Anika Begay
Here are the biggest decisions made on Wall Street Wednesday: Wolfe downgrades PulteGroup from Outperform to Peer Perform Wolfe says the homebuilder is overvalued. “Valuation is the key driver of our PHM downgrade, while the company’s high Florida exposure and balanced consumer segmentation likely cap the upside to our estimates.” Stifel upgrades Starbucks from Hold to Buy Stifel upgraded the coffee chain following a management shakeup that included a new CEO. “We upgrade SBUX from Buy to Buy and raise[e] Our TP to $110 following the appointment of Brian Niccol as Chairman and CEO.” Baird Reiterates Tesla as Outperform Baird says he is bullish on Tesla’s energy segment. “We believe the segment contributes approximately $41 per share to TSLA’s combined valuation and view it as one of the most under-regarded aspects of the broader business.” Goldman Sachs Upgrades nCino to Buy from Neutral Goldman sees a “reacceleration of growth” for the fintech software company. “We upgrade NCNO shares to Buy from Neutral, with a 12-month price target of $42 ($34 previously).” RBC Upgrades Johnson Controls to Sector Perform from Underperform RBC says the risk/reward tradeoff is now more balanced. “We are upgrading JCI from Underperform to Sector Perform as the recently announced portfolio pivot/leadership transition and evidently constructive dialogue with Elliott Management have sufficiently de-risked the story and balanced the risk/reward tradeoff.” Wells Fargo Upgrades EQT from Overweight to Equal Weight Wells upgrades the natural gas company following its merger with Equitrans Midstream. “EQT Upgraded to OW. With the merger with ETRN completed (7/22), transaction risk is out of the picture.” Barclays Reiterates Nvidia to Overweight Barclays says it maintains its Outperform rating on Nvidia. “We checked with the supply chain and are more positive on NVDA numbers in the near term.” JPMorgan Downgrades Emerson Electric from Overweight to Neutral JPMorgan sees limited catalysts ahead for the electric company. “If EMR were an expensive stock, it would look pretty straightforward, but the ~10% discount to FCF makes it more controversial.” Deutsche Bank Upgrades Starbucks from Hold to Buy Deutsche likes the coffee giant’s new CEO. “We’re upgrading SBUX to Buy (from Hold) following the announcement that Brian Niccol will be named CEO, increasing our conviction in a successful turnaround and return to a healthier growth story.” Baird upgrades Ball Corp from Neutral to Outperform Baird said the glass jar maker has defensive qualities. “In our view, Ball Corporation’s internal strategic pivot to focus on self-improvement via: 1) footprint optimization/modernization and 2) share repurchases as a key channel for free cash flow allocation, should add up to continued double-digit earnings growth, with the company on track to surpass its previous earnings peak of $3.60 from 2021 through 2025.” Jefferies upgrades Sportradar from Hold to Buy Jefferies upgraded the Swiss global sports technology company, saying it is becoming “increasingly attractive.” “Given the U.S. market growing 30%+ and SRAD’s expectations to exceed this rate through 2025+, we believe SRAD is becoming increasingly attractive within an already attractive sector.” Bernstein Reiterates Chipotle as Outperform Bernstein lowered his price target on the stock to $70 per share from $80, but is holding onto the stock. “The story of CMG is not over. We believe new management will not need to reinvent the wheel to fuel growth, but rather focus on maintaining execution discipline.” Evercore ISI Initiates Montrose Environmental Group as Outperform Evercore says it is bullish on the environmental consulting firm. “We are initiating coverage on Montrose Environmental Group (MEG) with an Outperform rating and a $43 price target.” Morgan Stanley Reiterates Target as Overweight Morgan Stanley said it will maintain its overweight rating ahead of Target’s earnings next week. “We expect comps and EPS to be in line for Q2’24. Earnings upside cases for 2024 appear less likely without significant gross margin expansion. Shares are not demanding and positive bias appears to be on the cards for the 12 months.” Berenberg Reaffirms Eli Lilly as Buy Berenberg raised its price target on the drugmaker from $1,000 to $1,050 per share. “Eli Lilly (Lilly) delivered a strong Q2, significantly beating market expectations.” Morgan Stanley Downgrades Intuit from Overweight to Equal Weight Morgan Stanley is concerned about the tax software company’s growth. “Looking ahead, we are concerned that Intuit’s growth algorithm has shifted too far toward price leverage as Intuit’s recent significant price action has likely contributed to market share losses at TurboTax and introduces risk at QuickBooks, where expectations are already elevated. Ultimately, this could undermine the durability of the company’s overall growth profile.” Stifel Downgrades Medtronic from “hold” to “buy” Stifel downgraded the medical technology company and says positive developments are taking too long to materialize. “We are downgrading Medtronic shares from ‘Buy’ to ‘Hold’ and lowering our price target from $100 to $85.” Citi Reiterates Palo Alto as a Buy Citi raised its price target on the cybersecurity stock from $345 to $385 per share. “Sure, checks have been respectable, but our conservatism stems from PANW’s heavy exposure to large deals and idiosyncratic parts that move the model, and where we would expect at least some circumspection from the buyer on the risks of single-vendor consolidation given the recent CRWD disruption.” Bank of America Reiterates Ross, TJX Companies, Burlington as Buy Bank of America says it is backing off-price retailers ahead of their earnings. “We reiterate our Buy ratings on BURL, ROST, and TJX ahead of Q2 earnings, as we believe the strong value proposition continues to appeal to both traditional and dip-market consumers.” Wedbush Upgrades Chipotle to Outperform from Neutral Wedbush says it backs the stock following the departure of its CEO on Tuesday. “We continue to believe CMG can sustain market share gains amid a more challenging macro backdrop for restaurants.” Oppenheimer Reiterates Coinbase as Outperform The firm says it backs Coinbase shares. “With six consecutive quarters of positive adjusted EBITDA, we believe the company has found a formula to drive sustainable profitability.” Citi Upgrades Huya to Buy from Neutral Citi upgraded the Chinese gaming streaming platform after earnings. “We rate Huya shares as Buy. We recognize more proven traction from the gaming-related business driving sequential growth [monthly active users] and paying for user growth and margin improvement.” TD Cowen Upgrades Ilumina from Hold to Buy TD Cowen sees revenue growth coming for the biotech company. “We are upgrading ILMN following their strategic update, where management laid out plans for EBIT margin expansion of 500 bps ’25-’27 and sales growth accelerating from (2%) in ’24 to [high single digits] in ’27.” Argus downgrades Hershey from buy to hold Argus downgraded Hershey due to a stubborn inflationary environment. “Given the inflationary environment, high cocoa and sugar prices, and changing consumer behaviors, we believe a HOLD rating is appropriate. We will seek upgrade based on signs of sustained margin improvement and volume growth.”
