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Here are Friday’s biggest analyst calls: Amazon, Tesla, CVS, Microsoft, XPO, AT&T, Spotify & more
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Here are the biggest calls on Wall Street on Friday: Barclays names Dick’s a top pick Barclays named the sporting goods store a top pick and says it sees accelerating growth. “We view 2022 as the new solid foundation from which DKS can now reaccelerate • its growth algorithm through: 1) sustainable positive comp growth driving market share gains, 2) gross and operating margin expansion as it exits a period of supply chain disruption.” HBSC upgrades AT & T to buy from hold HSBC said in its upgrade of the stock after its earnings report that investors should buy the dip. “But a slowdown in market momentum has been widely flagged (by all operators) for months, and AT & T’ s absolute growth in mobile subs remained solid.” Read more about this call here . Bank of America reiterates Alphabet as buy Bank of America says it’s bullish heading into Alphabet earnings next week. “We think 1Q could show cost improvement upside, while in-line search results could be a modest positive for market share concerns (we think street will see better evidence of cost cutting and margin improvement by 2Q).” JPMorgan reiterates Amazon as a best idea JPMorgan says it’s bullish heading into the e-commerce giant’s earnings report next week. “We’re modeling continued e-comm share gains in 2023 as AMZN & other retailers gain share in key under-penetrated categories such as grocery, CPG, apparel & accessories, & furniture/appliances/equipment.” Morgan Stanley reiterates Blackstone as overweight Morgan Stanley says the alternative investment management company is “resilient.” “We believe BX is best positioned to navigate the backdrop, capitalize on dislocation with $190b dry powder & propel earnings power.” Argus upgrades Dollar General to buy from hold Argus said in its upgrade of the dollar store company that it’s “rare retailer.” “We are raising our rating on Dollar General Corp . to BUY from HOLD and setting a one-year price target of $250. DG is a rare retailer that is growing square footage and posting positive comparable sales. Our five-year growth rate is 11%.” UBS initiates Bill.com as buy UBS said in its initiation of the software billing company that shares are attractive at current levels. “Since we’re a bit more constructive than the Street and negativity already seems embedded in BILL shares (amongst worst performing software stocks YTD), we view risk/reward as biased upward at these levels.” Piper Sandler downgrades Big Lots to underweight from neutral Piper said in its downgrade of Big Lots that it sees demand slowing. “Big ticket discretionary demand appears to be deteriorating (despite easier y/y compares), and we are worried about companies with break-even EBITDA (or worse).” Morgan Stanley downgrades Seagate to equal weight from overweight Morgan Stanley said in its downgrade of Seagate that it sees a recovery pushout for the hard disc data drive company. “As a result, we believe path to outperformance has also been pushed out, with risk more elevated near term.” Wells Fargo names Starbucks a top pick into earnings Wells says Starbucks is a “best idea” heading into earnings on May 2 and the “China inflection adds upside.” “Shares are -2% post-Q1 & we see improving Q2 risk/reward behind ongoing domestic strength (positive Q2 traffic; Ex 29), a likely China inflection (vs. a very low Q2 bar) & anticipated upside to the FY23 outlook.” Cantor Fitzgerald initiates CVS as buy Cantor said in its initiation of the stock that it’s underappreciated. “We are initiating coverage of CVS Health with an Overweight rating and 12-month price target of $87; Investors are underestimating the power of the flywheel CVS is piecing together, in our opinion.” Cantor Fitzgerald initiates UnitedHealth as buy Cantor said in its initiation of the healthcare company that it sees near-term earnings upside. ” United is ahead of the market in using commercial product innovation to solve for the problem of employers wanting to hold price trends, while providers are looking for a three-year step-up from historical averages.” Benchmark initiates Sea Limited as buy Benchmark initiated the Singapore-based internet tech company with a buy and says it sees rapid growth ahead. “We believe that SE should remain a key beneficiary of Southeast Asia’s fast growing digital economy in years to come.” Benchmark initiates Grab Holdings as buy Benchmark said in its initiation