Here are the biggest calls on Wall Street on Monday: BMO names Palo Alto Networks a top 2023 pick BMO named the cybersecurity company as a top pick, noting it likes Palo Alto’s free cash flow. “First, PANW remains our top pick. Second, we think FCF will remain as important if not increase in importance in setting valuation parameters.” Susquehanna initiates Ambarella as positive Susquehanna said the semiconductor company is “punching above” its weight and is “one of the very few companies effectively addressing A.I.” ” AMBA -Positive($90PT) ‘punching above their weight’ in A.I. at the Edge…the next big semis market.” Stifel names Microsoft a top 2023 pick Stifel said it likes Microsoft’s “strong product portfolio” for 2023. “Based on this view, we favor those names with strong product portfolios that should produce relative market-share gains and ARPU growth, healthy and improving profit profiles, and stable competitive landscapes.” Oppenheimer reiterates Apple as outperform Oppenheimer lowered its price target on the stock but said it’s not expecting any further capacity constraints. “We do not expect further COVID-related production capacity constraints for Apple in CY23. Reiterate Outperform and Lower PT to $170 (from $190) on lower estimates.” Morgan Stanley reiterates Disney as overweight Morgan Stanley lowered its price target on Disney to $115 from $125, but said the return of Bob Iger should allow the company to focus on earnings growth. “Return of Bob Iger as CEO offers the opportunity to reorganize Disney’s Media businesses (DMED) to prioritize driving overall Disney consolidated earnings growth.” KeyBanc initiates Coinbase as sector weight Key said in its initiation of the crypto company that it’s a “nice house” in a “not so nice neighborhood.” ” Coinbase offers pure play exposure to the digital asset ecosystem as an innovative and trusted service provider with a healthy capital position, forward thinking management team, and an ongoing commitment to user safety.” Mizuho names Robinhood a top 2023 pick Mizuho named the stock trading company a top pick in 2023 and said it sees new products and “maturity” for shares of Robinhood. “Year of new products and continued maturity. Management is executing better, and is set to launch variety of new accretive products in 2023.” Stifel upgrades Under Armour to buy from hold Stifel said in its upgrade of the stock that it sees “better margin certainty” for shares of Under Armour. “Relative inventory management discipline leaves Under Armour with better margin certainty and in a better position to bring newness to market in CY23 and we expect systematic risk from an inventory glut of larger competitors clears by 2H.” Wells Fargo downgrades Qualcomm to underweight from equal weight Wells said in its downgrade of Qualcomm that it’s concerned about smartphone names underperforming. “Our rating change is driven mostly by our desire to make sure we have the right ratings on the right stocks once investor sentiment turns more positive, and once we see signs the chip cycle is hitting a bottom.” Read more about this call here. Goldman Sachs downgrades Cheesecake Factory and Brinker to sell from neutral Goldman said it’s concerned about earnings headwinds for Cheesecake Factory and for Brinker , which is the owner of brands including Chili’s. “We favor limited service restaurants (both fast food and fast casual) given the lower absolute price points for consumers versus full service dining, and remain focused on digital trends in the industry and expect incremental technology integration and digital tools to be strategic drivers of better sales and margins into 2023, and beyond.” Read more about this call here. Goldman Sachs names Bath & Body Works a best idea Goldman said it sees “easing inflation headwinds” for the stock. ” BBWI stock has started to appreciate more meaningfully since the company reported in late November after an inline sales result but better than expected merchandise margins.” Goldman Sachs downgrades Ulta to neutral from buy Goldman said in its downgrade of the stock that it sees difficult comps. “We are downgrading ULTA to Neutral from Buy given our view that: 1) share gains from here are likely more limited; 2) ULTA faces difficult y/y compares following a strong 2022; 3) margin risk skews to the downside given a high level of investing next year; and 4)current valuation suggests limited upside.” Evercore ISI names Netflix a top idea for 2023 Evercore said it sees “robust revenue growth” for Netflix in 2023. ” Netflix remains THE global streaming leader, in terms of revenue, subscribers, and content quality.” JPMorgan upgrades Box to overweight from neutral JPMorgan said in its upgrade of the cloud content management company that it sees expanding margins in the months ahead. “While the shares have moved up only slightly since that time, Box has materially outperformed the index, and is one of the best performers in our coverage this year.” Read more about this call here. Goldman Sachs upgrades Gap to buy from neutral Goldman said in its upgrade of the stock that it sees accelerated earnings growth. “With our Apparel & Accessories Outlook , we upgrade GPS . Sequentially strengthening execution is a key idiosyncratic differentiator for this business with easy compares and opportunities for leadership announcements to be a catalyst.” Read more about this call here. Bank of America names General Electric a top 2023 pick Bank of America named GE a top pick for 2023 and said it sees catalysts for a rerating. “Our top picks for 2023 are: FTV (high-quality capital allocator), HON (top tier management with aero and oil & gas exposure), DOV (de-risked story with attractive valuation), EMR ($8+bn of dry powder for accretive M & A), GE (low investor expectations with catalysts for re-rating).” Cowen names Nvidia a top 2023 pick Cowen said Nvidia is the “leader” in artificial intelligence heading into 2023. “A big gaming reset, China AI bans, and inventory write-downs all behind us…and were just short-term distractions from the acute fundamental thesis: NVIDIA is the leader in accelerated compute and the key enabler for AI across vertical industries – full stop.” Cowen names Ralph Lauren a top 2023 pick Cowen said the stock is well-positioned despite a challenging macro. ” Ralph Lauren is our Top Idea for 2023 as top-line momentum accelerated in CY 2022 despite a challenging ‘macro.'” JPMorgan upgrades Monday.com to overweight from neutral JPMorgan said in its upgrade of the project management software company that it sees an attractive risk/reward. “We are also encouraged that despite having a relatively higher SMB (small mid sized business) exposure in a worsening macro environment, the company has not seen a meaningful change in gross churn or downgrades over the last couple of quarters, likely indicating that Monday’s value proposition is resonating with customers.” Deutsche Bank downgrades Micron to hold from buy Deutsche said in its downgrade of Micron that “hopes of a quick market recovery” are fading. “We are incrementally more cautious on the memory market, as we believe the current downturn will last longer and be more severe than we previously forecasted.” Deutsche Bank upgrades Lam Research to buy from hold Deutsche said in its upgrade of the semiconductor company that it sees an “attractive risk/reward.” ” LRCX has the most memory exposure among large cap semicap companies hence its stock has suffered the most in 2022, with many memory suppliers suggesting large capex cuts and new technology export restrictions impacting China’s memory companies.” Read more about this call here . JPMorgan adds Capital One to the focus list JPMorgan said the credit card and banking company is a “top value” idea for 2023. ” COF shares are trading at 6.0x NTM (next twelve months) EPS (a 38% discount to the historical multiple) with earnings expected to hit a cyclical trough in 2023.” Cowen names Take-Two a top 2023 pick Cowen said the video game maker has a great “long-term track record.” ” Take-Two is a top-tier operator in the global video game market with the best long-term track record in its peer group.” Citi downgrades Lab Corp to neutral from buy Citi said it still sees a Covid overhang for the stock. “We rate the LH as a Neutral. In the Lab business, we believe the COVID will continue to be an overhang even as the company tries to get patients back into routine testing and esoteric testing.”
