Buy/Sell: Wall Street’s top 10 stock calls this week

What has Wall Street been buzzing about this week? Here are the top 5 Buy calls and the top 5 Sell calls made by Wall Street’s best analysts during the week of June 26-30.
 
Find all top-rated stocks by the best-rated analysts on TipRanks.

Top 5 Buy Calls:

1. Pinterest upgraded to Overweight from Equal Weight at Wells Fargo

Wells Fargo upgraded Pinterest (PINS) to Overweight from Equal Weight with a price target of $34, up from $23. The firm says the company’s Amazon (AMZN) partnership going live ahead of the 2023 holidays, improving engagement trends and higher advertising load will allow Pinterest to deliver “accelerating and above-consensus” revenue growth. Wells sees a “strong catalyst path” for the shares over the 12 months. Further, the firm expects Pinterest’s Q3 revenue guidance accelerating to low double digits versus 7% year-over-year in Q2 on impression growth accelerating, improving end-market trends and “Premiere Spotlight.”

2. Snowflake resumed with an Outperform at William Blair

William Blair resumed coverage of Snowflake (SNOW) with an Outperform rating and no price target. Snowflake is a leader in the large analytical database market, benefiting from strong secular trends around data growth, shift to cloud, and app proliferation, William Blair tells investors in a research note. Industry checks support the view that Snowflake is the easiest to use data warehousing platform, says the firm. It believes Snowflake is “poised to see strong tailwinds” from generative artificial intelligence adoption given its control of high-value enterprise data. Blair sees a favorable risk/reward equation for the stock.

3. Workday initiated with an Outperform at RBC Capital

RBC Capital initiated coverage of Workday (WDAY) with an Outperform rating and $275 price target. The firm believes there is a “long runway” of 20%-plus subscription growth for Workday, driven by the continued displacements of legacy solutions, a large expansion opportunity following a successful evolution into a multi-product platform, and an “underappreciated M&A engine,” coupled with a clear path to 30%-plus margins long term. Workday has successfully evolved into a multi-product platform, RBC tells investors in a research note.

4. Piper Sandler bullish on TJX, initiates with an Overweight

Piper Sandler initiated coverage of TJX (TJX) with an Overweight rating and $110 price target. The off-price channel has both near-and long-term secular trends that make it one of the most attractive sectors in apparel retail, Piper tells investors in a research note. TJX’s focus on an upper-middle income consumer gives it an advantage relative to peers, says the firm. Piper believes TJX’s execution here has remained “consistently strong” and the company has an opportunity to benefit in the second half of 2023 as industry promotions normalize.

5. Deere initiated with a Buy at Canaccord

Canaccord initiated coverage of Deere (DE) with a Buy rating and $530 price target. Innovations across Ag inputs and equipment should provide key pillars for necessary change, and while Deere is a leading incumbent within the conventional farming system, it is also a Precision Agriculture leader, and its innovations are helping drive a transition to sustainable agricultural production, Canaccord tells investors in a research note. Since its keynote at CES in 2022, John Deere has received increasing attention as a major provider of semi-autonomous and autonomous Ag equipment solutions, while interest in AI is putting the company’s vast agronomic data set in the spotlight, the firm says.

Top 5 Sell Calls:

1. Brinker initiated with an Underweight at Wells Fargo

Wells Fargo initiated coverage of Brinker International (EAT) with an Underweight rating and $31 price target. The shares are priced for turnaround upside, yet the company’s initiatives are in the early days, Wells tells investors in a research note. The firm says Brinker underperforms in a slowing macro environment as its assets are “prone to heightened trade down and promotion.” Considering the company’s negative traffic and fading price/mix, fiscal 2024 consensus comp estimates “look optimistic,” contends Wells.

2. Veeva downgraded to Underweight at Morgan Stanley

Morgan Stanley downgraded Veeva Systems (VEEV) to Underweight from Equal Weight with an unchanged price target of $181. Morgan Stanley expects Veeva’s “lock” on the life sciences customer relationship management market to be tested by Salesforce (CRM), representing its “most formidable threat yet.” If Salesforce enters the market, the firm sees 5% or more potential loss in revenue for Veeva, a risk it believes is not captured in the stock’s “premium valuation.” If Veeva’s billings growth misses second half estimates on incremental small business weakness or evidence of Salesforce’s interest in a pharma customer relationship management emerges, Veeva could potentially revisit the recent lows of $160 per share, representing 20% downside, says Morgan Stanley.

3. ContextLogic downgraded to Sell from Hold at Loop Capital

Loop Capital downgraded ContextLogic (WISH) to Sell from Hold with a price target of $6, down from $7. The firm, which has lowered its sales expectations, says the company has “consistently missed consensus for revenues,” and doesn’t see a change this quarter. With management focused on cash retention, the firm believes that even sales events like the ongoing Anniversary Sale are being promoted mostly through unpaid channels and thinks it is tough for Wish to hold share with larger platforms like Temu “willing to pump marketing dollars into a broad range of geographies.” While Loop Capital doesn’t think ContextLogic is a short given its sub-$200M market cap and negative enterprise value of $200M, the firm also doesn’t think it is “investable in the current competitive environment.”

4. Morgan Stanley downgrades Host Hotels to Underweight

Morgan Stanley downgraded Host Hotels (HST) to Underweight from Equal Weight with a price target of $15.50, down from $19. The firm cites weakening demand in several of Host’s key markets, higher supply than peers and what it sees as a “less compelling valuation” than for the group. The firm’s latest company RevPAR tracker showed most of the lodging C-Corps trending below consensus 2Q estimates in North America, but international trends should act as an offset for several of them, the firm tells investors in a lodging group note.

5. Delek Logistics downgraded to Sell from Neutral at Citi

Citi downgraded Delek Logistics Partners (DLK) to Sell from Neutral with an unchanged price target of $47, citing valuation following the stock’s recent outperformance. Delek Logistics has appreciated over 30% from recent lows and is now the second-best performer year-to-date across Citi’s midstream coverage, Citi tells investors in a research note. The firm says Delek Logistics trades at a greater than 2.0-times premium to its closest peer and boasts one of the highest multiples within the space.