Block upgraded, PayPal downgraded: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly.

Top 5 Upgrades:

• William Blair upgraded Block (SQ) to Outperform from Market Perform without a price target. The firm says its bullish view reflects Square’s improving execution, marked by simpler merchant onboarding and new vertical solutions, such as in hospitality, and CEO Jack Dorsey “injecting new energy into a business that had become complacent, despite technology leadership.”
• TD Cowen upgraded Fortinet (FTNT) to Buy from Hold with an unchanged price target of $75. The firm cites the firm’s “solid” channel checks, which suggest a bottoming cycle for security appliances, for the upgrade.
• Citi upgraded VF Corp. (VFC) to Buy from Neutral with a price target of $20, up from $11. The announcement of the sale of Supreme for $1.5B, more than Citi expected, has cleared the way for the company to repay both of their upcoming debt maturities, the firm tells investors in a research note.
• Baird upgraded e.l.f. Beauty (ELF) to Outperform from Neutral with a price target of $230, up from $210. With “healthy” brand momentum, ongoing distribution expansion, and significant international whitespace, e.l.f. is positioned to sustain market share gains and “premium” earnings growth even in a choppier consumer backdrop, the firm tells investors in a research note.
• Morgan Stanley upgraded Gap (GPS) to Overweight from Equal Weight with a price target of $29, up from $27. The firm cites positive indicators from its retail scorecard analysis, incremental confidence in new management’s strategy execution following the Q1 print and June meetings, room for positive earnings revisions in 2024 and beyond, and potential for a “temporary valuation re-rating” for the upgrade.

Top 5 Downgrades:

• William Blair downgraded PayPal (PYPL) to Market Perform from Outperform without a price target. The firm sees potential upside to 2024 and 2025 earnings estimates, but does not anticipate the stock’s multiple will appreciably rise in the absence of accelerating payment volume growth or expanding transaction dollar margin.
• Redburn Atlantic downgraded Palo Alto Networks (PANW) to Neutral from Buy with a price target of $325, down from $350. While near-term expectations have been reset after the announcement of Palo Alto’s “platformisation” strategy, consensus expects a sharp reacceleration in dollar growth from fiscal 2026 onwards, which is unlikely, the firm tells investors in a research note.
• Morgan Stanley downgraded Foot Locker (FL) to Underweight from Equal Weight with a price target of $18, down from $24. The firm cites negative indicators in its scorecard analysis, continued fear of negative earnings revision risk both near- and long-term and risk of valuation de-rating for the downgrade.
• Redburn Atlantic double downgraded Crowdstrike (CRWD) to Sell from Buy with a price target of $275, down from $380. The stock’s valuation is “demanding” and any disappointment to sales or annual recurring revenue could bring a sharp de-rating, the firm tells investors in a research note, adding that it sees downside risk to current buy-side expectations.
• Barclays downgraded Molson Coors (TAP) to Underweight from Equal Weight with a price target of $47, down from $55. The firm believes a challenging industry backdrop will weigh on Molson’s results “for some time.”

Top 5 Initiations:

• Macquarie initiated coverage of Six Flags Entertainment (SIX) with an Outperform rating and $64 price target. The firm says synergies from the combined company are likely to take longer to fully realize, assuming some consumer cyclicality and weather
• Goldman Sachs initiated coverage of PagerDuty (PD) with a Neutral rating and $24 price target. The firm believes customers view PagerDuty as more discretionary and sees limited near-term catalysts for the shares.
• Wells Fargo initiated coverage of Grocery Outlet (GO) with an Overweight rating and $28 price target. The firm says the company’s “choppy” execution and poor investor sentiment yield an attractive entry point in this “defensive, growth story.”
• Cantor Fitzgerald initiated coverage of Impinj (PI) with an Overweight rating and $205 price target. The company is well positioned to capitalize on a large addressable market as radio frequency identification tag usage accelerates in the verticals of retail and general merchandise and supply chain and logistics, the firm tells investors in a research note.
• Benchmark initiated coverage of Winnebago (WGO) with a Buy rating and $75 price target. As the leading North American manufacturer of RVs and Marine products, the company has historically been known for its motorized RVs, but it has “undergone a significant transition,” beginning with its acquisition of Grand Design in 2016, which has been a primary contributor to the company’s OEM-leading fundamental profile, the firm notes.