Here are Thursday’s biggest calls on Wall Street: Morgan Stanley reiterates Amazon as a top pick Morgan Stanley said shipping and fulfillment remain “key profit drivers” heading into the e-commerce giant’s earnings next week. “While we don’t expect a ~$7bn 4Q EBIT guide our analysis of AMZN’s fulfillment and shipping cost/unit growth in 2Q vs. long-term averages (2Q showed scale driving efficiency across AMZN’s overbuild) highlights the key profit driver.” Barclays reiterates Apple as equal weight Barclays said it’s standing by its equal weight rating heading into Apple earnings next week but expects the company to show “resilient” iPhone 14 Pro demand. “We expect upside to Consensus for Sep-Q revenue and earnings with still resilient iPhone 14 pro demand and Mac strength, offsetting escalating FX, Services weakness and other macro headwinds.” Canaccord upgrades Datadog to buy from hold Canaccord said in its upgrade of the cloud-scale applications company that it see long-term revenue growth for Datadog. “Deepening product moat, investing in platform, refining the growth engine — Room to get tactical; upgrade to BUY.” Piper Sandler initiates Spotify as neutral Piper said in its initiation of Spotify that it sees a lack of visibility. “At this point in time, we would prefer to see some additional execution on the margin-expansion front and more insight into ad-supported business trends in the current environment before becoming more constructive.” Bank of America reiterates CVS as buy Bank of America said it’s standing by its buy rating on CVS heading into earnings on Nov. 2. “We reiterate our Buy rating given the numerous growth drivers that should lead to enterprise-wide long-term performance and FCF generation.” Wolfe downgrades Sunrun to peer perform from outperform Wolfe said in its downgrade of Sunrun that it sees “interest rate headwinds.” “We downgrade RUN to Peer Perform. Headwinds from the interest rate spike on financing costs and valuation are tough to ignore despite strong demand growth from IRA and rising utility rates. We need to see rate/credit markets stabilize.” Read more about this call here. Bernstein reiterates Tesla as underperform Bernstein called Tesla’s earnings report on Wednesday “disappointing” and said it worries about “demand.” “While Tesla stated that it had ‘excellent demand’ and that it would continue to sell “every car we can make for the foreseeable future”, lead times for cars have come down dramatically, especially in China, and we worry about weaker consumer spending and incremental competition.” Read more about this call here. Morgan Stanley downgrades Ally Financial to equal weight from overweight Morgan Stanley said in its downgrade of the financial services company that visibility is “fogging up” for shares of Ally. “Stepping to the sidelines as we cut forward EPS estimates by 32%. While this lower EPS looks priced in, catalysts for a rerating are several quarters out in the base case and further out in the bear.” Read more about this call here Goldman Sachs initiates Gossamer Bio as buy Goldman said in its initiation of Gossamer that it sees an “attractive market opportunity” for the biotech company. “We see near-to-medium-term stock performance primarily driven by the upcoming top-line results from the Phase 2 TORREY data for seralutinib in pulmonary arterial hypertension (PAH) patients on background therapy, which we anticipate is likely to meet the primary endpoint.” Oppenheimer upgrades Dick’s to outperform from perform Oppenheimer said it sees supply chain challenges “abating” for the sporting goods retailer. “Recent commentary from NKE and others points to continued underlying, broad-based strength in consumer demand. Data suggests that supply chain challenges are now abating. We are optimistic that inventory rationalization efforts now underway should prove transitory and well managed.” Read more about this call here. UBS reiterates McDonald’s as buy UBS said the fast-food chain is “defensive.” “Despite outperformance YTD and concerns around interest rates, FX and Europe exposure, MCD shares can continue to outperform in a challenging macro and choppy market, given defensive attributes and key competitive advantages (i.e. execution, digital, marketing, asset base).” UBS reiterates Nike as buy UBS said its recent survey checks give the firm “increased” conviction in the stock. “UBS Evidence Lab’s 2022 Global Athletic Survey reveals three important insights: 1) Nike remains the world’s strongest athletic wear brand; 2) Nike’s brand image is recovering nicely in China; and 3) Nike’s “Consumer Direct Acceleration” strategy.” Piper Sandler reiterates Nvidia as outperform Piper said after a recent meeting with company management that it’s feeling more optimistic about shares of Nvidia. “Overall, we feel that if we are not at the bottom right now, we are very close to the bottom for NVIDIA’s business.” Morgan Stanley reiterates Tesla as overweight Morgan Stanley said Tesla’s earnings report on Wednesday was strong but that the outlook for 2023 is still “at risk.” “A clean 3Q earnings beat despite lower regulatory credits, rising input costs, FX headwinds, logistics/plant ramp-up inefficiencies. $3.3bn of FCF was nearly 3x our forecast. A very strong quarter. Still … we wish FY23 consensus would allow more room for macro uncertainty.” Read more about this call here
