Here are Monday’s biggest calls on Wall Street: Barclays reiterates Tesla as underweight Barclays said in a note previewing Tesla earnings that it expects a “modest” beat on Wednesday and a bitcoin impairment charge. “We expect a modest 2Q EPS beat vs consensus but see greater focus on FCF given CEO Elon Musk’s comments last month that Berlin and Austin are ‘gigantic money furnaces right now.'” Read more about this call here. Bernstein reiterates Apple as market perform Bernstein said in a note previewing Apple earnings later this month that the risk / reward over the next six months to 2 years is “neutral to modestly negative.” “We see some opportunity for Apple to continue to outperform through its iPhone launch in September, per its historical pattern, but we believe risk / reward over the next 6 months – 2 years is neutral to modestly negative.” Citi adds a positive catalyst watch on Delta Citi added a positive catalyst watch to the airline stock and said it sees “upside risk” to the stock. “Over the next three months, Delta’s shares could see significant upside risk, as the market may under-appreciate 2Q’s flight schedule course correction, which should translate into more normalized 3Q flight operations.” Piper Sandler downgrades Lemonade to neutral from overweight Piper said in its downgrade of Lemonade that it sees pressured profitability for the insurance company. “The company’s substantial investments behind customer acquisition, technology (40%), and G & A (57%), have pressured profitability.” Wells Fargo downgrades International Paper to equal weight from overweight Wells downgraded the paper company due to “slowing demand.” Downgrading IP from OW to EW given slowing demand and incremental non-integrated supply coming online. Morgan Stanley downgrades Paramount to underweight from equal weight and Fox to equal weight from overweight Morgan Stanley downgraded several media stocks Monday, noting it has concerns about a streaming recession. “The pivot to streaming has not reduced the risk to Media estimates from a slowing economy. Advertisers and consumers likely to pull back in a recession. At the same time, some of these stocks have outperformed the market YTD thanks to already low multiples. Downgrade PARA to UW, FOXA to EW. Read more about this call here. Baird names Darling Ingredients a fresh pick Baird said the animal food manufacturing company has a strong core business. “We are designating DAR as a Fresh Pick into the quarter which will likely be reported in early August. We think a variety of reasons have led to the pullback in DAR shares, but recommend owning into the results largely due to the strength in the core business. ” DA Davidson upgrades WD-40 to buy from neutral DA Davidson said in its upgrade of the oil lubricant company that it’s gaining “confidence in the growth strategy.” “We are upgrading WDFC to BUY from Neutral after spending two days with management. Their strategy should accelerate core long-term sales growth to mid- to high-single digits from 5.8% in the last 10 years.” Guggenheim reiterates Netflix as buy Guggenheim kept its buy rating on Netflix heading into earnings on Tuesday and said it expects the quarterly results to be “impactful.” “We expect the company’s update to also have implications for streaming media peer and digital advertising company valuations.” Mizuho initiates Kraft Heinz as outperform Mizuho said the food company has a “portfolio with potential.” “Bears view KHC’s portfolio as structurally off-trend, but data indicates categories comprising ~ 50% of KHC’s US revenue over-index to the highest earning 20% of households and those 35 years and under.” Read more about this call here. BTIG downgrades Hologic to neutral from buy BTIG downgraded the medtech company due to slowing Covid testing and supply chain concerns. “We are downgrading HOLX to Neutral (from Buy) and removing our $ 79 PT. What’s changed? HOLX’s supply challenges within the Breast Health business are likely to get worse (3Q and 4Q) before they get better (2023) coupled with growing Capex concerns into a recessionary environment. ” JPMorgan upgrades Grab Holdings to overweight from neutral JPMorgan upgraded the Asia transportation and food delivery company and said the stock is undervalued. “We find sentiment on Grab is extremely cautious. With the scope for earnings surprise and relatively low valuations, we upgrade GRAB to OW with PT of $ 3.0.” Deutsche Bank adds a catalyst call buy on Tesla Deutsche added a catalyst call buy idea on shares of Tesla, noting it’s bullish heading into earnings Wednesday. “We are adding Tesla to our short-term Catalyst Call Buy List ahead of the company’s 2Q22 earnings day on July 20th, when the company could report potential upside to low Street expectations for 2Q margins, driven by good cost execution and continued pricing strength, and where we expect management to reiterate its full year deliveries growth of 50%, suggesting total volume of approximately 1.4m units and implying considerable volume ramp in the second half. ” Goldman Sachs initiates Chesapeake Energy as buy Goldman said in its initiation of the energy company that Chesapeake has a “strong” balance sheet. “This, along with a strong balance sheet after emerging from bankruptcy, can allow the company to deploy the bulk of its FCF towards a capital returns program – a combination of fixed / variable dividends and share repurchases.” Goldman Sachs upgrades Yum Brands to buy from sell Goldman said in its double upgrade of the owner of Taco Bell and Kentucky Fried Chicken that the stock’s valuation is attractive. “Upgrade YUM to Buy based on the company’s strong unit growth opportunity and high franchise mix (98% of units), improved digital integration, trade-down benefits at Taco Bell (23% of system sales), lower-risk China re-opening opp’y, and attractive valuation on relative basis vs MCD and FCF vs peers. ” Read more about this call here. Deutsche Bank downgrades General Motors to hold from buy Deutsche downgraded the automaker due to pricing pressures. “As such, we downgrade GM to Hold amid eventual pricing pressure and the absence of near-term auto 2.0 catalysts and maintain our Hold rating on Ford.” Read more about this call here.
