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Here are Tuesday’s biggest calls on Wall Street: Morgan Stanley reiterates Dick’s as overweight Morgan Stanley said the stock is “undervalued.” “DKS trades in-line with history on P/E but at a ~20% premium on EV/EBITDA – the largest divergence in our coverage. … Our conclusion: DKS is still structurally undervalued & could rerate further.” Citi upgrades Squarespace to buy from neutral Citi said it sees an “improved growth outlook” for the website hosing company. “We upgrade SQSP shares to Buy from Neutral and raise our TP to $40 from $30, reflecting an improved growth outlook resulting in upside tension to our near-term and long-term estimates.” Stifel downgrading ASML to hold from buy Stifel said in its downgrade of the semis supplier that it expects “industry outperformance to pause” in 2024. “We are downgrading our rating to Hold from Buy as we expect ASML’s industry outperformance in 2023 (+25% sales growth) to pause in 2024 (we forecast 5.5% growth).” Bernstein reiterates Tesla as underperform Bernstein said the “specter of further price cuts and downward revisions may make it difficult for the stock in the near to medium term.” “At its core, we believe that Tesla’s planned Model 3 and Y volume ambitions were unrealistically aggressive – somewhere around 3 to 4M units per year – or nearly ~50% global market share of their highly fragmented market segments.” Piper Sandler initiates VF Corp as overweight Piper said in its initiation of the Vans parent that it sees margin expansion “opportunities.” “We are more bullish on VFC on the opportunity for a turnaround at Vans, clear margin expansion opportunities, and compelling valuation at 8.2x our CY24 EPS estimate.” Goldman Sachs upgrades ZTO to buy from neutral Goldman upgraded the China express delivery company and said it sees a “re-acceleration in share gains .” “We are turning incrementally constructive on express delivery within eCommerce/logistics, and upgrade ZTO to Buy on relatively stable pricing, re-acceleration in share gains and potential Southbound inclusion.” Read more about this call here . Janney downgrades First Republic to sell from neutral Janney said in its downgrade of the regional bank that it needs the “mother of all pivots” to survive. “Lowering to SELL. After Worse-Than-Expected Results, FRC Needs to Pull Off the Mother of All Pivots to Survive.” Read more about this call here. MoffettNathanson reiterates Netflix as market perform Moffett said it was impressed by Netflix’s free-cash flow i earnings last week. “For the first quarter, Netflix’s free cash flow from operations improved from $920 million in 1Q22 to $2.2 billion in 1Q23 – over +$1.2 billion better.” Baird reiterates Crocs, Deckers, Nike and Planet Fitness as outperform Baird said there are still several apparel and footwear companies that are well positioned for a “challenging environment.” “We believe CROX , DECK , PLNT , and NKE remain attractive given strong brand-level drivers, low earnings sensitivity, and healthy balance sheet positioning.” Citi reiterates Netflix as buy Citi said it sees more upside in shares of Netflix. “We continue to like NFLX on the prospects of its ad tier and opportunity to close this CPM (cost per thousand) gap relative to its peers.” Credit Suisse upgrades Zebra Technologies to outperform from neutral Credit Suisse upgraded the computer technology company due to Zebra’ s strength in Europe. “Upgrading to Outperform, The Tail Wags the Dog, Europe to Drive Upside EPS and Solid Q2 Guide.” Stephens downgrades Cal-Maine Foods to equal weight from overweight Stephens downgraded the egg production manufacturer due to pricing concerns. “When considering what’s currently playing out for eggs, we think it is best for us move to the sidelines on Cal-Maine as we think risk/reward is now more balanced.” Bank of America upgrades Soho House to buy from underperform Bank of America said in its double upgrade of the private member social club that it has a “multi-year secular compounding story.” “we view Soho House as a unique, membership driven, multi-year secular compounding story with little/no competition.” KeyBanc reiterates Walmart as overweight KeyBanc said Walmart has one of the most compelling growth opportunities of the last 20 years. “We believe WMT has the most compelling growth outlook of the past 20 years, supported by share gains in key categories.” Credit Suisse reiterates Amazon as outperform Credit Suisse said it’s standing by shares of Amazon heading into earnings later this week. “We maintain our Outperform rating, with the thesis based on the following: 1) e-commerce segment operating margin expansion as it grows into its larger infrastructure, 2) optionality for faster than- expected FCF growth vis-à-vis its advertising segment, and 3) upward bias to AWS revenue forecasts and likely more moderate deceleration path.” Jefferies reiterates Hasbro as buy Jefferies said it sees more upside for the toy company mainly due to Magic: The Gathering card game. “Magic: The Gathering has been a key growth driver and source of margin expansion at HAS. ” Read more about this call here. Citi reiterates Meta as buy Citi said it’s staying bullish heading into Meta earnings on Wednesday. ” Meta remains our top online advertising pick as our checks suggest the digital advertising market has stabilized, Meta’s newer ad units and tools like Click-to-Message, Sponsored Reels, and Adv+ are gaining traction, engagement continues to grow, and profitability is improving following headcount reductions and a more streamlined organization.”
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