Spotify upgraded, Freshpet 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:

• Redburn Atlantic upgraded Spotify (SPOT) to Neutral from Sell with a price target of $545, up from $230, after resuming coverage of the name. The firm expects “more to come” from audiobooks and Spotify’s super-premium tiering, but it believes the share price already reflects an “optimistic” near-term outlook.
• Baird upgraded Capital One (COF) to Outperform from Neutral with a price target of $200, up from $190. The firm believes the recent weakness in the shares has resulted in an opportunity to “buy a business that should be one of the most profitable risk-adjusted returns in credit sensitive financials over the next several years.”
• Citizens JMP upgraded Unity (U) to Outperform from Market Perform with a $30 price target. The firm believes the upcoming launch of Vector represents a “significant catalyst” that can drive share gains of the $100B mobile gaming advertising market.
• Wolfe Research upgraded MSG Entertainment (MSGE) to Outperform from Peer Perform with a $46 price target. The company’s high-single-digit sales growth potential and “permanent winner status are deeply undervalued” at current share levels, the firm tells investors in a research note.
• Goldman Sachs upgraded GE HealthCare (GEHC) to Buy from Neutral with a price target of $100, up from $85. The firm’s confidence in the outlook for medical equipment spending in China has improved based on its “on-the-ground due diligence.”

Top 5 Downgrades:

• Oppenheimer downgraded Freshpet (FRPT) to Perform from Outperform without a price target. The firm says that following the company’s “disappointing” guidance at CAGNY Conference, “more subdued” commentary from management lately, and a slowdown to start the year, investors should await signs of sales stabilization “before playing for a potential reacceleration trade.”
• Keefe Bruyette downgraded Lennar (LEN) to Market Perform from Outperform with a price target of $141, down from $152. Lennar’s valuation is now near parity to its large-cap peers and there are potential downside risks to estimates, the firm says.
• Morgan Stanley downgraded Afya (AFYA) to Underweight from Equal Weight with a price target of $17, down from $19. The Brazil education sector is facing regulatory headwinds and margin constraints, the firm tells investors in a research note.
• Jefferies downgraded Green Plains (GPRE) to Hold from Buy with a price target of $6, down from $14. The firm reduced estimates to reflect likely pressure on the company’s ethanol and protein margins.
• Leerink downgraded 2seventy Bio (TSVT) to Market Perform from Outperform with a price target of $5, down from $9, to reflect the pending takeover by Bristol Myers (BMY). The firm does not expect an alternative acquirer will emerge, and thinks the transaction with Bristol will close.

Top 5 Initiations:

• Needham initiated coverage of Backblaze (BLZE) with a Buy rating and $8 price target. The firm believes the company’s recent changes should bring improved productivity and win-rates exiting 2024.
• Melius Research initiated coverage of Murphy USA (MUSA) with a Buy rating and $600 price target. The company has a low-cost structure, and its “high-growth, shareholder-focused business model” is positioned to capitalize on rising industry fuel margins, the firm tells investors in a research note.
• Jefferies initiated coverage of Primoris (PRIM) with a Buy rating and $73 price target. Profitable organic growth, margin expansion, sustainable cash flow, and financial and operational execution were all on display in 2024 with momentum building into 2025-2026, the firm says.
• Craig-Hallum initiated coverage of El Pollo Loco (LOCO) with a Buy rating and $18 price target. The firm notes that the new management team with extensive QSR experience is revitalizing the brand and drove record AUVs along with about 200 bps of margin expansion in FY24.
• Northland initiated coverage of Red Cat (RCAT) with an Outperform rating and $13 price target. Last year’s U.S. Army award of a large, short range reconnaissance drone deal for Red Cat’s Black Widow drone “produced an avalanche of incremental interest,” says the firm, which forecasts $80M of revenue for calendar 2025 and $150M for calendar year 2026.