Disney and HP 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:

• Redburn Atlantic upgraded Disney (DIS) to Neutral from Sell with a $100 price target.
• Barclays upgraded HP Inc. (HPQ) to Equal Weight from Underweight with a price target of $30, up from $24. The firm is using a higher multiple for the shares as it believes unit stabilization and some hope around artificial intelligence PCs will support the stock at these levels.
• Argus upgraded Brinker (EAT) to Buy from Hold with a $72 price target. The company’s new CEO has raised menu prices and scaled back discounting and promotions, while Brinker has also simplified operational processes, revamped its menu, and improved employee retention, the analyst tells investors in a research note.
• Raymond James upgraded South State (SSB) to Outperform from Market Perform with a $90 price target. The analyst says the company’s acquisition of Independent Bank (IBTX) “checks essentially all the boxes” investors are looking for in a deal, including double-digit earnings accretion.
• Argus upgraded Zimmer Biomet (ZBH) to Buy from Hold with a $150 price target. The company has a tailwind from favorable population demographics as replacement knee and hip joints will aid the mobility and quality of life for the aging populations in the advanced economies of Asia, Europe and North America, the analyst tells investors in a research note.

Top 5 Downgrades:

• Piper Sandler downgraded Sunnova Energy (NOVA) to Neutral from Overweight with a price target of $4.50, down from $9. The analyst is less certain on consistent positive cash generation beyond 2024 for the company.
• Baird downgraded Toast (TOST) to Neutral from Outperform with an unchanged price target of $28. The analyst continues to “love the story,” saying Toast is the fastest grower in the group, but following the stock’s big run in recent months, the risk/reward is balanced, the analyst says.
• Piper Sandler downgraded Itron (ITRI) to Neutral from Overweight with an unchanged price target of $109, saying the company has capitalized on the improving semiconductor component environment and delivered a “powerful beat-and-raise story over the past year.”
• Seaport Research downgraded AES Corp. (AES) to Neutral from Buy with no price target. While noting that the company plans to add 5GW gross in solar and storage capacity annually and contending that AES is well-positioned to benefit from AI-related load growth in the U.S. given the company’s strong relationship on solar and storage projects, the firm is stepping to the sidelines given its view that the stock’s “rich multiple already reflects the value of AES’s existing renewables assets and its growth pipeline” after a six-month rally.
• Barclays downgraded Pure Storage (PSTG) to Equal Weight from Overweight with an unchanged price target of $51. The shares have meaningfully outperformed year-to-date, rallying 70%, creating a more balanced risk/reward, Barclays says.

Top 5 Initiations:

• Raymond James initiated coverage of Caesars (CZR) with a Strong Buy rating and $55 price target as part of a broader research note on U.S. Gaming operators, also calling the stock the firm’s top pick in the group. The group’s disappointing Q1 results, macro headwinds, and weaker than expected digital performance have created “compelling” valuations, and while there are headwinds in both Las Vegas and the Regionals, the stocks are pricing in significantly worse fundamentals vs. reality, the analyst tells investors in a research note.
• William Blair initiated coverage of Brink’s (BCO) with an Outperform rating and no price target. The firm says Brink’s in recent years has transitioned from a “noisy M&A story into a steadier and more predictable shareholder-return story.”
• Deutsche Bank initiated coverage of Rubrik (RBRK) with a Buy rating and $42 price target. Rubrik is “leading the charge” in disrupting and expanding the $13B market for backup and recovery software, focusing on security as the highest order design principle for helping enterprises achieve cyber resilience, says the firm.
• Leerink initiated coverage of Q32 Bio (QTTB) with an Outperform rating and $54 price target. The analyst says the company’s lead asset bempikibart has demonstrated encouraging early data and appears generally well-tolerated in healthy volunteers.
• Piper Sandler initiated coverage of Sotera Health (SHC) with a Neutral rating and $13 price target. The analyst says the industry positives for Sotera “are numerous,” and the outsourced sterilization business specifically is a category where the company and its main peer should both do well with revenue growth, profitability, and cash generation, but company-specific factors have Piper taking a “wait-and-see approach.”