Caterpillar downgraded, Flutter upgraded: 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:

• Wells Fargo upgraded Flutter Entertainment (FLUT) to Overweight from Equal Weight with a price target of $295, up from $224, implying 34% upside. Friday’s selloff reflects a “near-worst case” U.K. tax scenario and minimal offset, the firm tells investors in a research note.
• Wedbush upgraded Affirm (AFRM) to Neutral from Underperform with a $45 price target. The firm believes a lower interest rate environment should be beneficial to the company on several fronts, including lower funding costs and incremental gross merchandise value growth.
• Wedbush upgraded Upstart (UPST) to Neutral from Underperform with a price target of $45, up from $10. The firm believes improving credit quality metrics, lower interest rates and improving Upstart Macro Index could drive a positive inflection in originations and adjusted EBITDA in the second half of 2024.
• Piper Sandler upgraded SentinelOne (S) to Overweight from Neutral with a price target of $32, up from $25. The firm sees “multiple catalysts to buoy shares into year’s end,” including incremental share gains versus Crowdstrike (CRWD) beginning to surface providing upside to “modest” annual recurring revenue expectations, increased partner activity which better positions SentinelOne for incremental share gains and revenue, and a “tighter story” around artificial intelligence and automation going forward.
• Evercore ISI upgraded BorgWarner (BWA) to Outperform from In Line with a price target of $43, up from $39. With most Auto investors barely invested in the sector as “volatile apathy continues to reign supreme,” the firm’s strategy for the group continues to be “Defense as your best Offense” and Top Picks remain Auto Dealers.

Top 5 Downgrades:

• Goldman Sachs downgraded AutoZone (AZO) to Sell from Buy with a price target of $2,917, down from $3,205. The double downgrade is based on lower income consumer, to which AutoZone has significant exposure, likely remaining under pressure into 2025, the firm tells investors in a research note.
• Truist downgraded Amgen (AMGN) to Hold from Buy with a price target of $333, up from $320. The firm believes Amgen continues to execute on its commercial portfolio and expects the Phase 2 obesity readout to show activity consistent with the prior data, but says that given this is a Phase 2 asset, current share levels bake in the opportunity.
• Morgan Stanley downgraded Caterpillar (CAT) to Underweight from Equal Weight with a price target of $332, down from $349. The firm sees mounting risks of de-stocking and limited offsets from mega projects and manufacturing.
• Wells Fargo downgraded VF Corp. (VFC) to Underweight from Equal Weight with a price target of $15, down from $16. The stock is pricing in “much more upside than appears realistic” following the recent rally, the firm tells investors in a research note.
• TD Cowen downgraded Expeditors (EXPD) to Sell from Hold with a price target of $106, down from $112. The outlook for Expeditors has deteriorated as “exogenous factors” propping up the forwarding market have proven temporary with a short-lived port strike and adaptation to Red Sea congestion well underway at this stage, the firm tells investors in a research note.

Top 5 Initiations:

• BofA reinstated coverage of Flutter Entertainment (FLUT) with a Buy rating and Street-high $300 price target and added the stock to BofA’s “Europe 1” list of top ideas. The firm says the 35% upside potential implied by its price target is premised on FanDuel’s “unique positioning and vigorous market backdrop,” which leads it to put its estimates 18% ahead of 2027 consensus.
• Redburn Atlantic initiated coverage of Thermo Fisher (TMO) with a Buy rating and $680 price target. Detailed analysis of expected biopharma R&D spend suggests growth rates normalizing post-pandemic, and a shift in outsourcing practices from full-service outsourcing, or FSO, to functional service provider, or FSP, may result in Contract Research Organizations, or CROs, seeing lower revenue/contracts than historically, says the firm, which is cautious on Icon (ICLR) but more positive on Iqvia (IQV) and Thermo Fisher.
• Wells Fargo initiated coverage of Shoals Technologies (SHLS) with an Equal Weight rating and $46 price target. The company is entering new markets, which could accelerate growth over the long term, but in the near term, there is risk to 2025 consensus estimates, the firm says.
• Citi initiated coverage of Timken (TKR) with a Neutral rating and $90 price target. The firm cites Timken’s lower exposure to secular markets and its “muted” outlook for the other 70% of its portfolio for the Neutral rating.
• Seaport Research initiated coverage of Element Solutions (ESI) with a Buy rating and $33 price target as the firm expands coverage of the electronic materials industry. The firm expects Electronics to account for a growing portion of Element’s earnings over time and says that even if the electronics and industrial recovery plays out more slowly than anticipated, the company should be well-positioned to outgrow the market and drive strong bottom-line growth.