Here are Thursday’s biggest calls on Wall Street: UBS reiterates Nvidia as buy UBS said it’s standing by its buy rating heading into earnings next week. “We are unlikely to get much new to sway this debate as NVDA likely maintain a similar tone to last Q by simply reiterating that visibility extends several Qs [quarters]. Given these fears, we expect the PE multiple to remain low, in a 20-25x range, similar to prior cycles as the market determines the direction of ’25.” Goldman Sachs reiterates Palo Alto Networks as buy Goldman said it’s standing by its buy rating after the company’s earnings report on Wednesday. “While some key metrics were ahead of expectations, Palo Alto Networks reported 1QFY billings 2% below the Street and revised FY24 billings guidance down by 3%, noting higher interest rates impacting billings duration.” Bank of America reiterates Roblox as buy Bank of America said the stock is becoming “more investable.” “As compared to the previous Investor Days, this year’s was shorter, less focused on Roblox’s technologies and features, and more focused on commercial and financial implications.” Goldman Sachs initiates Installed Building Products as buy Goldman said it sees margin upside for the building products company. “As we estimate single-family starts will grow 8% YOY in 2024, we believe IBP will leverage its compelling value proposition to builders.” Deutsche Bank initiates Wayfair as buy Deutsche said in its initiation of the stock that it’s a “pure-play e-commerce leader.” “We initiate on Wayfair with a Buy rating and an $55 Target Price based upon our 2025 Target EV/EBITDA multiple of 12.5x, suggesting 16% upside from current levels.” Deutsche Bank initiates DoorDash as buy Deutsche said in its initiation of the company that it has “superior unit economics.” “We initiate on DoorDash with a Buy rating and a $125 Target Price, implying +30% upside from current levels.” HSBC downgrades Altice USA to reduce from buy HSBC said in its downgrade of the cable company that it’s “equity stuck in a leverage trap.” “Year-to-date, ATUS shares have fallen by 52% while consensus free cash flow expectations for 2023 and 2024 were down 77% and 36% respectively.” Stifel initiates Lavoro as buy Stifel said the LatAm ag company is well positioned. “We believe Lavoro is on track to achieve outsized organic and inorganic growth through a combination of strong underlying fundamentals in South American agriculture, a favorable structure to the region’s crop input retail industry that favors Lavoro’s acquisition model, and continued market adoption of high-margin proprietary products.” Baird upgrades Catalent to outperform from neutral Baird said Catalent shares have an attractive valuation.” “Virtually every concern previously holding us back is being addressed, while results and optics should improve dramatically by 1HCY24, and valuation is attractive vs. reasonable comps.” Goldman Sachs initiates TopBuild as buy Goldman said in its initiation of the building products company that it has plenty of upside. “In our view, TopBuild is well positioned to leverage an improving outlook for new home construction, while also continuing to diversify into counter cyclical industrial and commercial end-markets.” Piper Sandler downgrades Deckers to neutral from overweight Piper downgraded the stock mainly on valuation. “We are downgrading DECK to Neutral as our OW thesis has largely played out, and valuation now looks fair.” Redburn Atlantic Equities initiates Philip Morris as neutral Redburn began coverage of the tobacco giant with a neutral mainly on valuation. “The shares trade on a one-year forward P/E of 14x, which is a 34% premium to the tobacco sector and justified by PMI’s smoke-free leadership and very limited exposure to US combustibles. Our DCF-based 12-month price target is $95 per share and we launch with a Neutral rating.” Deutsche Bank upgrades Goodyear Tire to buy from hold Deutsche said a turnaround is taking hold for the tire company. “We upgrade Goodyear to Buy following the unveiling of the operational and strategic plans it looks to execute over the next 24 months, after an in-depth Board-led review as part of its agreement with an activist investor.” Guggenheim upgrades BorgWarner to buy from neutral Guggenheim said in its upgrade of the automotive supplier that it sees an attractive entry point. “We expect BWA to outperform auto suppliers over the next 12-18 months off of the current depressed valuation, while also exposing investors to less downside/macro risks given attractive decremental margin profile relative to the average supplier.” Bank of America upgrades ITT to buy from neutral Bank of America said in its upgrade of the aerospace and transportation component company that it’s underappreciated. “We are upgrading ITT shares to Buy on: resilient end market exposure (oil & gas, Aerospace & Defense), differentiated Auto exposure, underappreciated margin expansion opportunities, and best-in-class execution.” Bank of America initiates Gen Digital as buy Bank of America said it likes the cyber safety vendor. “We are initiating coverage of consumer cyber safety vendor Gen Digital with a Buy rating and $25 PO, which implies 27% potential upside. ” JPMorgan upgrades Tencent Music Entertainment to overweight from neutral JPMorgan said the China music company is an “earnings compounder.” “Extrapolating recent positive business momentum into the next 2-3 years, we expect TME to rise as a 20% CAGR earnings compounder over 2023- 25E with high visibility and a strong track record, driven mostly by its online music operation.” Wells Fargo initiates MongoDB as buy Wells said the database platform company is the “best way to play AI.” “We see MongoDB as the best AI play in software infrastructure given its ever-expanding list of new workloads. The company is well-positioned for solid margin expansion, which in turn will drive strong Free Cash Flow growth.” Mizuho upgrades Intel to buy from neutral Mizuho said in its upgrade of Intel that it’s “unlocking value.” “We are upgrading INTC to BUY, raising estimates, and raising our PT to $50 (from $37). INTC trades at ~3x P/S, a discount to AMD and NVDA at ~7.1x/~15x, with significant idiosyncratic tailwinds.” Goldman Sachs reiterates Amazon as buy Goldman said it sees an “underappreciated secular growth opportunity” for Amazon shares into next year. ” AMZN : multiple years of stock underperformance as margins have absorbed COVID and macroeconomic headwinds; rising utility nature of the shopping habits of the Prime user base; cross platform narratives building across advertising & media consumption, potential for margin self-repair in the coming years.” Citi downgrades Plug Power to neutral from buy Citi said it sees too many negative catalysts for the EV charging company. “We are downgrading PLUG to Neutral/High Risk. At the time of initiation, we had seen PLUG as a catalyst rich story with near term upside despite medium-term challenges. While the catalysts did not play out, subpar execution has led the company into liquidity challenges.” Bank of America upgrades StoneCo to buy from neutral Bank of America said in its upgrade of the financial services company that shares of StoneCo have plenty of more room to run. “The stock provides 25% potential upside to our new PO and we upgrade to Buy.” Wells Fargo upgrades Target to overweight from equal weight Wells upgraded Target after its earnings report on Wednesday. “We see TGT’s Q3 update as a material inflection. Macro uncertainty is undeniable, but margin clarity shifts the range of earnings outcomes for this beaten up name much higher. We paid the price for waiting, but the risk/reward remains favorable.” TD Cowen downgrades Target to market perform from outperform TD said it sees a “lack of upside” catalysts after the company’s earnings report on Wednesday. “A budget-conscious consumer is likely to drive a continuation of negative trends at TGT’s discretionary categories of home, apparel & hardlines (~50% mix). We expect traffic & unit declines to continue, which will also drive lack of upside to future FY24 guide.” Bank of America downgrades Advance Auto Parts to underperform from neutral Bank of America said it sees too many challenges ahead for the auto parts retailer. “Following AAP’s disappointing 3Q earnings results and expectation for continued challenges in the medium-term, we downgrade AAP to Underperform from Neutral.
