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 Bu-y calls and the top 5 Sell calls made by Wall Street’s best analysts during the week of May 13-17.

Find all top-rated stocks by the best-rated analysts on TipRanks.

Top 5 Buy Calls:

1. Argus upgrades Wayfair to Buy on home furnishings turnaround

Argus upgraded Wayfair (W) to Buy from Hold with an $83 price target. Home furnishing sales began the year weak, but growth in orders and active users who have purchased at least once over the past year should act as a catalyst for revenue, the firm tells investors in a research note. Argus says that given Wayfair’s broad selection of furniture, home goods and housewares, the company benefits from growth in online purchases of home furnishings.

2. Exxon Mobil resumed with an Overweight at Morgan Stanley

Morgan Stanley resumed coverage of Exxon Mobil (XOM) with an Overweight rating and $145 price target after the company’s close of the Pioneer (PXD) acquisition on May 3rd. The firm contends that the company’s scale and integration across the energy, chemicals, and emerging low- carbon value chains support sustainable competitive advantages, above-average growth and a differentiated value proposition within the Energy sector and the broader market. Exxon Mobil shares outperformed year-to-date, but the stock still trades at a 55% discount to the broader market, nearly double historical levels, despite offering a 50% higher growth rate than the S&P, Morgan Stanley tells investors in a research note.

3. Western Digital initiated with a Buy at Citi

Citi initiated coverage of Western Digital (WDC) with a Buy rating and $90 price target. The firm expects a cyclical recovery in the storage market. Following several quarters of storage digestion, capex cuts and workforce reductions, the storage media industry dynamics should improve from here with the return of pent-up storage demand led by hyperscalers, Citi tells investors in a research note. The firm’s positive view on Western Digital is based on a cyclical recovery in the storage industry coupled with the company’s exposure to both hard disk drive and solid state. Citi also started coverage of Seagate (STX) with a Buy rating and $110 price target.

4. Ibotta initiated with an Outperform at JMP Securities

JMP Securities initiated coverage of Ibotta (IBTA) with an Outperform rating and $130 price target. The company is transforming the consumer-packaged goods promotion industry with the Ibotta Performance Network, the firm tells investors in a research note. JMP says its positive view is driven by Ibotta’s growing scale and 850 retail partners, as well as its exposure to 200M consumers. The firm believes more consumer reach can attract more brands, increase coverage, and more merchants. UBS, Citi, BofA, Evercore ISI, Wells Fargo, Raymond James, and Needham also started coverage of Ibotta with Buy-equivalent ratings.

5. United Airlines initiated with a Buy at HSBC

HSBC initiated coverage of United Airlines (UAL) with a Buy rating and $69.20 price target. The firm expects United to take advantage of the new post- pandemic travel dynamics, addressing comfort and customer experience. Product segmentation will play an important role going forward as economy seats will increasingly compete with ultra-low-cost-carriers for travelers in the domestic market in 2024, HSBC tells investors in a research note. The firm also started coverage of Delta Air Lines (DAL) and American Airlines (AAL) with Buy ratings and price targets of $72.80 and $17.90, respectively.

Top 5 Sell Calls:

1. Wells starts Texas Instruments at Underweight on risk to targets

Wells Fargo initiated coverage of Texas Instruments (TXN) with an Underweight rating and $150 price target. The sell-equivalent rating reflects a concern that Texas Instruments can’t achieve its revenue targets and related utilization, the firm tells investors in a research note. Texas Instruments shares already discount not only a full cyclical recovery, but also a “bull-case scenario” of $30B in fiscal 2024 revenue as well as full utilization of 300mm fab investments, Wells adds. The firm believes the stock already reflects significant market share gains and prior-peak margins on “lofty” fiscal 2026 revenue targets. Wells thinks Texas Instruments shares will be a relative underperformer compared to the peer group.

2. JPMorgan downgrades Under Armour to Underweight on “multi-year reset”

JPMorgan downgraded Under Armour (UAA) to Underweight from Neutral with a price target of $6, down from $8, following the company’s Q1 report. Under Armour announced a “multi-year reset” amid an increasingly competitive backdrop, the firm tells investors in a research note. JPMorgan says the company’s operating income is anticipated to decline by 55% year-over-year and its product innovation path was pushed out another 18 months. The firm sees Under Armour lagging peers in terms of product innovation and newness as well as profitability.

3. Wolfe downgrades SunPower to Underperform after “massive short squeeze”

Wolfe Research downgraded SunPower (SPWR) to Underperform from Peer Perform with a $2 price target. The firm says SunPower is the “most extreme example of the meme stock resurgence” within clean technology with the stock up 100% this week on a “massive, short squeeze despite no positive fundamental updates.” Wolfe expects the stock to “come back to reality once the squeeze pressure abates.” There have been no recent positive developments with the stock and in fact, SunPower alerted the market on Monday of a delayed Q1 filing as the company continues to untangle material internal control issues and historical financial misstatements, notes Wolfe. It believes SunPower may need more capital this year and says the outlook for rooftop solar in California remains uncertain.

4. Oceaneering downgraded to Underweight at Barclays

Barclays downgraded Oceaneering (OII) to Underweight from Equal Weight with a price target of $21, down from $22. The firm made adjustments to its offshore energy services coverage coming out of Q1 earnings. TechnipFMC (FTI) remains its top pick in offshore but it sees “stark differentiation among Smid Caps.” Barclays remains constructive on the offshore drillers and coupled an upgrade of Expro (XPRO) with a downgrade of Oceaneering International.

5. OMA downgraded to Underperform at Scotiabank

Scotiabank downgraded OMA (OMAB) to Underperform from Sector Perform with a price target of $85. The firm said lost traffic, and the increase of concession fees, will be compensated by higher tariffs benefiting Asur (ASR) beginning in April 2024, and GAP Airports (PAC) in 2025. However, OMA will have to wait until 2026 for that, Scotiabank tells investors in a research note. The firm cited the combination of a valuation call and lower earnings momentum in the next two years relative to the peer group for the downgrade of OMA.