Ulta Beauty downgraded, Palo Alto 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:

• Rosenblatt upgraded Palo Alto Networks (PANW) to Buy from Neutral with a price target of $430, up from $390, driven by the “strong” Q1 performance and the evident success of its platform strategy, which is driving larger deals and “impressive” NGS ARR growth.
• Raymond James upgraded On Holding (ONON) to Strong Buy from Outperform with a price target of $63, up from $58, and added the shares to its Analyst Current Favorites List. The firm says the company’s “strong” year-to-date results increases its confidence in upside to estimates based on positive brand and product heat, an opportunity to grow awareness, optionality to scale wholesale, and capability to overcome operational hurdles.
• Compass Point upgraded Pebblebrook Hotel (PEB) to Buy from Neutral with an unchanged price target of $17. The firm is making “a contrarian trading call,” noting that the stock has lagged sector peers meaningfully year-to-date, but should post the second highest adjusted EBITDA growth in 2025, based on the firm’s estimates.
• Citi upgraded DT Midstream (DTM) to Buy from Neutral with a price target of $115, up from $90. The recently announced $1.2bB acquisition of three Federal Energy Regulatory Commission-regulated pipelines “distinguishes the company and starts DTM on a path to expanding its investor base,” the firm tells investors in a research note.
• Morgan Stanley upgraded Evertec (EVTC) to Equal Weight from Underweight with a price target of $35, up from $33. The firm thinks the company’s setup has improved given its diversification into Latin American and stabilizing Puerto Rico trends.

Top 5 Downgrades:

• William Blair downgraded Ulta Beauty (ULTA) to Market Perform from Outperform without a price target. The firm believes Ulta’s comp and operating margin estimates are optimistic and embed expectations of an early 2025 inflection in the beauty category, which is unlikely.
• Goldman Sachs downgraded XPeng (XPEV) to Neutral from Buy with a $12.50 price target. The firm cites valuation for the downgrade following the stock’s outperformance over the last two months.
• BofA downgraded Adient (ADNT) to Neutral from Buy with a price target of $24, down from $30, based on a lack of near-term catalysts as well as operating results “pointing flat to down” in FY25.
• BofA downgraded RBC Bearings (RBC) to Neutral from Buy with a price target of $335, up from $330. While the firm continues to view RBC as “a quality business,” it sees little incremental upside to the existing growth outlook.
• Barclays downgraded TD Bank (TD) to Underweight from Equal Weight with a price target of C$79, down from C$80. The firm says Canadian bank earnings in Q4 should see seasonal headwinds, and the impact from lower rates though asset management should help fee revenue.

Top 5 Initiations:

• Wells Fargo initiated coverage of GE Vernova (GEV) with an Overweight rating and $385 price target. GE Vernova is a primary beneficiary of the projected long-term growth in power demand driven by the artificial intelligence data center buildout, U.S. reshoring, and electrification trends, the firm tells investors in a research note.
• Morgan Stanley initiated coverage of Apellis (APLS) with an Equal Weight rating and $31 price target. The firm expects a “roughly even split” of the geographic atrophy market as considerations beyond safety drive prescribing decisions.
• Morgan Stanley initiated coverage of UMB Financial (UMBF) with an Overweight rating and $156 price target, which implies 30% upside. The firm sees UMB as one of the best ways to play lower interest rates among the mid-cap banks.
• Wells Fargo initiated coverage of Vera Therapeutics (VERA) with an Overweight rating and $70 price target. The firm likes the Vera setup into major 2025 catalysts and sees a large opportunity for atacicept in the $10B IgAN market.
• Litchfield Hills initiated coverage of Innovation Beverage (IBG) with a Buy rating and $43 price target. The firm says the company is capitalizing on the expanding presence of lifestyle focused beverages, and the shares “appear to be priced significantly below absolute and comparative metrics.”