Elastic upgraded, Alibaba downgraded: 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 Elastic (ESTC) to Overweight from Equal Weight with a price target of $115, up from $70. The analyst believes the company’s revenue growth will bottom out in fiscal Q4 and reaccelerate in fiscal 2025, largely driven by generative artificial intelligence and share gains in the Log/SIEM markets.
• UBS upgraded Johnson & Johnson (JNJ) to Buy from Neutral with a price target of $180, up from $167. UBS is upgrading the shares ahead of the December 5 analyst day event given the firm’s increasingly bullish view on the company’s Innovative Medicine business, and expectations for MedTech growth at least in line with the market.
• Loop Capital upgraded Aspen Technology (AZPN) to Buy from Hold with a price target of $213, up from $180. The rating change and the more positive outlook is based on recent conversations with Emerson (EMR) that give the firm increased confidence that the joint Emerson-AspenTech product and go-to-market synergies are likely to be a greater source of upside during FY24 and beyond than initially anticipated, the analyst tells investors in a research note.
• BofA upgraded Norfolk Southern (NSC) to Buy from Neutral with a price target of $248, up from $204. Norfolk looks set to post better-than-expected Q4 volumes, has easier comps into the first half of 2024 and is showing better-than-expected network resiliency after recent network outages, the analyst tells investors.
• RBC Capital upgraded Chemours (CC) to Outperform from Sector Perform with a price target of $40, up from $28. The analyst said they are now more optimistic on slow TiO2 margin recovery, solid TSS performance/growth outlook, and settlement of PFAS liabilities, adding that they believe Chemours earnings are “currently at bottom.”

Top 5 Downgrades:

• Oppenheimer downgraded Lemonade (LMND) to Perform from Outperform without a price target. The shares are up 67% from recent lows, driven by a short squeeze following the better Q3 and Q4 outlook, less weather impact and initial rate increases driving gross margin improvement, the analyst tells investors in a research note.
• Morgan Stanley downgraded Alibaba (BABA) to Equal Weight from Overweight with a price target of $90, down from $110. The analyst lists slower turnaround on CMR and cloud, cloud spin-off withdrawal bringing uncertainty to the value-unlocking from reorganization, and the lack of capital management catalyst without cloud distribution as the negative developments weighing on the firm’s prior bullish thesis.
• Citi downgraded Spotify Technology (SPOT) to Neutral from Buy with an unchanged price target of $190. The analyst likes Spotify’s strategy and execution, but no longer believes the stock’s risk/reward is compelling.
• Piper Sandler downgraded Texas Roadhouse (TXRH) to Neutral from Overweight with an unchanged price target of $110. “This is a valuation call pure and simple,” the analyst tells investors in a research note.
• Goldman Sachs analysts removed Warner Bros. Discovery (WBD) from the firm’s Conviction List but keep a Buy rating on the shares.

Top 5 Initiations:

• Cantor Fitzgerald initiated coverage of Novo Nordisk (NVO) with an Overweight rating and $120 price target. The analyst sees the “runway for obesity remaining attractive for years to come.”
• Stifel initiated coverage of Boeing (BA) with a Buy rating and $265 price target. Boeing is on track to see build rates improve, which should position the company to see material free cash flow growth over the next two-plus years, the analyst tells investors.
• Goldman Sachs reinstated coverage of Nasdaq (NDAQ) with a Neutral rating and $58 price target following the completion of the Adenza acquisition. The firm sees Nasdaq having an opportunity to enhance its global footprint in the Financial Technology ecosystem and to accelerate growth of its recurring revenue base following the deal, but thinks meaningful earnings dilution from the deal, limited financial flexibility and near-term EPS are risks.
• Canaccord initiated coverage of Itron (ITRI) with a Hold rating and $68 price target. Itron is currently growing faster than its peer group of IIoT and networking companies and the firm believes that further improvements in supply chain disruption, completion of facility restructuring in early 2025 and delivery of lower-margin inventory could provide rationale for investors to get more bullish “within the next several months.”
• Redburn Atlantic initiated coverage of Interactive Brokers (IBKR) with a Buy rating and $100 price target, representing 30% upside to the current share price. The stock’s valuation is not a demanding for a business with its growth track record and opportunity set, and with no debt and a high margin, the analyst tells investors in a research note.