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:
- Bernstein upgraded PayPal (PYPL) to Outperform from Market Perform with a price target of $78, up from $71. The firm is encouraged by improved transaction gross profit performance from the company’s positive branded growth, Braintree pricing initiatives, and Venmo monetization.
- BofA upgraded Lockheed Martin (LMT) to Buy from Neutral with a price target of $635, up from $465. Lockheed’s upgraded F-35s with Tech Refresh-3 packages have restarted deliveries, notes the firm, which views the company as poised to outperform on strong global demand across segments as it anticipates Lockheed benefiting from ramping programs like the PAC-3, HIMARS, JASSM, and LRASM.
- BofA upgraded Ecolab (ECL) to Buy from Neutral with a price target of $272, up from $251. The shares sold off following Ecolab’s 35% earnings growth in Q2 on 4% organic sales, but the firm found the results “constructive” and has increased conviction that Ecolab can generate mid-teens earnings growth in the coming years along with expanding operating margins. Citi also upgraded Ecolab to Buy from Neutral with a price target of $265, down from $267.
- BofA upgraded RTX (RTX) to Buy from Neutral with a price target of $140, up from $110. As the Geared Turbo Fan, or GTF, fix is ongoing, the firm is now more confident the scale and scope of the fix has been fairly considered by the company and sees potential for further derisking as Maintenance, Repair, and Overhaul, or MRO, throughput increased 10% quarter-over-quarter with more shops coming online.
- Mizuho double upgraded Upstart (UPST) to Outperform from Underperform with a price target of $31, up from $17. The company “doesn’t have many fans” with short interest at 33% and zero sell-side buy ratings, but the firm says the growing likelihood of lower interest rates, improving borrower risk, lower delinquencies and positive industry commentary “are all signs that the skies might be brightening,” allowing Upstart to “re-open the credit box and increase issuance of loans.”
Top 5 Downgrades:
- TD Cowen downgraded McDonald’s (MCD) to Hold from Buy with a price target of $280, down from $285. The firm says the positive stock reaction to the company’s “challenged” Q2 results and “soft” second half of 2024 outlook presents a balanced risk/reward over the next 12-months.
- Benchmark downgraded IPG Photonics (IPGP) to Hold from Buy with no price target after the company posted June-end quarter results that were in line with prior guidance, but gave a forecast for the September-ed quarter that was well below investor expectations.
- Wolfe Research downgraded Charter (CHTR) to Peer Perform from Outperform. The company’s EBITDA trends proved resilient amid peak disruption, but its price and cost-driven strategy warrants a low multiple, the firm tells investors in a research note.
- Craig-Hallum downgraded Grocery Outlet (GO) to Hold from Buy with a price target of $20, down from $32. The firm says its checks over the past two months indicate a deceleration in same-store sales since May that creates potential downside to Q2/Q3 estimates.
- Citi downgraded Penumbra (PEN) to Neutral from Buy with a price target of $178, up from $165. The company’s strong quarter was accompanied by a cut to 2024 revenue guidance “that was multi-factorial,” the firm tells investors in a research note.
Top 5 Initiations:
- Raymond James initiated coverage of On Holding (ONON) with an Outperform rating and $46 price target. The firm expects strong demand and operating margin expansion to drive annual growth of over 25% for revenue, over 30% for EBITDA, and over 50% for earnings through 2026.
- Benchmark initiated coverage of Blink Charging (BLNK) with a Buy rating and $5 price target. Blink Charging, which manufactures, sells, and owns/operates primarily level 2 networked electric vehicle charging equipment, is “well-positioned” with a focus on Level 2 chargers, which is expected to be 90% of the market, the firm tells investors.
- William Blair initiated coverage of Applied Therapeutics (APLT) with an Outperform rating. The firm says Applied Therapeutics is an “under-the-radar company” developing a “nice mix” of therapeutics targeting rare diseases and some larger indications with potential for several major value inflections over the next 12 months.
- Raymond James initiated coverage of Black Diamond Therapeutics (BDTX) with an Outperform rating and $20 price target. The firm sees the potential for BDTX-1535 to potently target a broad spectrum of Estimated Glomerular Filtration Rate mutations in non-small cell lung cancer that are inadequately addressed by current standard of care, including non-classical EGFR mutations, osimertinib resistance mutations, and the L855R classical mutation, the firm tells investors in a research note.
- Truist initiated coverage of Nurix Therapeutics (NRIX) with a Buy rating and $36 price target. The firm says the company’s lead drug, NX-5948, has potential to be best-in-class Bruton’s tyrosine kinase degrader and may be used in B-cell cancers, a multi-billion market.