Nike downgraded, FedEx 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:

• Loop Capital last night upgraded FedEx (FDX) to Buy from Hold with a price target of $365, up from $288. The firm cites the “value creating spin” and recent pullback in the stock price for the upgrade.
• JMP Securities upgraded Affirm (AFRM) to Outperform from Market Perform with a $78 price target. The analyst believes Affirm is a “long-term secular winner” at the expense primarily of the credit card industry.
• JPMorgan upgraded State Street (STT) to Neutral from Underweight with an unchanged price target of $95. The firm expects trust bank stocks to benefit from “relatively better” trends in net interest income and “reasonable” valuations.
• TD Securities upgraded BlackBerry (BB) to Buy from Hold with a price target of $4, up from $3.25, after the company’s Q3 results were better than expected. The firm says it “cannot ignore the substantial improvement” in the expected free cash flow generation from the business, citing both the low valuation and improved cash flow expectations for its upgrade.
• Morgan Stanley upgraded Brinker (EAT) to Equal Weight from Underweight with a price target of $115, up from $70. The firm says recent data suggest Brinker continues to perform very well and the upward estimate revision cycle is not done.

Top 5 Downgrades:

• Telsey Advisory downgraded Nike (NKE) to Market Perform from Outperform with a price target of $80, down from $93. The firm came away from Nike’s fiscal Q2 earnings call, the first one led by new CEO Elliott Hill, seeing a path for a turnaround that will take longer to execute, require greater investments in areas like brand marketing, and result in lower sales and profitability over the next 12 months.
• Citi downgraded Lamb Weston (LW) to Neutral from Buy with a price target of $68, down from $90. The firm says that while Lamb has opportunity to drive profit higher over the next couple of years through volume growth and operational improvements, “the starting point for this recovery is much lower than we previously anticipated.”
• BMO Capital downgraded Merck (MRK) to Market Perform from Outperform with a price target of $105, down from $136. The firm cites Merck’s commercial overhangs, namely the Gardasil franchise in China, and the need for additional clarity on how the company plans to fill the Keytruda gap with Inflation Reduction Act negotiation and biosimilars on the horizon for the downgrade.
• Monness Crespi downgraded Oracle (ORCL) to Sell from Neutral with a $130 price target. Oracle’s current price-to-earnings multiple is approximately double its long-term, historical average, the analyst tells investors in a research note.
• BTIG downgraded Lennar (LEN) to Neutral from Buy and removed the firm’s prior price target after the company missed Q4 EPS and guided Q1 EPS 31% below the prior FactSet consensus. Millrose is likely to be worth slightly less to shareholders than the firm expected and the standalone builder appears fairly-valued on its new, lower EPS forecasts, the analyst tells investors.

Top 5 Initiations:

• Guggenheim initiated coverage of Reddit (RDDT) with a Buy rating and $210 price target. Reddit is poised to capitalize on strong social media growth in “the quarters and years ahead,” argues the analyst.
• Wells Fargo initiated coverage of Liquidia (LQDA) with an Overweight rating and $20 price target. The firm says that while second to market stories like Liquidia are often overlooked due to competition, Yutrepia “doesn’t need to dominate the market to see upside to shares.”
• Oppenheimer initiated coverage of Rhythm Pharmaceuticals (RYTM) with an Outperform rating and $76 price target. The firm says the company is “distinguished” by its focus on rare obesity disorders for which commonly-prescribed drugs are poorly suited.
• Wedbush initiated coverage of Xometry (XMTR) with an Outperform rating and $48 price target. The firm says that with a growing network of buyers and suppliers and leading artificial intelligence pricing and matching algorithms, Xometry is well positioned to take share within the global custom manufacturing industry.
• Cantor Fitzgerald initiated coverage of Applied Digital (APLD) with an Overweight rating and $15 price target.