Microsoft CEO Satya Nadella speaks at a live Microsoft event in New York City, Oct. 26, 2016.
Lucas Jackson | Reuters
Here are Thursday’s biggest calls on Wall Street:
Morgan Stanley reiterates Nvidia as a top pick
Morgan Stanley said it’s sticking with Nvidia after a series of meetings with management.
“Every indication from management is that we are still early in a long term AI investment cycle.”
Morgan Stanley reiterates Netflix as outperform
Morgan Stanley raised its price target on Netflix to $820 from $780 per share ahead of earnings next week.
“We remain bullish shares on 1) a long runway for revenue growth, 2) above consensus expectations for operating leverage and EPS, and 3) a deepening competitive moat.”
Barclays upgrades CVS to overweight from equal weight
Barclays said the stock is a “new margin story.”
“We upgrade CVS to OW and increase our PT to $82 (from $63).”
JPMorgan downgrades Honeywell to neutral from overweight
JPMorgan said it’s downgrading the stock after 15 years with an overweight rating.
“After almost 15 years recommending HON, despite new management that we believe is doing the right things for the long term, we are moving to the sidelines, mostly due to the spin that appears dilutive, resulting in another year that lacks clarity on the forward earnings curve, for a stock that is cheap but remains a consensus Sell Side long.”
Goldman Sachs reiterates Microsoft as buy
Goldman trimmed its price target on the stock to $500 per share from $515 but remains bullish on the tech giant.
“Microsoft’s first-mover AI advantage, as well as an unwavering focus on AI innovation, will strongly position the company to continue to be the AI-provider of choice in our view.”
UBS upgrades Tronox to buy from neutral
UBS said it’s bullish on the chemical manufacturer.
“We upgrade TROX to Buy from Neutral and raise our PT to $19 (~35% upside).
Jefferies initiates Sunnova as buy
Jefferies said the solar company is a top turnaround story.
“Solar installer Sunnova could be one of the best turnaround stories in our clean coverage after it revised its ’24-’26 cash outlook +70% up following recent issuance of domestic content guidelines.”
TD Cowen downgrades Pepsi to hold from buy
TD Cowen said it sees “stress on the value equation.”
“While we continue to view PEP as a top-tier CPG company, we believe that aggressive pricing in their three biggest U.S. categories over-extended their value equation to consumers and will compromise their near-term pricing power.”
UBS upgrades EVgo to buy from neutral
UBS said it’s bullish on the electric vehicle charging company following a series of Department of Energy loans.
“We upgrade shares of EVGO from Neutral to Buy, following the $1.05bn DOE loan conditional commitment announced last week. In our view, the conditional commitment provides increased visibility to EVGO funding new stall deployments beyond 2025, at a potentially accelerated pace relative to current run-rate expectations.”
Goldman Sachs initiates Builders FirstSource as buy
Goldman said the building materials company is “levered to [a] housing recovery.”
“We believe Builders FirstSource is well positioned to capitalize on macro, industry and company-specific trends over the coming years, enabling above average earnings growth and returns relative to our building products coverage.”
RBC upgrades Medtronic to overweight from sector weight
RBC said it has “increased confidence” in the medtech company.
“Our view is as follows: (1) MDT’s core business is poised to comfortably deliver MSD sales growth against a backdrop of positive healthcare utilization; (2) MDT’s growth kickers continue to derisk, potentially setting up the company for upside with multiple shots on goal.”
Bernstein downgrades PayPal to market perform from outperform
Bernstein said the stock path is too uncertain.
” We downgrade PayPal to MP. We tactically upgraded the stock at the end of July due to better product velocity & execution under new management, improving gross profit growth and attractive valuation.”
Barclays downgrades Cirrus to equal weight from overweight
Barclays said in its downgrade of Cirrus that the semiconductor supplier has handset expectations that are too high.
“We are merely stepping aside here as we feel CY26 should be another year of strong content uplift. In the interim, we think Street December numbers are $20M+ too high and could be a negative catalyst for the stock.
Bank of America upgrades Brinker to neutral from underperform
Bank of America upgraded the owner of Chili’s and says it sees a more balanced risk/reward.
“Investor enthusiasm for a turnaround at Chili’s and successful execution by CEO Kevin Hochman are evident in EAT’s year-to-date rally and multiple expansion. While the outperformance is justified, in our view, risk/reward looks balanced from here, and as such we upgrade to Neutral from Underperform.”
Truist upgrades Nike to buy from hold
Truist said it’s bullish about new management.
“We have been cautious on Nike since our launch in the Fall’23. While we still view a turnaround process as long/uncertain, we’re more optimistic on shares as investor expectations finally seem to accurately reflect this reality.”
BTIG initiates Birkenstock as buy
BTIG said margins are robust for the shoe company.
“BIRK stands out as a unique retail growth story that marries a long brand legacy with future expansion potential, capable of delivering strong DD% [double digit] top-line growth (long-term algo calls for mid-to-high teens) with stable to improving margins.”
Cantor Fitzgerald initiates Mara Holdings as overweight
Cantor said the bitcoin miner is well positioned.
“Like other publicly traded miners, MARA is a way to play Bitcoin.”
Wolfe upgrades L3Harris Technologies to outperform from peer perform
Wolfe called the stock a “pure play defense at a reasonable price.”
“We are upgrading shares of LHX to Ouperform from Peer Perform with better confidence in a turning point in relative growth in sales/earnings and mid-teens FCF/sh growth.”
JPMorgan upgrades AIG to overweight from neutral
JPMorgan said it’s bullish on the insurance company.
“Our bullish view of AIG reflects its outsized EPS growth, lower exposure to risks facing commercial lines carriers (casualty reserves and higher cat loads), high capital flexibility, and attractive valuation.”
Bank of America reiterates Alphabet as buy
The firm said it’s sticking with the stock despite reports of the DOJ breaking up the company.
“Also, we see the following positives: 1) We believe Google is well-positioned in the search market today, as users would likely choose to use Google, if given a fair choice; 2) Now that the DOJ has provided its potential remedies, Google’s counter proposals in December will likely provide a more positive potential outcome.”
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