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Wall Street Calls: Piper Downgrades Estee Lauder, Baird Upgrades Netflix, and More
Piper Downgrades Estee Lauder and American Express
Piper recently downgraded Estee Lauder and American Express due to limited upside and growth headwinds. For Estee Lauder, Piper sees near and intermediate-term downside risks that offset the anticipated recovery tailwinds from China. Meanwhile, the downgrade of American Express is based on concerns about meeting revenue and EPS growth targets, as network volume experiences a significant slowdown.
Baird Upgrades Netflix and Initiates Amylyx Pharmaceuticals
On the other hand, Baird upgraded Netflix to outperform due to its underlying momentum and unique qualities. The stock's high valuation was also considered in the upgrade. Additionally, Goldman Sachs initiated Amylyx Pharmaceuticals as a buy, recognizing an attractive entry point for the biotech company. Amylyx Pharmaceuticals focuses on developing drugs for neurodegenerative disorders, such as amyotrophic lateral sclerosis (ALS).
Bank of America Initiates Vivid Seats and Upgrades Nutrien
Bank of America initiated Vivid Seats as a buy, projecting steady growth for the seat ticketing company. The initiation was based on Vivid Seats' strategy of driving recurring transaction growth through investments in brand marketing and a loyalty program. On the other hand, Wells Fargo upgraded Nutrien to overweight, considering it a best-in-class ag company with double-digit organic growth potential when the cycle turns.
Evercore ISI Reiterates Meta and RBC Downgrades Twilio
Ahead of Meta's earnings, Evercore ISI reiterates an outperform rating, being bullish on the company's expectations. Conversely, RBC downgraded Twilio to underperform, citing an unfavorable risk/reward for the programmable communication tools company for texts and phone calls.
Stifel Upgrades Lam Research and Goldman Sachs Reiterates Nvidia
Stifel upgraded Lam Research, emphasizing the strong revenue trajectory ahead for the semiconductor company. Goldman Sachs, on the other hand, reiterates its buy rating on Nvidia, highlighting the stock's potential for positive EPS revisions and the overall positive outlook for the sector.
UBS Downgrades Tesla and MoffettNathanson Upgrades Shopify
In its downgrade of Tesla, UBS believes that strong growth is already priced in. Conversely, MoffettNathanson upgraded Shopify, expecting an inflection point and increased traction with enterprise customers.
Rosenblatt Downgrades ON Semiconductor and Deutsche Bank Reiterates Apple
Rosenblatt downgraded ON Semiconductor based on valuation, as the stock has had a significant run in recent times. Meanwhile, Deutsche Bank reiterated its buy rating on Apple, raising its price target and expecting upside heading into earnings.
Raymond James Upgrades Becton Dickinson and D.R. Horton
Raymond James upgraded Becton Dickinson, as it sees improved visibility for the med tech company. Additionally, the firm upgraded D.R. Horton, noting the impressive rebound in homebuilding margins and the growing revenue contribution from its rental housing portfolio.
BTIG Upgrades AppLovin and Needham Reiterates Compass
BTIG upgraded AppLovin, citing an improving fundamental outlook and undemanding valuation. Meanwhile, Needham added Compass to its conviction list, viewing the real estate brokerage as a key beneficiary of AI trends.
Goldman Sachs Reiterates ServiceNow and Evercore ISI Reiterates Disney
Goldman Sachs reiterates its buy rating on ServiceNow, expecting more upside as the stock remains a key beneficiary. Evercore ISI also reiterates Disney as outperform, despite lowering its price target, as it expects the company to slightly underperform consensus estimates in its upcoming earnings report.
Conclusion: Insights for New Businesses
This recent wave of Wall Street calls provides valuable insights for new businesses seeking to navigate the stock market landscape. While these assessments primarily focus on existing companies, the shifting opinions and evaluations can shed light on broader trends and industry outlooks. Here is a "hot take" on how these calls may impact a new business:
1. Recognize the importance of growth potential: The upgrades given to companies like Netflix, Amylyx Pharmaceuticals, and Vivid Seats highlight the market's appetite for businesses with strong growth potential. New companies should emphasize unique qualities and momentum to attract investor interest.
2. Gauge market sentiment and competition: Downgrades for Estee Lauder and American Express reflect concerns about limited upside and growth headwinds. It's important for new businesses to monitor market sentiment and competition dynamics to avoid being caught in unfavorable risk/reward situations.
3. Consider industry-specific trends: Upgrades in sectors such as semiconductor (Lam Research) and agriculture (Nutrien) indicate positive market outlooks for these industries. New businesses should consider aligning themselves with sectors poised for growth and capitalize on emerging trends.
4. Valuation matters: The downgrades on Tesla and ON Semiconductor due to valuation concerns emphasize the importance of price alignment with expected growth. Startups should be mindful of their valuations, ensuring they are grounded in realistic growth forecasts.
5. Stay agile and adaptable: The ever-changing nature of Wall Street calls means that businesses must remain agile and adaptable. Monitoring market evaluations can provide valuable insights into investor sentiment and help guide strategic decision-making.
In conclusion, the recent Wall Street calls offer valuable lessons for new businesses entering the market. By considering growth potential, market sentiment, industry trends, valuation, and adaptability, startups can position themselves for success in the dynamic landscape of the stock market.
Article First Published at: https://www.cnbc.com/2023/07/24/mondays-biggest-analyst-calls-include-apple-tesla.html