Here are the biggest calls on Wall Street on Tuesday: Barclays initiates Supermicro as overweight Barclays said the information technology company is well positioned for artificial intelligence. “Against the backdrop of AI investment trends, we believe SMCI is well positioned to capture the rising AI server opportunity with more share gains ahead driven by its superior design capability and strong AI partnerships.” Evercore ISI upgrades CVS to outperform from in line Evercore said in its upgrade of the drugstore chain that the stock is attractive. “We are upgrading shares of CVS with a new PT of $83 (8x ’24 EBITDA, 10x P/E) as we see operational issues improving and an attractive current valuation.” Goldman Sachs downgrades Lazard to sell from neutral Goldman said in its downgrade of the investment bank that the outlook is too “challenging.” “We believe near-term earnings at LAZ will face pressure, driven by a challenging top-line trajectory and a longer path to margin improvement, while we see valuation as slightly elevated.” Truist upgrades Royal Caribbean to buy from hold Truist said in its upgrade of the stock that it’s seeing strength in booking trends. “It didn’t take us a long time to get back on the (bull) train: Strong forward trends + cooled off stocks make us again Positive on the sector and we are upgrading RCL to Buy from Hold and CCL to Hold from Sell. Daiwa upgrades Dell to outperform from hold Daiwa said in its upgrade of Dell that “AI is starting to kick in.” “Beginning of new demand up cycle, raise rating to Outprf. from Neutral.” Redburn Atlantic Equities initiates Arm Holdings as neutral Redburn said in its initiation of the semiconductor company that it is overvalued right now. ” Arm’s guidance for a rapid pivot in achieved royalty rates would be a marked departure from historical performance trends. Given lacklustre financial performance in FY23 and the June quarter, F2Q earnings in mid-November need to evidence how such a pivot will be both delivered and sustained.” JPM downgrades Planet Fitness to neutral from overweight JPM downgraded Planet Fitness due to leadership changes and “ongoing systemic challenges.” “Removal of Chris Rondeau — the modern founder of the business and CEO since January 2013 — was clearly a surprise on September 15th, especially after our in-person time together on September 7th.” TD Cowen reiterates Nvidia as outperform TD said it’s even more bullish on the stock after attending a recent conference. “We came away from the conference increasingly confident in NVIDIA’s lead in training, the sea change taking place in inference, the need for a full-stack approach to AI, and most importantly, how early we remain in the AI build out.” Raymond James upgrades Rackspace Technology to outperform from market perform Raymond James said in its upgrade of the cloud computing company that it likes management’s execution. “We are raising our rating on shares of Rackspace to Outperform from Market Perform. In the last 12 months, the management team has changed over, reorganized the business, and changed its strategic direction.” Barclays reiterates Apple as equal weight Barclays said its channel checks show iPhone 15 preorders are down compared to last year for Apple. “We performed a number of channel checks for IP15 pre-orders in China. Overall unit orders were down 5% vs. last year with 4% lower pro mix on a Y/Y basis.” Goldman Sachs reiterates Micron as buy Goldman raised its price target on Micron to $85 per share from $80 and says it’s standing by its buy rating heading into earnings later this month. “While we are reducing our FY24 revenue and earnings estimates (which in hindsight were too aggressive), we expect the combination of improving demand trends and disciplined supply to drive higher pricing, improving margins/EPS and, in turn, sustained stock price outperformance over the coming quarters.” Citi initiates GE Healthcare as buy Citi said in its initiation of the GE spinoff company that it has products that are “essential, and pervasive, throughout the healthcare continuum.” “It is rare to initiate coverage of a 125-year-old IPO with a market cap of ~$30B, yet here we are, initiating coverage of GEHC at Buy and an $82 TP following its spin-off from General Electric on January 4, 2023.” Bank of America adds Array Technologies to the US1 list Bank of America said the solar manufacturer is a “diamond in the rough.” “In a market where the legacy ‘blue chip’ names of cleantech have limited line of sight to 4Q, let alone 2024, ARRY screens as a diamond in the rough.” TD Cowen downgrades Starbucks to market perform from outperform TD said in its downgrade of the coffee giant that it’s concerned about China pressures. “We point to worrisome macro & competitive pressures that we expect to challenge China SSS, [same-store sales] and hence SBUX’ s multiple.” Evercore downgrades Deere to in line from outperform Evercore downgraded the stock citing agriculture production cuts. “However, for full fiscal year 2024, the trends/early color from my contacts on ’24 Deere build schedules do suggest revenue declines for Deere next fiscal year, more than the generally ‘flattish’ consensus.” KeyBanc reiterates Alphabet as overweight KeyBanc kept its overweight rating on shares of the internet giant and says it’s confident in margin expansion. ” Alphabet — relative to Meta, Alphabet’s expense cuts occurred later and recent layoffs in recruiting reinforce hiring growth is moderating. We see further potential savings from real estate rationalization and from Cloud margin improvements.”
