Here are Wednesday’s biggest calls on Wall Street: CFRA downgrades Roku to sell from hold CFRA said it sees “challenging fundamentals” for Roku. “While the secular shift to streaming from linear broadcast and pay TV networks continues, ROKU has many large competitors. The value creation of its Roku Channel and smart TVs is subject to debate whether ROKU can scale these offerings to profitable growth.” Piper Sandler reiterates Target as overweight Piper said Target is a key beneficiary of Bed Bath & Beyond struggles. “We believe that struggles at BBBY (non-covered) will drive a significant near-term share opportunity at Target similar (if not greater) than the Toys “R” Us/Babies “R” Us share gains of 2018/2019.” Evercore ISI adds Cisco Systems to its tactical outperform list Evercore said Cisco is well-positioned heading into earnings next week. “We think CSCO is positioned to report and guide at least inline to street expectations, with some upside potential as the company sees supply chains normalize and market share ramps back for them.” Evercore ISI reiterates Apple as outperform Evercore said it’s standing by shares of Apple. “Continued growth in purchase commitments is encouraging at a time where there are some concerns around the growth outlook. Gross margins should snap back quickly when FX becomes more favorable. Sticking with our OP rating and $190 target.” Oppenheimer reiterates Lululemon as outperform Oppenheimer said it’s standing by shares of Lululemon. “We reviewed carefully recent trends at LULU and revisited our stance on shares. In our view, underlying, structural expansion prospects for LULU remain solidly intact, and any cyclically-driven margin and/or sales pressures, at the company, are likely to prove short-lived.” Barclays initiates Walmart as buy Barclays called Walmart a “defensive” stock. “Defense with offense: Defensive characteristics (based on customer/category exposure, inflation support) plus incremental growth drivers: WMT tops the list.” Morgan Stanley upgrades American Express to overweight from equal weight Morgan Stanley said it sees sustainable revenue growth for the payments card issuer. “We are upgrading Amex to Overweight from Equal-weight as we tilt our stock picks toward 1) higher credit quality, 2) sustainable revenue growth, and 3) positive operating leverage. AXP has a lower risk credit skew with higher FICO card members. ” Read more about this call here. Bank of America upgrades Royal Caribbean to neutral from underperform Bank of America said its survey checks show Royal Caribbean bookings are gaining steam. “In our survey, RCL’s pricing is more robust than that of CCL/NCLH (Carnival/Norwegian), and given RCL has largely addressed its balance sheet risk that drove our Underperform rating during 2022, we upgrade RCL to Neutral and increase our PO to $78 from $40.” Bank of America upgrades TripAdvisor to buy from underperform Bank of America said it sees robust growth for the travel booking company. “We are upgrading TripAdvisor to Buy rating from Underperform on accelerating growth in Viator (experiences bookings), with strong US demand and European recovery.” Read more about this call here. Credit Suisse initiates United Rentals as outperform Credit Suisse said it sees organic and inorganic growth for the equipment rental company. “URI has shifted its business model from just a rental equipment company to a total solutions provider, leveraging technology and digital solutions to better serve its customers and optimize efficiencies across the organization.” KeyBanc downgrades Sherwin-Williams to sector weight from overweight KeyBanc said demand is slipping for Sherwin-Williams. “We lower our FY23E EPS to $8.30 (was $9.32) as falling demand crimps operating leverage despite falling input costs, and initiate a FY24E EPS of $9.26 on 3% growth, up margins.” Bank of America reiterates Chipotle as buy Bank of America said it sees more earnings per share upside after the company’s earnings report on Tuesday. “While CMG’s strong January comp echoes broader industry trends (unseasonably warm weather supporting demand), we believe improvements the company is making in product availability (fewer menu deactivations), staffing (90% fully staffed) and service are also contributing.” Daiwa reiterates Disney as buy Daiwa said it’s standing by its buy rating heading into Disney earnings Wednesday after the bell. “Strong travel and peer data points suggest upside to parks results. Parks and improving streaming unit make for earnings growth. We taper our ests but remain above Street.” Wells Fargo reiterates Goldman Sachs as overweight Wells raised its price target on the stock to $420 per share from $390. “Our view is that investors are giving GS among the least credit for expected returns relative to peers.” Read more about this call here. Bank of America reiterates Domino’s as buy Bank of America said it’s bullish on Domino’s launch of loaded tater tots. “We reiterate our Buy rating and $448 PO on DPZ shares. Given our expectation of a return to prior growth rates, we believe DPZ’s historical range is relevant.” JPMorgan downgrades Hain Celestial to neutral from overweight JPMorgan downgraded the stock mainly on valuation. “We are downgrading the HAIN shares to Neutral from Overweight. … First, the stock has been relatively strong lately, rising 38% since its 12/20/22 nadir.” Bank of America reiterates Microsoft as buy Bank of America said it’s bullish long-term on Microsoft’s venture into AI. “However, we believe that Microsoft is staying ahead of the curve for AI-enabled enterprise use cases, which are likely to generate more meaningful incremental revenue growth for the company over time.” Loop reiterates Alphabet as buy Loop said it’s standing by its buy rating on shares of Alphabet. “We are raising our EPS outlook on lower revenue and greater spending discipline. We now project a 1% revenue decline in 1Q, flat in 2Q and 7% revenue growth in 2H23 against easing comps.” Morgan Stanley reiterates Tesla as overweight Morgan Stanley said it’s staying bullish heading into Tesla’s investor day on March 1. “We note a sharp decline in incoming call volume from clients on Tesla over the past week as the stock has tested the $200 mark (MS Price target $220).”