of the Asian internet company that it’s a “significant market consolidator” “As part of our industry launch of Southeast Asia Ecommerce, we are initiating coverage of GRAB, a leading platform player offering mobility, delivery, fintech and enterprise services in SEA (Southeast Asia Ecommerce).” JPMorgan upgrades XPO to overweight from neutral JPMorgan said in its upgrade of the logistics company that it likes the company’s recent management changes. “Our estimates remain unchanged but we are upgrading to Overweight with a higher, yet still discounted, multiple compared to peers as we believe this strategic hire should help unlock the potential at XPO which is still not completely reflected in the stock.” Read more about this call here. Goldman Sachs reiterates Philip Morris as buy Goldman says the tobacco company is an “earnings compounder with attractive valuation.” “Ultimately, we believe mgmt’s Q2 guide is conservative and therefore we see a nice set up for a potential beat and raise quarter. This, in addition to PM’s Investor Day in September, should be positive catalysts for the stock.” Read more about this call here. Morgan Stanley reiterates Spotify as overweight Morgan Stanley raised its price target on the stock to $160 per share from $130 and says “price increases, margin expansion, and market share” will drive the stock. “We continue to see streaming music & audio as an attractive growth market and remain OW WMG and SPOT.” Wells Fargo reiterates Microsoft as overweight Wells says expectations are “mixed” heading into earnings next week, but that the firm is standing by the stock. “While optimizations and macro are likely to impact FQ3 results, we see favorable offsets forming beyond, inc. MSFT’s ability to both consolidate spend from incumbent categories (productivity, biz apps, security) & gain share in newer ones.” Truist downgrades Tesla to hold from buy Truist said in its downgrade of the stock that it was surprised by the company’s “willingness to accept lower margins.” “What surprised us is TSLA’s stated willingness to reduce price further, accepting still lower automotive margins, to broaden & deepen its ability to generate revenue from AI projects, most notably FSD.” Goldman Sachs reiterates ServiceNow as buy Goldman says it’s bullish heading into the work flow solutions company’s earnings report next week. “We expect investors to put more weight on NOW’ s 1Q results, despite it being a seasonally weak quarter, as they look for signs of continued durability.” Truist initiates CyberArk as buy Truist initiated the cyber security company with a buy and says it has a first mover advantage. ” CYBR is a leader in Privilege Access Management, which is becoming a critical layer of cybersecurity and center of identity security. The company’s transition to a subscription-based model has resulted in strong visibility and durability of its business as well as higher customer lifetime value.” Baird reiterates McDonald’s as outperform Baird says it’s bullish heading into earnings next week. “We see potential for Q1 comps/EPS to exceed estimates (perhaps already priced in?), and we continue to believe MCD can fuel solid operating momentum in the balance of 2023 despite possible economic headwinds.” Stephens upgrades Pool Corp. to overweight from equal weight Stephens said in its upgrade of Pool that it sees an “attractive entry point” for the pool company. “The stock could tread water in the ultra-near-term as seasonally it is still too early to fully gauge activity levels, which could keep investors waiting. However, we think 20x next year’s earnings for a best-in-class, high quality compounder that consistently puts up 25%-30% ROIC, consistent market out-performance and strong FCF is an attractive entry point.” Stephens initiates SentinelOne as overweight Stephens initiated the cyber security company with an overweight and says it has “best-in-class growth.” ” SentinelOne’s platform addresses many of the highest priority areas of security spending.” JPMorgan reiterates Charles Schwab as overweight JPMorgan says Charles Schwab could be worth more if it were to “de-bank.” “While earnings would fall materially were Schwab to de-bank, we believe Schwab would trade at a higher (possibly meaningfully higher) multiple, which would/ could justify a higher value than the stock is trading at today. … .Schwab could feasibly de-bank. Schwab is not a bank, but rather is a broker that operates a bank, and as such we see it feasible that Schwab could operate without a bank.”
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