Disney initiated, Cisco 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:

• TD Cowen upgraded Universal Health (UHS) to Buy from Hold with a price target of $283, up from $220. The company’s EBITDA consensus estimates over the next 3-12 months may move 15%-20% higher, and potentially higher long-term as the acceleration of state directed payment expansion is more readily apparent, the firm says.
• Citi upgraded Cisco (CSCO) to Buy from Neutral with a price target of $62, up from $52. The firm expects the company to benefit from an expanding ethernet artificial intelligence total addressable market and a narrowing valuation gap versus peers.
• Baird upgraded Grainger (GWW) to Outperform from Neutral with a price target of $1,230, up from $975. The firm likes the cyclical setup for the industrial distribution group heading into the Q3 report, citing the sector’s leverage to rate cuts and accelerating end markets in 2025 and beyond. Baird also upgraded Wesco (WCC) to Outperform from Neutral with a price target of $550, up from $522.
• BofA upgraded Corteva (CTVA) to Buy from Neutral with a price target of $67, up from $59, citing a “flurry” of recent tailwinds that position the company for success in 2025 and beyond.
• BofA upgraded Westlake (WLK) to Neutral from Underperform with a price target of $159, up from $151. The firm says near-term concerns are now balanced with a more favorable mid- and long-term opportunity.

Top 5 Downgrades:

• HSBC downgraded Estee Lauder (EL) to Hold from Buy with a price target of $100, down from $130. The firm now takes the view that the implementation of the cost-cutting program implies that the replacement of Estee Lauder’s CEO “can only be internal” as it argues that if an external candidate had been locked in, the market “would have heard about it by now.”
• TD Cowen downgraded Yum! Brands (YUM) to Hold from Buy with a price target of $145, down from $156. The stock’s risk/reward is balanced as there is risk development will miss consensus in 2024 and 2025, while the removal of Taco Bell breakfast at up to two-thirds of U.S. locations presents a 1%-2% comp headwind that risks a negative sales revision, the firm tells investors in a research note.
• Susquehanna downgraded Enphase Energy (ENPH) to Neutral from Positive with a price target of $104, down from $147. The firm cites the slower than expected recovery in U.S. residential solar and market share concerns, coupled with the stock’s premium valuation, for the downgrade.
• Wells Fargo downgraded Omnicom (OMC) to Equal Weight from Overweight with a price target of $110, up from $106. The company’s Q3 growth “came in strong,” but the stock has had a nice run and there is now limited scope for further margin and multiple expansion, the firm says.
• Maxim downgraded Helius Medical (HSDT) to Hold from Buy. The company has received reimbursement payment determination updates from Centers for Medicare & Medicaid Services for its Portable Neuromodulation Stimulator – PoNS – controller and mouthpiece, and both of these were disappointing, the firm notes.

Top 5 Initiations:

• Piper Sandler initiated coverage of Disney (DIS) with a Neutral rating and $95 price target. The firm sees limited upside to estimates over the next few quarters given the moderation in the Disney’s experiences segment.
• Jefferies initiated coverage of Instacart (CART) with a Hold rating and $43 price target. Instacart is a leading player in online grocery delivery, but the firm thinks further share losses are likely to cap the company’s volume growth and upside to consensus estimates, while a recent stagnation in advertising penetration reduces visibility into its margin outlook.
• Wells Fargo initiated coverage of Autodesk (ADSK) with an Overweight rating and $340 price target. The firm has confidence the company’s recent model transitions will help “pave a cleaner path forward” for reaccelerating revenue growth and a return to 30% free cash flow margin.
• Roth MKM resumed coverage of AutoZone (AZO) with a Buy rating and $3,634 price target. The firm says that when adding in a “rapidly growing do-it-for-me and professional offering, the company can maintain a pace of sales and earnings growth through fiscal 2026. Roth MKM also resumed coverage of O’Reilly Automotive (ORLY) with a Buy rating and $1,337 price target, and Advance Auto Parts (AAP) with a Neutral rating and $40 price target.
• Scotiabank initiated coverage of Vertex Pharmaceuticals (VRTX) with a Sector Perform rating and $480 price target. Vertex is likely to continue leading the cystic fibrosis market, and pipeline efforts have led to multiple high-profile “shots on goal,” but the continued success is already priced into the shares, the firm argues. Scotiabank also started coverage of Alnylam (ALNY), Travere Therapeutics (TVTX), Vera Therapeutics (VERA), Kero Therapeutics (KROS), Agio Pharmaceuticals (AGIO), Liquidia (LQDA), Geron (GERN), Rocket Pharmaceuticals (RCKT), Ocular Therapeutix (OCUL), BridgeBio (BBIO), and EyePoint (EYPT) with Outperform ratings, and Apellis (APLS) and Beam Therapeutics (BEAM) with Sector Perform ratings.