Here are Friday’s biggest calls on Wall Street: Morgan Stanley reiterates Apple as overweight Morgan Stanley said it’s standing by its overweight rating on shares of Apple. “Apple has underperformed the S & P by 6 pts after a below-expectations Sept Q guide. We remain OW into the iPhone launch as we estimate growth inflects higher in FY24 (driven by iPhone, Services & gross margins), w/ growing LTV [loan to value] a long-term upside driver.” JPMorgan reiterates Netflix as overweight JPMorgan said it’s standing by its overweight rating on Netflix shares. “Our positive view on NFLX hasn’t changed, but the areas of investor pushback we’ve heard most focus on: 1) Paid Sharing monetization & how/when it will lift ARM & revenue; 2) core subscriber growth & NFLX’s future pricing power; & 3) the quality & trajectory of FCF in 2023 & 2024.” Credit Suisse reiterates Walmart as outperform Credit Suisse said it’s bullish heading into Walmart earnings next week. “We continue to believe WMT remains very well positioned for the current environment, as it continues to exhibit solid defensive characteristics, given its value driven consumables-oriented business in the wake of a volatile consumer backdrop and slowing but elevated inflationary headwinds on the consumer.” Read more about this call here. Mizuho reiterates Coinbase as underperform Mizuho said retail crypto traders are flocking to Robinhood and away from Coinbase. “Did COIN retail traders continue to flock to Robinhood in July? After losing an estimated ~400bps of share to HOOD in 2Q, management commentary from both companies seems to point to further share shift from COIN to HOOD in July.” Bank of America initiates Kura Oncology as buy Bank of America said it’s very bullish on shares of the biotech company. “Kura is a clinical-stage biotech advancing targeted cancer treatments, including lead asset ziftomenib in late-stage development for certain forms of acute myeloid leukemia.” Redburn reiterates Amazon as buy Redburn raised its price target on Amazon to $230 per share from $220 and said “significant catalysts [are] ahead.” “We anticipate notable earnings upgrades for both AWS and retail, with enhanced FCF conversion driving the further rerating, pushing shares towards our revised target price of $230.” Read more about this call here. Morgan Stanley upgrades DigitalOcean to equal weight from underweight Morgan Stanley said in its upgrade of the software company that its thesis on DigitalOcean has largely played out. “Our Underweight thesis largely played out and mgmt’s lower outlook for FY23 rev & lower future FCF margins represents a key catalyst in the rear-view mirror.” Citi opens a positive catalyst watch on Cisco Citi said it sees upside heading into earnings next week. “We are opening a positive catalyst watch and expect Cisco to outperform peers Arista and Juniper as strong Enterprise demand likely fuels upside to Jul-Q results. Cisco should benefit from its heavy Enterprise exposure where peers saw upside.” Deutsche Bank reiterates Nio as buy Deutsche raised its price target on the stock to $17 per share from $13 and said “new models ramping quickly and sales efficiency improving.” “Motivated by a greater sense of urgency, NIO’s operational execution has improved significantly in the past quarter with new models ramping quickly and sales efficiency improving.” Morgan Stanley reiterates Carvana as underweight Morgan Stanley said the company still has “alot to prove.” “CVNA raised 3Q guide and detailed GPU gains. While there is room to be incrementally more positive, CVNA still has a lot to prove, in our view.” Wells Fargo reiterates Chevron as overweight Wells said it’s standing by its overweight rating on shares of Chevron. “Our Overweight rating reflects strong cash flow generation and yield and cash returns to shareholders amid relatively disciplined capex, a solid balance sheet and solid execution expected to continue. Wells Fargo reiterates BJ’s as overweight Wells said it’s standing by its overweight rating on shares of BJ’s ahead of earnings later this month. “BJ seems poised to report a somewhat disappointing Q2 and modestly guide down the full year. While not ideal, it seems expected, due to macro factors, the multi-year story is still good, and valuation seems relatively attractive. Remain Overweight.” JPMorgan reiterates Krispy Kreme as overweight JPMorgan said Krispy Kreme shares are too cheap to ignore. “Krispy Kreme stock has continued its pattern of stock volatility, being down ~14% on the day of 2Q23 earnings but still up ~20% YTD vs up 16% for SPX but down ~14% y/y vs up ~6% for the SPX, respectively.” Stephens reiterates FedEx as overweight Stephens said it’s standing by its overweight rating on the stock “Despite the lack of tailwinds from the economy and underlying demand, we believe FedEx is in a strong position to see accelerating momentum across many parts of its business as its DRIVE cost out program takes hold, and it benefits from share gains and improved yields in both Ground and Freight.” JPMorgan initiates Madison Square Garden Entertainment as overweight JPMorgan said in its initiation of the company that it’s a “pure play live entertainment business at fair valuation.” ” MSGE’ s concentration in arena sized shows also means there’s likely to be greater variability in financial results than appreciated, while incremental competition from newly opened and renovated venues could check event growth relative to past rates.” Wolfe downgrades Stanley Black & Decker to under perform from peer perform Wolfe said it sees a negative risk/reward for the stock. “In conjunction with our 2Q23 earnings wrap, we have downgraded SWK from PP to UP rating. If management can execute on $2bn cost plan, there is a path to > $7 EPS in 2025e. But this has to be viewed as a bull case scenario. On balance, we see R/R as tilting negative.” Argus upgrades Twilio to buy from hold Argus said the company which provides programmable communication tools for phone messaging is an AI beneficiary. “We see AI as a key accelerant for Twilio’s business as clients seek to make their customer-communications tools more capable and more efficient.”
