Here are Thursday’s biggest calls Wall Street: Credit Suisse upgrades AECOM to outperform from neutral Credit Suisse said the company is a key beneficiary of infrastructure stimulus. “We are upgrading ACM to Outperform from Neutral. As a pure play in professional infrastructure services, we believe ACM stands to benefit from secular tailwinds tied to infrastructure stimulus in the US and globally.” UBS reiterates Apple as buy UBS said it’s sticking with its buy rating on the stock but is concerned about App Store revenue declines. “As customary in January, Apple provided a year-end in review (link) of many of the company’s entertainment and Service offerings. While many of the updates cannot be extrapolated to financial metrics, we believe Apple’s App Store disclosure provides a read into the health of that important offering that we estimate comprises almost 25% of Services.” JPMorgan adds Caterpillar to the focus list JPMorgan added the stock to its top picks list and says it’s underappreciated. “We are adding OW-rated CAT to the AFL as a near-term idea as we believe its exposure to favorable end markets (~2/3rd of revenues tied to non-resi/O & G/mining) and margin upside potential is underappreciated by investors.” Credit Suisse upgrades Boeing to neutral from underperform Credit Suisse said in its upgrade of Boeing that it sees “stronger aircraft deliveries.” “We are upgrading BA to Neutral (from Underperform) as several key parts of our original thesis are no longer defensible in light of the company’s improved operational performance.” Citi names Microsoft as a top 2023 pick Citi said Microsoft is well positioned for 2023. “While challenges will prevail for growth-at-all-costs names, we believe companies that show good sales efficiency with large market opportunities that don’t require evangelical sales motions are among the best positioned.” RBC names Meta a top 2023 pick RBC said it sees “multiple expansion” on the horizon for Meta shares. ” META : Getting its targeting/measurement mojo back + abating Tiktok concerns = multiple expansion alongside bottom-line support.” RBC upgrades Wix.com to outperform from sector perform RBC said the web development company has pricing power “With WIX down 51% in ’22, we throw our hat back in the ring, upgrading to Outperform with a $100 PT on slightly raised estimates, more appropriately reflecting price increases.” Barclays reiterates Coinbase as equal weight Barclays said the outlook for Coinbase looks too challenging “absent of a turnaround in crypto asset prices.” “Exchange volumes, app download/usage data, and crypto asset prices continued to soften in the quarter, but rising rates are set to be a material tailwind; we are revising down our revenue estimates, but this is offset by ~$1B of lower opex in F23.” UBS downgrades Anheuser-Busch InBev to sell from neutral UBS said in its downgrade of the beverage giant that it sees a lack of positive catalysts. “While, we have been encouraged by signs of improving execution in AB InBev’s key profit pools, the market may not fully appreciate risks for 2023 (i) In contrast to other names within Beverages, reopening in China may not fully offset weakness in the US .” Read more about this call here. Morgan Stanley upgrades Cleveland-Cliffs to overweight from equal weight Morgan Stanley said in its upgrade of the mining company that it sees “robust” free cash flow. “Upgrading CLF to OW on the back of sequentially higher annual fixed pricing contracts, which should lead to positive earnings revisions and robust FCF generation despite forecast declining spot steel prices. Read more about this call here. Deutsche Bank upgrades American Tower to buy from hold Deutsche said in its upgrade of the cellular tower company that it has a diverse portfolio. “AMT’s well diversified global portfolio (roughly 50/50 US vs. International) positions it best as a top beneficiary of global mobile data traffic growth over the next several years, especially as US 5G wireless capex begins to moderate.” Jefferies upgrades Netflix to buy from hold Jefferies said in its upgrade of the stock that it sees the company’s ad tier subscription service driving “top line outperformance” in time. ” Netflix: Raise to Buy. AVOD (ad video on demand) will be slow to kick in, but when it does (paired with password sharing changes), it should drive top line outperformance.” Read more about this call here. Jefferies downgrades Roku to underperform from hold Jefferies said in its downgrade of Roku that a slowing digital ad market is not priced into the stock. “Downgrading ROKU to underperform as we do not believe that a significantly slower digital ad market is reflected in near term consensus expectations and the long term trajectory of the business remains unclear.” Evercore ISI reiterates Lululemon as outperform Evercore said Lululemon’s preannouncement pullback is a buying opportunity. “We think the post-preannounce pullback is a great buying opportunity.” Rosenblatt reiterates Disney as buy Rosenblatt said activist investor Nelson Peltz’s push for a Disney board seat could help shares. “We reviewed news post-close that Nelson Peltz’s Trian has launched a proxy contest for a Disney board seat, and came to a surprising conclusion. Peltz’s push — despite the Disney board’s objections — has merit, and could help Disney shares.” Bank of America reiterates Amazon as buy Bank of America said it sees “multiple expansion” for Amazon shares in 2023. “While 1Q’23 could be pressured by consumer and corporate spending cuts, BofA economists expect inflation to fall below 3% exiting 2023, and we think a more favorable consumer spending environment, & prospect of lower interest rates can lead to multiple expansion in 2023.” Wolfe upgrades Halliburton to outperform from peer perform Wolfe said in its upgrade of the oil field services company that it likes the stock’s valuation. “We are upgrading HAL to Outperform on favorable relative valuation and ongoing revenue tailwinds in 2023.” JPMorgan upgrades Cinemark to outperform from neutral JPMorgan said in its upgrade of Cinemark that it sees a “favorable” risk/reward for the movie theater company. “Following a 31% decline in shares since the beginning of December (vs. SPX -3%) , we believe the risk/reward is more favorable to take a positive view on the stock.” Read more about this call here. JPMorgan reiterates Exxon as overweight JPMorgan said the oil and gas giant has a nice mix of offense and defense. “We think XOM has multiple rerating potential from its diversified portfolio, improved execution, portfolio management, and return of capital. XOM’s portfolio continues to have a good mix of defense (balanced portfolio across Upstream, Downstream and Chemicals) and offense (torque to a demand recovery).” Barclays names Burlington a top 2023 pick Barclays said the off-price retailer’s stock is compelling. “We believe BURL should accelerate share gains, particularly in 2H23 and beyond.” Bernstein reiterates Tesla as underperform Bernstein said it sees too many demand challenges for the automaker. “We are more torn on TSLA’s stock, given its recent pullback. … That said, we believe that many investors underestimate the magnitude of the demand challenges Tesla is facing, and that 2023/24 numbers could materially reset.” Bank of America reinstates Bank of New York Mellon as buy Bank of America resumed coverage of Bank of New York Mellon and said it’s “cyclical” with several “self-help levers.” “While we think revenue growth outlook will be driven by how markets behave, we believe that mgmt. focus on right sizing the cost base and capital leverage provide EPS defensibility.” New Street downgrades AT & T to neutral from buy New Street downgraded the stock mainly on valuation. “We have downgraded AT & T to Neutral after strong performance in 2022. ” Morgan Stanley names Palo Alto a top 2023 pick Morgan Stanley said it has “strong confidence” in the cyber security company as a top pick for 2023. “As such, we double down on our preference for consolidators that can capture more of the security budget in times of greater scrutiny, with strong confidence in PANW as our Top Pick.”
