMAT), Cooper Companies (COO), UFP Technologies (UFPT) and Agiliti (AGTI) with Neutral ratings.
• UBS initiated coverage of Axsome Therapeutics (AXSM) with a Buy rating and $111 price target. The firm is bullish on Auvelity’s launch and the company’s pipeline opportunities with upcoming late-stage clinical readouts. UBS also started coverage of Biohaven (BHVN) with a Buy rating and a price target of $59.
• Redburn Atlantic initiated coverage of Bloom Energy (BE) with a Neutral rating and $12.50 price target. Bloom’s 2026 and 2031 revenue guidance ranges are “too aggressive and uncertain,” the firm tells investors. Redburn also started coverage of Plug Power (PLUG) with a Neutral rating and $4.50 price target.
• Alliance Global Partners initiated coverage of Honest Company (HNST) with a Buy rating and $5.75 price target. The company entered 2023 with a low cash position as an unprofitable company and exited 2023 with an improved balance sheet and approaching break-even EBITDA, says the firm, which looks for the company to prove its ability to achieve profitability and “demonstrate itself as a self-sustaining company” in 2024.