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Monday's Biggest Calls on Wall Street
Goldman Sachs Upgrades ChevronGoldman Sachs has upgraded Chevron from Neutral to Buy due to the oil and gas giant's leading capital returns, anticipated cash flow inflection in 2024, and volume increase in 2025. This upgrade is also based on Chevron's relative valuation, particularly in 2025.
Bernstein Reiterates Nvidia as OutperformBernstein is standing by its outperform rating on Nvidia, stating that the company and other AI infrastructure hardware vendors offer the most near-term upside potential. However, Bernstein also cautions that there is a risk of an overbuild in this sector.
Morgan Stanley Names Keurig Dr Pepper a Top PickMorgan Stanley has chosen Keurig Dr Pepper as its top pick in the beverage sector. The bank notes that Keurig Dr Pepper has experienced significant stock outperformance recently and expects continued growth for the company.
Jefferies Downgrades CarvanaJefferies has downgraded Carvana to underperform, citing concerns about the viability of the used car seller's business model. The bank states that there could be a rough road ahead for Carvana.
TD Cowen Upgrades GoodRXTD Cowen has upgraded GoodRX to outperform, highlighting the company's partnership with pharmacy benefit managers as a game changer. The bank believes that these partnerships will generate a new long-term revenue stream and integrate GoodRX into the health care ecosystem.
Piper Sandler Reiterates Apple as OverweightPiper Sandler has reiterated its overweight rating on Apple and raised its price target on the stock. The bank believes that Apple is well-positioned and that concerns about the company's performance in China are exaggerated.
Morgan Stanley Reiterates Walmart as OverweightMorgan Stanley continues to recommend Walmart as overweight, noting that the company's membership program Walmart+ is continuing to grow and gain new members.
JPMorgan Downgrades PenskeJPMorgan has downgraded Penske to underweight, stating that the transportation company's earnings are starting to normalize. Despite strong performance in the past, Penske faces challenges ahead.
Bank of America Upgrades HasbroBank of America has upgraded Hasbro from Neutral to Buy ahead of the company's second-quarter earnings call. The bank expects strong earnings due to high demand for The Lord of the Rings Magic set.
Deutsche Bank Upgrades New York Community BancDeutsche Bank has upgraded New York Community Banc to buy, citing the bank's strong execution and growth opportunities. The bank expects solid earnings growth for New York Community Banc.
Jefferies Downgrades FordJefferies has downgraded Ford to hold due to worsening electric vehicle losses and concerns about the company's strategy.
RBC Downgrades CSXRBC has downgraded CSX to sector perform mainly on valuation. Despite the company's strong performance, RBC believes that the stock is currently overvalued.
Oppenheimer Downgrades General ElectricOppenheimer has downgraded General Electric based on valuation. The bank notes that General Electric has delivered strong results, but the stock has reached its target multiples.
Bernstein Downgrades SouthwestBernstein has downgraded Southwest to market perform, stating that it has lost confidence in the company's earnings trajectory. The bank does not see a clear path to margin recovery in the near term.
Evercore ISI Reiterates Amazon as OutperformEvercore ISI is standing by its outperform rating on Amazon, stating that the stock has an attractive set-up based on its Triple Trough Thesis. The bank expects continued growth for the company.
Piper Sandler Upgrades SweetgreenPiper Sandler has upgraded Sweetgreen to overweight, expecting a meaningful improvement in sentiment for the fast-casual restaurant company in the coming months.
Piper Sandler Upgrades WayfairPiper Sandler has also upgraded Wayfair to overweight, noting that the company is on the cusp of driving sustained EBITDA profitability.
Credit Suisse Downgrades UPSCredit Suisse has downgraded UPS to neutral due to concerns about recent labor wage increases. The bank expects these wage increases to negatively impact UPS earnings in the future.
Morgan Stanley Downgrades SalesforceMorgan Stanley has downgraded Salesforce to equal weight, stating that positive catalysts for the stock are now in the rear-view mirror. The bank remains confident in Salesforce's long-term opportunity but believes that near-term growth may be limited.
Morgan Stanley Upgrades AdobeMorgan Stanley has upgraded Adobe to overweight, citing the company's potential for mid/high-teens EPS growth over the next three years. The bank sees generative AI driving creativity and expects the stock to outperform.
Barclays Reiterates TeslaBarclays continues to recommend Tesla as equal weight, emphasizing that the company should not be dismissed in the battle for electric vehicle trucks. Despite the dominance of the Detroit 3 in the pickup market, competition from Tesla and Rivian should not be underestimated.
Conclusion: Evaluating Wall Street Calls for New Businesses
The recent Wall Street calls, including upgrades, downgrades, and reiterations, provide valuable insights into the market sentiment and potential impact on various businesses. For new businesses entering or operating in these sectors, these calls can serve as a guide to navigate the competitive landscape. Here are a few key takeaways:
1. Industry-Specific Analysis:
- Understanding the specific factors attributed to each rating is crucial. For example, companies like Keurig Dr Pepper and Wayfair have received optimistic upgrades, signaling potential growth opportunities, while Ford and UPS face challenges due to concerns about their strategies or labor wage increases.
- Monitoring industry trends and dynamics is essential to evaluate the context and implications of these ratings. Opportunities in AI infrastructure hardware, sustainable fast-casual dining, and electric vehicle markets are highlighted in several calls.
2. Financial Performance and Valuations:
- Assessing factors like projected earnings growth, cash flow inflection, and relative valuations in the context of future potential can help new businesses prioritize growth areas and potential investment opportunities.
- However, it is important to conduct independent research and take a comprehensive view beyond single ratings, considering the outlook of the broader market and competitors.
3. Long-Term Growth Outlook:
- Evaluating factors driving long-term growth, such as generative AI, market dominance, or sustained profitability, can assist new businesses in aligning their strategies with market trends.
- Understanding the risks associated with overbuilding, margin recovery, or limited near-term growth can provide businesses with a realistic perspective for planning and mitigating potential challenges.