Latest Business News
Major Calls on Wall Street: Bank of America, KeyBanc, Truist, Piper Sandler, JPMorgan, Morgan Stanley, BMO, DA Davidson, Deutsche Bank, Oppenheimer, Baird, Goldman Sachs
Bank of America Downgrades Herc Holdings to Underperform
Bank of America downgraded Herc Holdings to underperform from buy, citing concerns about the ongoing writers' and actors' strike in Hollywood. The strike, which is expected to last for months, is likely to impact Herc Holdings and is not accounted for in consensus estimates. The equipment rental company may face challenges in the near term due to the strike, leading to a decrease in flow-through.
KeyBanc Reiterates McDonald's as Overweight
KeyBanc remains bullish on McDonald's ahead of the fast food giant's earnings report. The investment bank believes that McDonald's is well-positioned to report another quarter of industry-leading same-store sales growth. The company's operational excellence, strategic price increases, and marketing programs are expected to contribute to its success in the upcoming quarter.
Truist Reiterates Amazon as Buy
Truist maintains a bullish outlook on Amazon ahead of its earnings report. The investment firm's proprietary tracking of Amazon's North American e-commerce business shows resilient demand, inline with or slightly ahead of consensus estimates. Additionally, Truist expects the company's ads business to outperform, further supporting its buy rating.
Piper Sandler Upgrades SL Green to Overweight
Piper Sandler upgraded SL Green, a real estate investment trust, to overweight, citing favorable tailwinds. Despite a recent sell-off, the investment firm believes that SL Green has strong potential for growth. The company's stock price has risen significantly in recent months, indicating positive market sentiment.
Piper Sandler Downgrades Discover to Neutral
Piper Sandler downgraded Discover, a credit card company, to neutral due to several negative catalysts. Discover recently unveiled a "misclassification" issue with fees charged to merchants, resulting in a significant charge in the second quarter. The downgrade reflects concerns about these challenges and their impact on the company's performance.
Piper Sandler Downgrades Carvana to Neutral
Piper Sandler downgraded online used car company Carvana mainly due to its valuation. The investment firm previously upgraded Carvana based on its discounted stock price resulting from bankruptcy risk. However, as the stock price has risen and the bankruptcy scare has diminished, Piper Sandler believes that the company is approaching a fair valuation.
JPMorgan Downgrades Blackstone to Neutral
JPMorgan downgraded Blackstone, an investment firm, to neutral primarily based on its valuation. The stock is currently appropriately valued, and JPMorgan believes that for the multiple to expand further, organic growth supported by perpetual fund growth is needed. The current depressed sentiment for real estate investing is weighing down the company's potential for growth.
Morgan Stanley Reiterates Eli Lilly as Overweight
Morgan Stanley reiterated its overweight rating on Eli Lilly, a pharmaceutical company. The firm raised its price target on the stock and views Eli Lilly as a leader in the next generation of obesity medicine. Despite increasing competition, Morgan Stanley expects Eli Lilly to maintain its position in the obesity market.
BMO Downgrades Sunnova to Market Perform
BMO downgraded Sunnova, a solar energy company, mainly due to its valuation. While the company has demonstrated good execution in a tough market, BMO believes that the positives are already reflected in the share price. The downgrade reflects concerns about the company's potential for further growth.
DA Davidson Upgrades Harley-Davidson to Buy
DA Davidson upgraded motorcycle company Harley-Davidson based on strong dealer feedback and positive progress with inventory clearance. The firm believes that Harley-Davidson's U.S. retail performance in the second quarter exceeded expectations. Additionally, the company's new product introductions have received positive feedback from dealers.
Bank of America Upgrades Consolidated Edison to Buy
Bank of America upgraded utility company Consolidated Edison to buy, citing double-digit return potential. The company is executing a $1 billion buyback and using the proceeds from its unregulated renewables sale to reduce its parent debt load. Bank of America sees favorable prospects for Consolidated Edison's future performance.
Deutsche Bank Downgrades SiriusXM to Sell
Deutsche Bank downgraded SiriusXM, a satellite radio company, primarily due to its valuation. The stock price has experienced significant increases, leading to concerns about its current level compared to the 12-month price target. Deutsche Bank believes that the stock is overvalued and recommends selling.
Oppenheimer Initiates Coverage on Live Nation as Outperform
Oppenheimer initiated coverage on entertainment concert company Live Nation, advising investors to outperform. The firm sees upside potential for Live Nation, as advancements in music streaming enhance global distribution and fan engagement. This is expected to create more opportunities and benefit Live Nation's leading concert scale.
Oppenheimer Reiterates Nvidia as Outperform
Oppenheimer maintains its outperform rating on Nvidia, a technology company and leader in artificial intelligence (AI). The firm views Nvidia as a top pick in the industry and a significant beneficiary of AI advancements. Nvidia's comprehensive hardware and software ecosystem for training and inferencing large language models solidify its position.
Baird Reiterates Alphabet as Outperform
Baird raised its price target on Alphabet, the parent company of Google, and maintains its outperform rating. The firm is optimistic about Alphabet's earnings outlook, primarily due to higher sector/comparable multiples and generally stable field checks for the second quarter. The positive trends support a bullish sentiment towards the company.
Wedbush Reiterates Roku as Outperform
Wedbush stands by its outperform rating on streaming platform Roku. The firm expects Roku to return to meaningful profitability as a platform and FAST channel leader once macroeconomic trends improve. The anticipated inflection point is expected to occur by the end of the year, assuming no major economic shifts.
Goldman Sachs Reiterates Microsoft as Outperform
Goldman Sachs raised its price target on Microsoft and maintains its outperform rating. The firm remains bullish on Microsoft ahead of its earnings report. Despite concerns about increased capital expenditures, Goldman Sachs believes that the revenue potential of the company outweighs these investments.
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Conclusion
The recent major calls on Wall Street from various investment banks provide valuable insights for both established and new businesses. One hot take from these recommendations is the potential impact of the ongoing writers' and actors' strike in Hollywood. Bank of America downgraded Herc Holdings, an equipment rental company, citing concerns about the strike that is expected to last for months. This could have a significant effect on Herc Holdings, leading to a decrease in flow-through. For new businesses considering entering the equipment rental industry, it is vital to closely monitor and evaluate the potential risks associated with strikes or labor disputes that could impact the overall industry landscape.
On the other hand, positive recommendations such as KeyBanc's overweight rating on McDonald's highlight the importance of operational excellence and strategic initiatives. With industry-leading same-store sales growth projected for McDonald's, new businesses in the fast-food industry should emphasize operational efficiency and implement effective pricing and marketing strategies to drive growth and maintain a competitive edge.
Furthermore, investors' sentiment towards various sectors can also influence a new business's prospects. For instance, Piper Sandler's downgrade of Discover and Carvana amidst concerns about valuation suggests that companies in these industries need to demonstrate strong fundamentals and continued growth potential to attract investment interest and successfully navigate the market.
In conclusion, while the major calls on Wall Street primarily focus on incumbent companies, new businesses can gain valuable insights from these recommendations. It is essential to stay informed about market trends, potential risks, and competitive dynamics to make informed decisions and maximize growth opportunities. By analyzing the factors driving these ratings and incorporating relevant strategies, new businesses can position themselves for success in their respective industries.
Article First Published at: https://www.cnbc.com/2023/07/21/fridays-biggest-wall-street-analyst-calls-like-carvana.html.svg)
