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Here are the biggest calls on Wall Street on Friday: Morgan Stanley reiterates Rivian as overweight Morgan Stanley said it’s standing by shares of the electric vehicle company. “As Rivian emerges from an era of acute supply chain and production challenges, investors look to see what the company can do as the units scale, pricing recalibrates and cost structure improves. While there’s a lot of wood to chop, RIVN’s path towards breakeven is deterministic to the equity story.” Bank of America upgrades Axis Capital to buy from underperform Bank of America said in its double upgrade of the insurance and reinsurance company that the tide is turning. “Over the past year, shares of AXIS have notably underperformed reinsurance peers as property-catastrophe pricing surged in the year following AXIS’s June announcement of exiting property reinsurance markets. However, our pessimistic outlook has changed.” TD Cowen initiates Celsius Holdings as outperform TD said in its initiation of the energy drink company that it’s “transforming the category.” “We initiate coverage of CELH with an Outperform rating and a $250 PT. As the strong #3 in U.S. energy drink category, the growing popularity of Celsius’ differentiated products is transforming the category and driving significant new incremental consumer engagement.” HSBC initiates ServiceNow as buy HSBC said in its initiation of ServiceNow that it sees “near-term revenue and earnings growth above peers.” “The leader in the enterprise workflow management vertical. We see strong turnover growth above peers and margin expansion potential.” TD Cowen initiates Anheuser-Busch InBev as outperform TD said “global growth opportunities abound” for the beverage giant. “We initiate coverage of ABI with an Outperform rating and a €63 PT. U.S. challenges are well understood, and trends aren’t getting worse. Meanwhile, strong top-line trends (in the rest of the Americas) and margin tailwinds from easing commodities should drive DD EPS growth in FY24.” Read more about this call here. Needham initiates Arm as hold Needham said in its initiation of Arm that the stock’s valuation is full right now. ” Arm’s architecture is a foundation of smartphones, but we believe the world is entering a post smartphone era that will see high-performance computing and IoT lead the next phase of semiconductor growth.” Piper Sandler upgrades KeyCorp to overweight from neutral Piper said in its upgrade of the stock that it’s “comfortable” with its net interest income trajectory. “But first, we are raising KEY from N to OW. While the stock has already begun to recover, it remains among the worst YTD performers in our coverage list. With funding issues beginning to move to the rear-view, we are becoming more comfortable with KEY’s NII [net interest income] trajectory.” Redburn Atlantic Equities upgrades Estee Lauder to neutral from sell Redburn said in its upgrade of Estee that the company is seeing a “strong technical benefit as its customers return to more normal ordering patterns.” “A protracted earnings downgrade cycle is waning, and we upgrade the stock to Neutral from Sell. But the risk to medium-term profitability prevents further bullishness.” UBS initiates TKO Group as buy UBS said the WWE and UFC combined company is a rare play in live sports. “Through the combination of WWE and UFC, TKO is a rare pure-play in live sports entertainment where rights renewals and merger synergies should enable a 15% EBITDA CAGR, rapid de-leveraging and $4B+ of capacity for shareholder returns thru ’27E.” Wolfe initiates Applied Materials as outperform Wolfe said Applied Materials is the firm’s favorite name in the semiconductor capital equipment space. “Balanced exposure to leading edge, lagging edge, and memory; well positioned for cylical rebound in logic/memory spending.” Goldman Sachs initiates Casella Waste Systems as buy Goldman said in its initiation of the waste company that it’s a “compounder with pricing.” ” Casella has 60% local market share within its footprint — the highest in our coverage — driving industry leading pricing and growth prospects.” MoffettNathanson downgrades DoorDash to market perform from outperform Moffett said in its downgrade of DoorDash that the company is exposed to the resumption of student loan payments. “Does the resumption of loan repayments introduce bookings risk to food delivery? We are afraid the answer is yes.” HSBC initiates Zoom as buy HSBC said Zoom is the leader in video conferencing. “We apply a reasonable valuation discount; see margin upside potential. As operations normalize, we expected turnover growth to reaccelerate.” HSBC initiates Deere as buy HSBC said in its initiation of Deere that it sees “upside in the cycle.” “The shares have declined 6% year to date on concerns about a peaking US equipment replacement cycle and are trading at just 11.1x 2024e PE. We think growth in renewable diesel and sustainable aviation fuel should keep crop prices and farmer incomes high and drive continued upside in the cycle.” Morgan Stanley upgrades Keysight Technologies to overweight from equal weight Morgan Stanley said in its upgrade of Keysight that investors should buy the dip in shares of the electronic test manufacturer. “We think current downturn presents a strong buying opportunity, as valuation currently misses double digit earnings profile and diverse and long-term revenue growth drivers.” Read more about this call here. HSBC initiates Salesforce as buy HSBC said in its initiation of the stock that it’s a “margin expansion story.” “Leader in the CRM software subsector; benefits from transitions to the cloud. Shifting from a growth story to a margin expansion story.” HSBC initiates Snowflake as buy HSBC said Snowflake is well positioned for AI. “We see top- and bottom-line growth above peers with margin expansion. We expect key near-term operational metrics to outperform those of peers.” HSBC initiates Oracle a buy HSBC said in its initiation of Oracle it likes the company’s cloud platform. “Leader in the enterprise software subsector; one of the first to the cloud. Its revamped cloud platform offers upselling opportunities and growth.” Bank of America upgrades Unity to buy from neutral Bank of America said the gaming software company is “unlocking the engine for growth.” “We are upgrading Unity from Neutral to Buy based on: 1) our proprietary analysis implies improved monetization of the company’s industry leading mobile game creation engine; 2) our view that mobile gaming advertising metrics have stabilized with easier comps in 2H23.” Read more about this call here . UBS reiterates Amazon as buy UBS said Amazon is still the firm’s top pick in the internet space. “We also think Amazon can see NA [North America] retail margins expand to double digits over time.” Northcoast upgrades Shake Shack to buy from hold Northcoast said in its upgrade of the stock that it sees strengthening fundamentals. “We are raising Shake Shack to BUY to reflect our more bullish outlook on the brand’s fundamentals.” UBS reiterates Apple as buy UBS said its survey checks show Apple remains the preferred brand in the U.S. “Notably, 31% of respondents in the US named Apple as the brand they are most likely to buy, up 800 bps relative to 6 months ago and the the strongest reading since Feb-21. In China, Apple ticked down 100 bps sequentially to 20%, but was tied with Lenovo for the brand consumers are most likely to buy.” Goldman Sachs reiterates Salesforce as buy Goldman said Salesforce is “well positioned for AI.” “As the demand backdrop screens stable we see the potential for pronounced end-user productivity setting up the stage for an improving growth narrative, without compromising the sizable step-up expected in operating profitability, and can be a boon for the stock.” Bank of America reiterates Adobe as buy Bank of America said it’s standing by its buy rating after Adobe’s earnings report on Thursday and that it sees more pricing power and AI upside. “However, the shares are still trading at 25x our CY25 FCF estimate, or 1.5x adjusted for mid-teens growth, which is not unreasonable to the software GARP group given potential for meaningful acceleration from AI/price increases as we move through the year.” Read more about this call here. Morgan Stanley reiterates Ford and General Motors as overweight Morgan Stanley said it’s standing by its overweight rating on shares of Ford and GM despite the UAW strike. “Given this, we think downside risks in the shares from this news in isolation should be limited.”
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