Wells Fargo downgraded, Best Buy 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:

• Telsey Advisory upgraded Best Buy (BBY) to Outperform from Market Perform with a price target of $95, up from $85. The firm says its meetings with Best Buy increased its confidence in the business showing signs of stabilization and improvement after nine consecutive quarters of negative comps.
• Needham upgraded CarMax (KMX) to Buy from Hold with a $99 price target. The firm thinks a used vehicle market recovery, as suggested by recent data, will benefit the “industry leader” CarMax.
• JPMorgan upgraded Riot Platforms (RIOT) to Overweight from Neutral with an unchanged price target of $15. The firm thinks Riot has a more visible path to growth than other publicly listed miners that need to acquire smaller sites or buildout greenfield facilities to reach near-term hash rate targets.
• Citi upgraded Tencent Music (TME) to Buy from Neutral with a price target of $13, up from $9, following the Q4 beat. The firm believes Tencent Music’s “steady and resilient” subscription music business with expanding capabilities of music value chain and ramp-up of long-form audio and diversified use case scenarios across multi-channels support a sustained growth outlook.
• JPMorgan upgraded Antero Resources (AR) to Overweight from Neutral with a price target of $30, up from $27. The firm says the company has positioned itself as the “go-to name” in a stronger natural gas and natural gas liquid pricing environment given its low gas price breakeven and ultra-light hedge book, as it remains nearly unhedged in 2024 and beyond on natural gas and liquids.

Top 5 Downgrades:

• Citi downgraded Wells Fargo (WFC) to Neutral from Buy with a price target of $63, up from $57. The stock has been one of the firm’s top picks among the Global Systemically Important Banks given its potential for EPS revisions, but this is now likely priced into the stock, the firm says.
• JPMorgan downgraded EQT Corporation (EQT) to Neutral from Overweight with a price target of $37, down from $39. While management outlined $5B of deleveraging within 12-18 months of the Equitrans Midstream (ETRN) transaction close through free cash flow generation and asset disposals, the deal will likely push any cash return to shareholders “to the right” until the company reaches its $7.5 B long-term debt target, the firm tells investors in a research note.
• Oppenheimer downgraded GrowGeneration (GRWG) to Perform from Outperform without a price target. The firm remains optimistic about the longer term prospects for the company but now believes investors are best situated on the sidelines in the nearer term.
• B. Riley downgraded Real Good Food (RGF) to Neutral from Buy with a price target of 50c, down from $6. The company announced a management change, supply chain optimization and factory transition plans, as well as pending restatement of financials due to errors in 2022 year-end physical inventory and recorded inventory, the firm notes.
• B. Riley downgraded Fusion Pharmaceuticals (FUSN) to Neutral from Buy with a price target of $23, up from $13. Based on existing collaboration on Ac225-labelled bispecifics, B. Riley believes Fusion’s FPI-2265 fits nicely in AstraZeneca’s (AZN) prostate cancer franchise. Raymond James also downgraded Fusion Pharmaceuticals to Market Perform from Strong Buy with a price target of $21, up from $16.

Top 5 Initiations:

• Barclays reinstated coverage of Broadcom (AVGO) with an Overweight rating and $1,405 price target. Broadcom operates a diverse portfolio of leading semiconductor businesses, is well positioned in artificial intelligence with franchise custom silicon and switching businesses, and features a software business that provides diversification and supports industry-leading profitability, the firm tells investors in a research note.
• UBS initiated coverage of American Airlines (AAL) with a Buy rating and $19 price target. The firm expects the company to see both strong free cash flow generation and profit acceleration in the next three years. UBS also started Delta Air Lines (DAL) with a Buy rating and a price target of $59.
• UBS initiated coverage of Southwest (LUV) with a Buy rating and $36 price target. The firm is “bullish” on Southwest as it sees a multi-quarter period of profit recovery unfolding later this year.
• UBS initiated coverage of JetBlue Airways (JBLU) with a Sell rating and $5 price target. The firm sees the company’ pre-tax losses, negative free cash flow and high leverage persisting into 2025. UBS also started coverage of Allegiant Travel (ALGT) with a Sell rating.
• Monness Crespi initiated coverage of Western Union (WU) with a Neutral rating and no price target. Since 2021 Western Union EPS has declined as the core of the business stabilizes and the firm is “chiefly concerned” that the climb back to transaction share growth implies continued purposeful share loss and that it puts calendar year 2024 and 2025 EPS estimates at risk of downward revisions.