Here are Wednesday’s biggest calls on Wall Street: BTIG upgrades Nikola to buy from neutral BTIG said the electric vehicle truck company is well positioned to benefit from truck decarbonization. “We upgrade NKLA to Buy as we believe NKLA is well positioned to benefit from increasing demand to decarbonize the Class 8 truck market.” Loop downgrading Match to hold from buy Loop said in its downgrade of the online dating company that it’s concerned about future earnings per share misses. “We are downgrading our rating on Match Group, from Buy to Hold and lowering our price target from $70 to $60. Q2 missed from a revenues and earnings perspective, and we see potential for further misses into 2023.” Morgan Stanley downgrades Motorola Solutions to equal weight from overweight Morgan Stanley downgraded the telecom company mainly on valuation. “Recent re-rating in MSI closes valuation opportunity faster than we anticipated. Our confidence in growth and defensibility is stronger exiting Q2, but ~20% premium to the market appears to build in gradual upward pressure to estimates and defensive preference.” JPMorgan reiterates Netflix as neutral JPMorgan said investor sentiment is “picking up” heading toward the launch of the streaming giant’s ad-based service. “NFLX shares have traded up +8% since reporting 2Q earnings & our discussions suggest investor sentiment & interest — while still mixed — are picking up toward the launch of the ad-supported subscription tier, likely in 4Q.” Berenberg upgrades Merck to buy from hold Berenberg said in its upgrade of the biopharma company that it sees numerous positive catalysts. “For investors seeking a low-risk value option in the pharma sector, we believe Merck & Co offers many attractions: medium-term growth just ahead of the sector average, limited patent expiry burden, low exposure to U.S. price reform, margin expansion and no litigation overhang.” Read more about this call here. JPMorgan reiterates Coinbase as neutral JPMorgan said the crypto company could be a beneficiary of higher interest rates. “We estimate Coinbase has a substantial revenue opportunity that originates from higher interest rates, based on a 1-month Treasury yield getting to ~3.75% by YE2022.” KeyBanc initiates Walmart and Target as overweight KeyBanc said in its initiation of the big-box retailers that their competitive positioning has never been better. ” Walmart and Target are two of the most dominant, important retailers in America. While investors can find better growth potential in smaller companies, we believe both Walmart and Target are in the best competitive positioning of the past decade, given the pandemic’s catalyst of e-commerce becoming significantly more important.” Read more about this call here. Canaccord reiterates Tesla as buy Canaccord said Tesla is well positioned to navigate supply chain challenges and secure battery materials. “Over the last several years, Tesla has worked on securing battery materials supply through direct partnerships with the producers of lithium, cobalt, and nickel. As a result, Tesla has been able to navigate the global, rolling supply chain crisis better than its competitors.” Loop initiates Masimo as buy Loop said the medical technology monitoring company has strong cash flow. ” MASI is a market leader in Oximetry measurement with an expanding variety of noninvasive monitoring solutions ranging from vital and non-vital body signs measurement to hospital automation and connectivity platforms, which continues to steadily grow at high single digits/low double digits on a constant currency basis, and strong cash flow.” Raymond James upgrades PayPal to outperform from market perform Raymond James said it’s getting increasingly confident in shares of PayPal. “Simply put, after several consecutive challenging quarters of meaningful negative estimate revisions (FY22 EPS down 33% vs. a year ago, stock down 66% vs. S & P 500 -7%), we now have increased confidence forward estimates have bottomed and expect PYPL’s depressed multiple to grind higher as estimates rise.” Cowen initiates Mondelez as outperform Cowen said the food and snacking company has consumer advantages. “We are constructive on Mondelez amidst the current valuation disconnect. Our analysis shows the company boasts advantaged consumer (emerging markets) and category (snacking) exposure, as well as relatively low private label penetration.” Bernstein downgrades CSX and Union Pacific to market perform from outperform Bernstein said its call is not about a potential strike, but that it’s just too difficult to buy the stocks at current levels. “Railroads are great companies and offer a lower risk way of participating in the cyclical rally that will undoubtedly follow a fed pivot, but we find it difficult to make the case to add to U.S. rail exposure here and downgrade CSX and UNP to Market Perform.” Barclays reiterates Starbucks as overweight Barclays said after the company’s investor day that it sees a “new era” of outsized growth for Starbucks. “We are buyers here. Importantly, the global business has thus far been “immune” to the broader industry comp traffic slowdown.” Bank of America reiterates BlackRock as buy Bank of America said it sees the investment manager emerging from a bear market stronger. “We expect the BLK stock to outperform as the firm continues to take profitable market share through its secular growth businesses where it has a leading franchise and/or early mover advantages.” Morgan Stanley reiterates Apple as overweight Morgan Stanley said iPhone 14 lead times show that Apple’s iPhone cycle is “starting stronger than expected.” “Early iPhone 14 lead times show this cycle is starting stronger than expected, with iPhone 14 Pro Max lead times the longest of any model in the last six years at this point in the cycle.” Bank of America upgrades SoFi to buy from neutral Bank of America said in its upgrade of the online personal finance company that it sees a “favorable” risk/reward. “We see potential for a meaningful catalyst path over the next few quarters as SoFi benefits from the student loan payment moratorium ending and its high-profile NFL-aligned marketing investments drive user growth and engagement.” Read more about this call here . Evercore ISI downgrades Block to underperform from outperform Evercore ISI said in its double downgrade of the payment company that it sees growth headwinds. “We are downgrading SQ to Underperform from Outperform given potentially growing headwinds to its Seller and BNPL (Afterpay) businesses driven by increasing competition, tightening credit and an expected slowdown in macroeconomic growth, negatively pressuring our 2023 gross profit and EBITDA estimates.” Bank of America reinstates Coty as buy Bank of America resumed coverage of the beauty company and said it’s a “turnaround story.” “We are reinstating coverage of Coty with a Buy rating and $12 price objective (nearly 50% upside), reflecting a sum-of-the-parts (SOTP) valuation with 16x our CY24e EBITDA for the Prestige segment and 10x our CY24e EBITDA for Consumer Beauty.”
