Reddit initiated, Home Depot 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 upgraded Home Depot (HD) and Lowe’s (LOW) to Buy from Hold with price targets of $460 and $300, up from $360 and $250, respectively. The firm says recent store checks indicate the home improvement retail demand has bottomed, and while the hurricanes may disrupt current quarter sales, investors will likely look beyond this to a future demand lift.
• Jefferies upgraded Southwest (LUV) to Hold from Underperform with a price target of $32, up from $24. The firm “can get behind” about $2B of Southwest’s targeted $4B in incremental EBIT by 2027, which enhances the risk-reward profile over the next 12 months in a U.S. domestic market that could grow low-end low-single digits in 2025.
• Citi upgraded Norwegian Cruise Line (NCLH) to Buy from Neutral with a price target of $30, up from $20. Norwegian’s shift in strategy gives Citi confidence that the company’s “considerable pricing opportunity will not be offset by runaway costs.”
• Morgan Stanley upgraded Affirm (AFRM) to Equal Weight from Underweight with a price target of $37, up from $22. The company has demonstrated how better distribution, 0% promos, and lower pricing could attract and retain higher income consumers, the firm says.
• Wells Fargo upgraded Valero (VLO) to Overweight from Equal Weight with a price target of $165, down from $172. The firm believes cracks have bottomed, diesel demand is improving, lower prices and payrolls support gasoline demand and refined product inventories are below normal.

Top 5 Downgrades:

• Exane BNP Paribas downgraded Ciena (CIEN) to Neutral from Outperform with a price target of $67, up from $59. The firm says the company’s artificial intelligence opportunities are longer-term rather than a near-term catalyst.
• Piper Sandler downgraded Blackstone (BX) to Neutral from Overweight with an unchanged price target of $149. The firm decreased its 2024 and 2025 estimates by 9% and 7%, respectively, saying realizations have been slow to come back as shown by the company’s Q3 update.
• Exane BNP Paribas downgraded Exxon Mobil (XOM) to Underperform from Neutral with a $105 price target. With a weaker macro-outlook, the firm downgraded the most refining-exposed names.
• Redburn Atlantic downgraded FactSet (FDS) to Sell from Neutral with a price target of $380, down from $420. Despite investments, FactSet’s organic sales growth has halved in the past 12 months and its productivity screens at the bottom end of the peer group, the firm says.
• Redburn Atlantic downgraded Morningstar (MORN) to Neutral from Buy with an unchanged price target of $340. The company’s licensed-based revenue growth has decelerated to its slowest pace since 2019, while its productivity levels screen as low versus peers, the firm tells investors in a research note.

Top 5 Initiations:

• Jefferies initiated coverage of Reddit (RDDT) with a Buy rating and $90 price target. The firm estimates the company’s EBITDA more than doubles in the next two years to $450M, 12% above the 2026 consensus, driven by “peer-high” growth in users and a nascent opportunity to close the monetization gap to peers.
• TD Cowen initiated coverage of Chewy (CHWY) with a Buy rating and $38 price target. The firm says the company has a strong retail business coupled with a growing pet health offering, including the largest online pet pharmacy. It expects 9% annual revenue growth through fiscal 2029, coupled with EBITDA margin expansion and strong free cash flow conversion.
• Guggenheim initiated coverage of Deckers Outdoor (DECK) with a Neutral rating and no price target. The firm cites valuation for the Neutral rating as it believes Deckers’ current valuation effectively reflects the company’s attractive profitability and growth prospects “as it rightfully deserves a premium to its peer group.”
• Guggenheim initiated coverage of Crocs (CROX) with a Buy rating and $182 price target. The firm believes the Crocs brand is “here to stay,” and thinks current share levels are “more than adequately pricing in various levels of skepticism.” Guggenheim also started coverage of G-III Apparel (GIII) with a Buy rating and $36 price target.
• Deutsche Bank initiated coverage of HP Enterprise (HPE) with a Hold rating and $22 price target. The firm sees “multiple routes for potential upside” in the shares, but voices concerns around heightened execution risk, as the company embarks on a bigger strategic push into networking via the pending Juniper acquisition.