Tesla initiated, Kellanova 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:

• Barclays upgraded Kellanova (K) to Equal Weight from Underweight with a price target of $55, down from $57, as the spinoff of the company’s North America cereal business is now “firmly in the rear view.”
• Wolfe Research upgraded Spirit AeroSystems (SPR) to Outperform from Peer Perform with a $34 price target following what the firm calls “a cascade of derisking that should set the stock up to work on the expected production upcycle.”
• Deutsche Bank upgraded Parker-Hannifin (PH) to Buy from Hold with a price target of $506, up from $462. The firm believes Parker-Hannifin is increasingly becoming a core holding within industrials for PMs, and rightfully so, as the company has proven its ability to deliver superior operational execution in many macro environments.
• EvercoreISI upgraded TopBuild (BLD) to Outperform from In Line with a price target of $368, up from $308. The firm says Q3 earnings were “generally healthy” across the housing coverage group, with both homebuilders and building product companies exceeding Street estimates.
• Barclays upgraded Valaris (VAL) to Overweight from Equal Weight with a price target of $106, up from $84. Despite the recent selloff in offshore driller stocks, the firm remains positive on the group ahead of the “next wave of multi-year contract announcements” set to begin in Q4.

Top 5 Downgrades:

• Stephens downgraded Topgolf Callaway (MODG) to Equal Weight from Overweight with a price target of $13, down from $24. The Topgolf SVS outlook is softer than anticipated in Q4 and into early 2024 and the long-term cash flow is below previous expectations, the firm tells investors. JPMorgan also downgraded Topgolf Callaway to Neutral from Overweight with a price target of $13, down from $23.
• Stephens downgraded Masonite (DOOR) to Equal Weight from Overweight with a price target of $93, down from $130. Q3 results “slightly missed expectations across the board” and management pointed to the mid-point of the sales guidance and the low-end of the adjusted EBITDA guide for calendar 2023, the firm notes.
• BTIG downgraded Ginkgo Bioworks (DNA) to Neutral from Buy without a price target after the company reported a Q3 miss on cell programs, and lowered its cell program guide for 2023.
• Jefferies downgraded Navient (NAVI) to Hold from Buy with a price target of $16, down from $22. The firm sees “incremental risk” after management lowered origination guidance and the reconsideration of investment in direct-to-consumer loan platform.
• Oppenheimer downgraded PureCycle Technologies (PCT) to Perform from Outperform without a price target. The company’s implementation of a two-week shutdown to remedy mechanical issues in pelletization and seal quality could remove key bottlenecks to continuous production, but postpone proof points of a ramp until later this quarter, the firm tells investors in a research note.

Top 5 Initiations:

• HSBC initiated coverage of Tesla (TSLA) with a Reduce rating and $146 price target. Tesla cars may well be the main driver of revenue and profits currently, but if the group is to be taken at its word, the future for Tesla is about robots, autonomous vehicles, energy storage and super-computers, the firm argues.
• Goldman Sachs initiated coverage of Cytokinetics (CYTK) with a Buy rating and $50 price target. The firm sees an attractive risk/reward on both the company’s near catalysts and the intermediate term commercial opportunity.
• Goldman Sachs initiated coverage of Apellis (APLS) with a Buy rating and $74 price target. The firm has “increasing comfort on Syfovre’s profile” given stabilization of the rate of retinal vasculitis at 0.01% per injection.
• Jefferies initiated coverage of Ironwood (IRWD) with a Buy rating and $21 price target. The firm believes the stock is currently trading around the Linzess “floor” and that the Street currently isn’t appreciating the potential upside from the company’s GLP-2 agonist, apraglutide.
• Wells Fargo initiated coverage of CSG Systems (CSGS) with an Equal Weight rating and $49 price target. The firm views the company’s customer concentration, competition and structural concerns as “key offsets,” leaving the firm balanced on the shares.