Starbucks, Spotify 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:

• OTR Global upgraded its view of Salesforce (CRM) to Positive from Mixed, citing partner checks that indicated a slight uptick in new-logo activity and larger deal sizes during fiscal Q3.
• UBS upgraded 3M (MMM) to Buy from Neutral with a price target of $184, up from $130, following analyst coverage transfer. The firm believes the company’s new outsider CEO, William Brown, is “hitting all the right notes,” including reallocating spending towards reinvigorating growth, improving order fill rates and investing in the sales force.
• BTIG upgraded On Holding (ONON) to Buy from Neutral with a $64 price target. BTIG believes that Q3 showed the company’s “true top-line momentum and go-forward earnings power,” which the firm thinks will continue “into 2025 and beyond.”
• Evercore ISI upgraded Cummins (CMI) to Outperform from In Line with a price target of $408, up from $294. The firm adjusted ratings in the machinery sector, saying a Trump win and “Red sweep” requires less caution but not broad bullishness with the current starting point challenging.
• UBS upgraded Carrier Global (CARR) to Buy from Neutral with a price target of $94, up from $66, following analyst coverage transfer. The company will exit this year as a pure play HVAC company after $8B in net proceeds from announced divestitures over the past 12 months, a plan that is occurring at a time of good orders, which has positive implications for prospective growth, the firm tells investors in a research note.

Top 5 Downgrades:

• Redburn Atlantic downgraded Starbucks (SBUX) to Sell from Neutral with a price target of $77, down from $84. The firm models a return to comp growth in fiscal 2025 under new CEO Brian Niccol but questions what level of comp growth the business can sustain given less support from ticket.
• Phillip Securities downgraded Spotify (SPOT) to Accumulate from Buy with a price target of $485, up from $420, following the Q3 report. The firm cites valuation for the downgrade following the recent share price gains.
• Evercore ISI downgraded Caterpillar (CAT) to Underperform from In Line with a price target of $365, up from $321. The firm says Trump’s policies “undoubtedly will have wildcard implications hard to handicap in one’s models.” Evercore also downgraded Illinois Tool Works (ITW) to Underperform and Eaton (ETN) to In Line.
• Canaccord downgraded Doximity (DOCS) to Hold from Buy with a price target of $60, up from $40. The firm recognizes that Doximity is “currently executing flawlessly,” but with the 30% gain in shares post-earnings, it appears the expectation to a return to the years of really robust growth, 20% or much higher, is increasingly being priced into the stock.
• Exane BNP Paribas downgraded RH (RH) to Underperform from Neutral with a price target of $253, down from $274. The firm says RH exited Q2 with a seven-times leverage ratio, making liquidity a “growing concern.”

Top 5 Initiations:

• BofA resumed coverage of Penn Entertainment (PENN) with a Neutral rating and $22 price target after moving from No Rating. The firm thinks Penn has returned to trading on fundamentals and sees the risk reward as balanced.
• Oppenheimer initiated coverage of Pure Storage (PSTG) with an Outperform rating and $70 price target. The firm says its bullish stance is predicated upon the view that Pure Storage is a beneficiary of rising creation and storage of unstructured data that is used to build and deliver artificial intelligence applications.
• Oppenheimer initiated coverage of Commvault (CVLT) with an Outperform rating and $200 price target. The firm views Commvault as a beneficiary of the rising importance of data, which is driving backup storage TAM; benefiting from growing data security breaches and ransomware attacks that are creating new revenue opportunities; and as a leading provider of BaaS and DRaaS offerings.
• Oppenheimer initiated coverage of Rubrik (RBRK) with a Perform rating and no price target. The firm expects management to continue with its heavy investment and expects Rubrik to remain at an operating loss for the next three years.
• Oppenheimer initiated coverage of NetApp (NTAP) with a Perform rating and no price target. The firm says it is still “early days” for the company’s evolution to a storage-as-a-service provider, which creates execution and operating risk.