Here are Wall Street’s biggest calls on Wednesday: Bernstein reiterates Amazon as outperform Bernstein said it remains bullish on the e-commerce giant heading into 2023. “Amongst the uncertain backdrop, Amazon continues to look like the safest place in eCommerce after taking share in 3Q and likely continuing to do so in 4Q.” Wells Fargo downgrades Lear to equal weight from overweight Wells said it sees earnings headwinds in 2023 for the automotive seat and electrical systems company. “We are downgrading LEA from Overweight to Equal Weight. LEA shares are up 10% since the end of Q3 (vs. S & P also +12%). However, we are more cautious on auto production vs. IHS, driven by expected weakness in Europe and China.” Citi downgrades Marriott to neutral from buy Citi downgraded the stock mainly on valuation. “We believe MAR’s fee-driven business model likely supports expanded current valuation, fairly reflecting continued RevPAR recovery (revenue per available room), net unit growth and accelerating share repurchases.” Morgan Stanley names Exxon Mobil a top 2023 pick Morgan Stanley said Exxon Mobil is one of the best-positioned stocks heading into 2023. “Against that backdrop, we remain focused on rate of change trends (both on cash return and capital efficiency) and generally prefer stocks with (1) strong and/or improving FCF; and (2) scale and asset diversity to better manage inflation risks.” Jefferies reiterates Netflix as hold Jefferies raised its price target on Netflix to $310 per share from $250, but said it’s waiting for a better entry point for the stock. “Street may be overestimating the AVOD (ad video on demand) impact for Q4 and 1Q23 while underestimating the out-year impact. This leads us to be cautious into the quarter and await a better entry point.” Goldman Sachs names Boeing at top 2023 pick Goldman said the aerospace giant is best positioned in the commercial sector heading into 2023. “We see commercial original equipment ( BA , SPR, HWM) as the best positioned in commercial aerospace in 2023, with a strong order cycle under way and deliveries well below demand.” Barclays upgrades SolarEdge to overweight from equal weight Barclays said it’s bullish on the company’s “pivot” toward Europe. “Post our trip to Europe, we feel more confident about the macro dynamics in Europe that will underpin SEDG’s growth and ability to take market share in the near term.” Wedbush upgrades Darden to outperform from neutral Wedbush called the owners of brands like Olive Garden a “share gainer.” “We expect DRI’s category share gains to accelerate in an increasingly uncertain consumer environment, rendering visibility into DRI’s ability to achieve or exceed current consensus FY23 expectations relatively high.” Morgan Stanley reiterates Apple as overweight Morgan Stanley said concerns about App Store competition are overdone. “We see limited risk to App Store revenue from greater App Store competition on iOS, and believe that Apple potentially appeasing EU regulators could actually remove a long-standing overhang on Apple’s stock.” Bank of America downgrades Best Buy to underperform from neutral Bank of America said the environment is too challenging right now for Best Buy. “We expect a challenging environment for BBY to achieve earnings growth in both the near term and medium term, and we lower our earnings estimates to account for a challenging medium-term demand environment.” Read more about this call here. Bank of America downgrades Caesars and Penn to neutral from buy Bank of America said in its downgrade of Caesars and Penn that it’s concerned about flattening gaming spend. “Our new ratings are underpinned by: 1) Slowing Y/Y consumer-spending growth according to BAC aggregated credit and debit card data , 2) flattening gaming spend and declining visitation.” Cowen initiates BellRing Brands as outperform Cowen said it sees several positive catalysts for the food nutrition company. “We find active nutrition shakes to be the most attractive growth pocket within snacking, informed by return to exercise and participation from younger cohorts, and mindful the segment is underpenetrated vis-a-vis bars.” UBS initiates Plug Power as buy UBS called the hydrogen fuel cell company a “one stop hydrogen shop.” “We initiate coverage of Plug Power with a Buy rating and +90% upside. Hydrogen could be a $10Tn market by 2030, and PLUG aims to be a one-stop shop and market leader in the entire space.” Read more about this call here. Bank of America reiterates Nike as neutral Bank of America said it’s cautious going into Nike earnings next week. “Our focus remains on whether demand in North America will worsen next year given stretched consumers.” Bank of America reiterates Alphabet as buy Bank of America said it’s sticking with its buy rating on Alphabet but that investors need to hear more about the Google parent’s cost-cutting initiatives. “We currently estimate 5% headcount growth or roughly 10K net adds in 2023, below Street at 12K, and we increasingly think headcount could be down in 2023.” Goldman Sachs reiterates Tesla as buy Goldman lowered its price target on Tesla to $235 per share from $305, but said it’s still bullish on the stock for 2023. “We would continue to be selective with auto OEM stocks as price and mix are likely to be headwinds in 2023 as supply/demand generally moderates, and we prefer TSLA and GM (both of which likely benefit from the IRA, with Tesla in particular a leader in EV/autonomous tech in our opinion).” Morgan Stanley upgrades RingCentral to overweight from equal weight Morgan Stanley said the software company is underappreciated. “Given outsized commissions historically paid, RNG has ability to show more flex to business model, causing us to move to OW.” Wells Fargo reiterates Goldman Sachs as overweight Wells raised its price target on Goldman to $400 per share from $380 and said the company has many “levers” to pull. “Goldman isn’t as cheap as it was earlier in the year, but still trades at less than 10x our 2023 estimate.” Barclays upgrades Lennar and PulteGroup to overweight from equal weight Barclays said it’s turning more positive on the homebuilder sector heading into 2023. “We turn positive on our homebuilder subsector, with valuations already priced for a sharp housing recession. We are now relatively more positive builders vs. building products. We upgrade LEN and PHM to OW.” Read more about this call here . Deutsche Bank names Qualcomm and Marvel top 2023 picks Deutsche said in its 2023 semis outlook that it likes stocks with “de-risked estimates/valuations.” “Our preferred names heading into CY23 are those with de-risked estimates/valuations (Buy rated MRVL and QCOM ) and those with underappreciated stability/idiosyncratic drivers.” Oppenheimer upgrades Datadog to outperform from perform Oppenheimer said the software company is a “rare” combo of growth and profit. “We’re upgrading Datadog to Outperform with a $105 price target. The company’s unified, real-time view into the entire technology stack remains mission-critical to developers/enterprises as they focus on identifying/eliminating performance issues. While not recession-proof, the mission-critical nature of its solutions gives Datadog relative resiliency in times of spending constraints.”
