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Wall Street's Biggest Wednesday Calls: A Deeper Look at Walmart, Home Depot, Lowe's, and More
Bank of America's Continued Confidence in Walmart
Bank of America continues to back Walmart, raising its price target from $175 to $190 per share. The bank sees potential for the retail giant to surpass estimates in the upcoming earnings report. This optimism is rooted in the belief that Walmart will continue to grow its market share, particularly in the grocery and necessities sector, which has seen a 25% inflation rate, outpacing most other categories.
UBS's Stance on Home Depot and Lowe's
UBS has reiterated its buy rating for Home Depot and Lowe's, anticipating their upcoming earnings reports to have a "low impact" on their stock prices. The firm believes that the earnings reports will not provide enough evidence to significantly alter the perspectives of either bullish or bearish investors.
JPMorgan Upgrades DraftKings
JPMorgan has upgraded DraftKings from underweight to neutral, primarily based on its valuation. This decision follows the announcement of a partnership between Disney and Penn. The firm believes that the current after-market levels present an opportunity to adjust their rating.
Barclays Upgrades Dish
Barclays has upgraded Dish from underweight to equal weight following the announcement of a merger with Echostar. The firm believes that this merger, along with the potential exercise of a spectrum purchase option with TMUS, will provide Dish with additional time to manage its capital needs.
BTIG Downgrades WeWork
BTIG has downgraded WeWork from buy to neutral, expressing a lack of confidence in the company's ability to achieve profitability. The firm acknowledges the future of flexible workspaces but questions WeWork's viability in its current state.
JPMorgan Reiterates Peloton as Overweight
JPMorgan continues to see an "attractive risk/reward" for Peloton. The firm remains optimistic about Peloton's long-term positioning in the connected fitness space, citing the brand's relaunch, rental program, refurbished bikes, and new digital app strategy as factors that could drive demand and revenue growth.
Berenberg Upgrades Marqeta
Berenberg has upgraded payment solutions company Marqeta from hold to buy. The firm believes that Marqeta's announcement of a four-year extension of its contract with Block to power its Cash App card product removes a significant overhang on the stock.
Bank of America Reiterates Rivian as Buy
Bank of America continues to back Rivian, reiterating its buy rating. The bank believes that the electric vehicle maker is well-positioned in the market and poses a competitive threat to incumbent original equipment manufacturers.
UBS Downgrades UPS
UBS has downgraded UPS from buy to neutral following its Tuesday earnings report. The firm cites concerns about cost pressures, particularly in relation to the Teamster contract, which it believes will likely continue to pressure UPS's Domestic Package margin through 2Q24.
Jefferies Upgrades Eli Lilly
Jefferies has upgraded Eli Lilly from hold to buy, citing the potential of GLP-1 as one of the "biggest drug classes of all time." The firm is bullish on Eli Lilly for several reasons, including its attractive growth profile in a recessionary environment and the potential of GLP-1.
Wells Fargo Upgrades Chart Industries
Wells Fargo has upgraded Chart Industries from equal weight to overweight, citing the company's strong positioning in the energy transition. The firm has also raised its price target from $162 to $224, based on a valuation of 12x its upwardly revised 2024 EBITDA estimate.
Bank of America Reiterates Nvidia as Buy
Bank of America continues to stand by Nvidia, maintaining its buy rating. The firm praises Nvidia's AI software and hardware leadership and has set a $550 price objective following a keynote speech from CEO Jensen Huang at SIGGRAPH 2023.
Goldman Sachs Downgrades International Flavors
Goldman Sachs has downgraded International Flavors from buy to neutral following disappointing earnings. The firm sees the path to achieving medium-term EBITDA targets as increasingly difficult following a significant cut to 2023E EBITDA guidance.
Stifel Downgrades Datadog
Stifel has downgraded software company Datadog from buy to hold following a significant decline in shares. The firm cites concerns about the company's top-line growth and a decline in usage growth, leading to speculation about potential company-specific issues within the installed base.
Implications for New Businesses: A Fresh Perspective
The recent analyst calls on Wall Street provide valuable insights for new businesses. The confidence in Walmart and the home improvement retailers underscores the importance of a strong business model and a robust value proposition. New businesses must ensure they have a compelling offering that can attract and retain customers, even in a challenging market environment.
The upgrade of DraftKings and Dish highlights the potential of strategic partnerships and mergers. New businesses should explore collaborations that can enhance their value proposition and drive growth.
The downgrade of WeWork and UPS underscores the importance of financial management and operational efficiency. New businesses must focus on profitability and cost management to ensure long-term success.
The continued confidence in Peloton, Marqeta, Rivian, and Nvidia underscores the potential of innovative solutions and strong market positioning. New businesses should focus on innovation and differentiation to gain a competitive edge.
In conclusion, while the analyst calls present challenges, they also offer valuable lessons for new businesses. By learning from these companies' experiences, new businesses can navigate their growth journey more effectively.
Article First Published at: https://www.cnbc.com/2023/08/09/wednesday-wall-street-analyst-calls-including-nvidia.html
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