Here are Wednesday’s biggest calls on Wall Street: Goldman Sachs names Boeing a top pick into earnings Goldman said it thinks Boeing will achieve positive free cash flow when it reports earnings later this month. “We see free cash flow flipping positive in 3Q, with management indicating improvement from there, as the pace of new aircraft deliveries starts to accelerate and orders remain strong.” Wells Fargo adds Schlumberger to the signature picks list Wells called the oilfield-services company a “bellwether.” “We consider Schlumberger the bellwether Energy Services company. The sector typically thrives later in the energy cycle, which pairs nicely with the rise in global oil and natural gas prices, which began in Fall 2021.” UBS upgrades Norwegian to buy from hold UBS said it sees improved bookings for the cruise operator. “We are upgrading NCLH to Buy from Neutral with a price target of $15 ($18 prior) given the significant improvement in bookings in its Q3 preview, showing it has caught up to the other cruise lines in occupancy while still keeping price nicely ahead of 2019 levels.” Read more about this call here . Jefferies upgrades AIG to buy from hold Jefferies said it sees “unappreciated core growth” in AIG . “The u/g reflects underappreciated earnings momentum in P & C, where we model 30% earnings CAGR for ’22-’24 vs. Street’s 10%.” KBW upgrades Allstate to outperform from market perform KBW said in its upgrade of the insurance company that it sees “auto underwriting margin improvement.” “We downgrade PLMR to Market Perform from Outperform on valuation and property catastrophe pricing concerns, and we upgrade ALL to Outperform from Market Perform on expected core auto underwriting margin improvement.” B. Riley reiterates AMC as neutral B. Riley lowered its price target on the movie theater chain to $7.50 from $11 per share and said it was too “aggressive” on its “assumed level of outperformance.” “Lowering our 3Q22 estimates. Even though the domestic box office for 3Q22 came in slightly above our projection, we believe we may have been too aggressive on our assumed level of outperformance for the AMC circuit along with the mix between attendance and average ticket price benefits.” Citi reiterates Apple as buy Citi said investor concerns about the company’s upcoming earnings report later this month are overblown. ” Apple shares have slightly outperformed the broader market, given better-than-feared results YTD, continued product launches and positive news flow on consumer preference for higher ASP iPhone 14 Pro models.” Gordon Haskett upgrades Lyft to buy from neutral Gordon Haskett said it sees an attractive entry point for shares of the ride-sharing company. “While we continue to see Lyft as disadvantaged relative to Uber, we believe the combination of (1) Lyft’s material share price underperformance and relative valuation discount to Uber (outlined below), (2) overly negative investor sentiment — to the point where we think any news (barring something terrible) would be welcomed.” Credit Suisse initiates Boeing as underperform Credit Suisse said it’s concerned Boeing has lost access to the China market. “We expect Boeing to remain out of the China market indefinitely. At a basic level, this relates to the MAX’s continued inability to obtain regulatory approval for a return to service and, at a higher level, relates to broader geopolitical and trade tensions between the U.S. and China.” Read more about this call here. Credit Suisse initiates Rocket Lab as underperform Credit Suisse said in its initiation of the aerospace and rocket launch company that Rocket Lab’s valuation is unattractive right now. “Strong execution & technical capability, but we are bearish on the broader launch industry outside of SpaceX.” Read more about this call here. JPMorgan upgrades Dutch Bros. to outperform from neutral JPMorgan said an attractive entry point for shares of Dutch Bros. “Recent pullback in shares once again makes a reentry worth considering. This discretionary occasion showed more volatility than expected, with 56% of customers under 25 drinking 80% cold beverages and 60% of sales after 12 noon — but employment and stable gas prices are key to more predictable sales.” Read more about this call here. Deutsche Bank upgrades CME to buy from hold Deutsche Bank said in its upgrade of the global markets company that it sees an attractive risk/reward for shares of CME. “However, with the stock down 33% from its 52-week high in March, we see the risk/return now skewing positively with the stock trading at just 20x our 2023 EPS estimate of $8.30, versus our view it should trade at 24x 2023E a year from now.” Bank of America reiterates Amazon as buy Bank of America said it still sees significant room for margin expansion for Amazon. “While reopening/macro has pressured growth in 2022, and a there is recessionary risk to 2023 unit growth and margin expectations, we think ongoing share gains and slowing fulfilment investment sets Amazon up significant margin expansion when eCommerce growth normalizes.” Wells Fargo reiterates Microsoft as overweight Wells said the tech giant is still well positioned despite a “tougher set up.” “Despite the tougher setup, we continue to view MSFT favorably in the current environment given its well-entrenched position across multiple end markets (including Azure poised to gain share as traditional industries migrate) and differentiated ability to lean into vendor-consolidation opportunities.” William Blair resumes BJ’s as outperform William Blair resumed coverage of BJ’s and said the big-box retailer has a “long runway for growth.” “Value-Centric Model With Long Runway for Growth Well Positioned Amid Current Uncertainty.” Bank of America reiterates PayPal as buy Bank of America said PayPal is still a top pick and investors should buy the dip. “We think the recent move lower in shares following PYPL’s user policy ‘error’ was overdone. We believe there is room for sentiment to improve among long-only investors, and Elliott’s involvement likely puts somewhat of a floor on the stock.” Atlantic Equities upgrades Kimberly-Clark to outperform from neutral Atlantic Equities said the household and consumer goods company is defensive. ” Kimberly-Clark offers leading exposure to highly defensive consumer categories (Baby, Feminine and Adult Care) supporting a resilient top-line performance as well as leverage to improving margins as cost pressures ease.” Read more about this call here. Morgan Stanley downgrades Stanley Black & Decker to equal weight from overweight Morgan Stanley said it sees a “softened market” for the company. “We see more balanced risk/reward compared to other names in our group for Stanley Black & Decker given a softened market, recent de-rating and price/cost risks.”
