Booking initiated, Workday 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:

• UBS upgraded Dick’s Sporting (DKS) to Buy from Neutral with a price target of $260, up from $225. Dick’s will generate more sustainable earnings growth moving forward than it has in the past, and this has not been fully reflected in the stock, the firm argues.
• Citi upgraded Urban Outfitters (URBN) to Buy from Neutral with a price target of $59, up from $42. The firm says that for the first time in years, the Urban Outfitters brand is showing signs of a recovery, with management guiding to a Q4 sequential comp improvement and margin recovery expected to continue into fiscal 2025.
• JPMorgan upgraded Martin Marietta (MLM) to Overweight from Neutral with a price target of $640, up from $515. With the U.S. constructing materials sector trading at peak multiples, the “current narrative is priced for perfection and that any signs of growth weakness could pose a de-rating risk,” the firm tells investors in a research note.
• BTIG upgraded Embecta (EMBC) to Buy from Neutral with a $26 price target. Shares gained about 30% in Tuesday trading as investors rewarded management’s decision to discontinue the patch pump program, notes the firm, which is also “pleased with the decision from a financial perspective.”
• Macquarie upgraded Amcor (AMCR) to Outperform from Neutral with an A$18 price target. Berry Global (BERY) has agreed to be acquired in an all-stock transaction by Amcor, with Amcor owning 63% of the new entity and Berry 37%.

Top 5 Downgrades:

• Piper Sandler downgraded Workday (WDAY) to Neutral from Overweight with a price target of $270, down from $285, following the company’s earnings report. The firm says the company’s “tepid” guidance with remaining performance obligation growth expected to decline for the fifth consecutive quarter to 14% erodes its confidence that Workday’s “growth levers can still fuel a recovery next year.”
• Baird downgraded Kohl’s (KSS) to Neutral from Outperform with a price target of $18, down from $25. The firm says ongoing pressure in Kohl’s core apparel and footwear business, implying share losses during back-to-school period, greater comp volatility as management iterates on changes to the operating model, and a pending CEO change each reduce its conviction in the value case for shares.
• DA Davidson downgraded Symbotic (SYM) to Neutral from Buy with a price target of $35, down from $50, after the company delayed its 10K filing for its FY24 as it needs added time to complete the assessment of the financial impacts of correcting errors that were already disclosed and the associated impact on internal control and financial reporting.
• JPMorgan downgraded Alexandria Real Estate (ARE) to Neutral from Overweight with a price target of $121, down from $133. The firm reduced estimates to reflect softer core growth assumptions, saying a number of Alexandria’s lease expirations could incur some downtime while backfilling the space.
• JPMorgan downgraded Coca-Cola Europacific Partners (CCEP) to Neutral from Overweight with a price target of $82, down from $85. The firm believes the stock’s valuation relative to beverages “is looking increasingly full for a number of players.”

Top 5 Initiations:

• Baird initiated coverage of Booking Holdings (BNKG) with an Outperform rating and $5,850 price target. The firm has a positive view of Booking’s business model, “especially given today’s favorable global travel backdrop.”
• Baird initiated coverage of Expedia (EXPE) with an Outperform rating and $225 price target. Expedia’s business model has been transformed recently and “disruption has occurred,” but the turnaround story is in process, the firm tells investors in a research note.
• UBS initiated coverage of Dynatrace (DT) with a Neutral rating and $58 price target. Dynatrace is well-positioned to gain share, but UBS is not as confident in the near-term revenue growth trajectory.
• Morgan Stanley initiated coverage of Grail (GRAL) with an Equal Weight rating and $16 price target. The company’s Galleri multi-cancer early detection screening test has the potential to address a significant unmet need, the firm tells investors in a research note.
• TD Cowen initiated coverage of Compass Diversified (CODI) with a Buy rating and $34 price target. TD sees strong earnings growth and multiple expansion as “dual drivers” for the shares.