Here are Wall Street’s biggest calls on Friday: Wedbush reiterates Carvana as underperform Wedbush said in a note that bankruptcy is a possibility for Carvana. “Near-term bankruptcy is not out of the question, but is less likely than other near-term outcomes given the liquidity timeline and the Garcias’ (largest shareholder Ernie Garcia II and CEO Ernie Garcia III) 47% equity ownership position and 90% equity voting rights position.” Evercore ISI names Apple as a top pick in 2023 Evercore said it sees 2023 as a “moonshot” year for Apple. “We see AAPL ramping up various moonshot projects that start to become material – be that AR/VR deployments (H1:23?), advertising business becomes more material and AAPL Pay starts to gain further scale.” Evercore ISI names BlackRock as a top pick Evercore says BlackRock will be a key beneficiary of a deteriorating macro in 2023. “Our base case is for a tough & choppy equity backdrop given inflation, Fed rate moves, QT & a potential recession; as well as allocations & flows into fixed income strategies, the continuation of the ongoing active-to-passive trend & alts continuing to grow.” Goldman Sachs upgrades Delta to buy from neutral Goldman resumed coverage of Delta and upgraded the stock adding that it sees “recovery tailwinds” remaining heading into 2023. “In this environment, we favor stocks with idiosyncratic earnings drivers, relatively more recovery tailwinds remaining, or characteristics that reduce downside risk. Read more about this call here. Needham reiterates Disney as hold Needham lowered its estimates on shares of Disney and said it sees rising direct-to-consumer losses. “In DTC, we lower our 1Q23 estimates as we expect price increases and ad tier introduction to impact results later in FY23, and we lower our rev estimate by 3% to $5.4B (up 16% y/y), and maintain our operating incoming Loss estimate of $1.2B.” DA Davidson initiates Cyberark as buy DA Davidson said Cyberark is a “clear market leader.” “Security spend remains highly defensible, demand remains robust, & security vendors continue to fair better than most other SaaS players.” JPMorgan upgrades Meta to overweight from neutral JPMorgan said it sees “increased cost discipline” for the social media giant. “However, heading into 2023, we believe some of these top and bottom line pressures will ease, and most importantly, Meta is showing encouraging signs of increasing cost discipline, we believe with more to come.” Read more about this call here. JPMorgan reiterates Amazon as overweight JPMorgan lowered its price target on the stock to $130 per share from $145, but said it’s standing by Amazon shares. “We recognize the elevated cloud concerns and macro uncertainty over the next few months, but we believe there is still significant secular shift toward e-commerce & cloud ahead, and AMZN should also benefit from easing retail comps into 2023.” Read more about this call here. Wells Fargo downgrades Prudential to underweight from equal weight Wells downgraded the insurance company mainly on valuation. “Our call is primarily one of relative value, as PRU’s valuation has expanded relative to MET vs. historical levels.” MKM names Walmart a top 2023 pick MKM said it sees further share gains for Walmart in 2023. ” Walmart is gaining share against grocery peers, but discretionary categories have been soft. Strong price gaps, an increased focus on price, and an increasingly value-seeking consumer should lead to continued market share gains for Walmart.” JPMorgan names Eli Lilly a top 2023 pick JPMorgan said Eli Lilly is “best-in-class.” “BioPharma fundamentals remain healthy, but our focus is shifting to individual names following the 2022 rally.” Canaccord names Yeti and Traeger top 2023 picks Canaccord says Yeti should hold up well in a recessionary environment. The company is a maker of mainly outdoor products. The firm also says it likes Traeger in 2023 and that the grill company should return to growth in 2023. ” YETI Holdings (YETI : BUY, $58 PT): We believe the core YETI consumer should hold up relatively better in a recession as it skews a bit higher end. Traeger (COOK : BUY, $6 PT): 2023 won’t look great as the industry works through channel inventories in H1, but this should be well understood, and we expect material growth to resume in 2H23.” Credit Suisse initiates Datadog as outperform Credit Suisse said in its initiation of Datadog that the cloud-scale applications has a “track record of delivering market defining products.” “Next generation product and business model levered to hyperscaler growth, category leader. Move into security doubles their TAM.” Deutsche Bank names Charles Schwab a top 2023 pick Deutsche said it sees robust earnings growth for the financial services company in 2023. “Overall, amid what we think may be a very volatile year in markets that could end with a strong rebound, we have the highest conviction on the earnings growth outlook for stock price appreciation for Charles Schwab followed by the alternative asset managers.” Bank of America names Nvidia a top 2023 pick Bank of America named Nvidia a top pick for 2023 and said a “soft landing could drive hard takeoff in chips stocks.” “Bumpy start likely to 2023, as stocks digest Q4 gains and are exposed to softer consumer demand in PCs/smartphones/autos/cloud services. However, estimate cuts likely in last innings and anticipation of 2H recovery could drive SOX gains from Q2.” Morgan Stanley downgrades New York Times to equal weight from overweight Morgan Stanley said in its downgrade of New York Times that it sees growing macro ad headwinds. “Recent underperformance in net adds lowers our confidence in capturing the long-term opportunity. In addition, growing macro headwinds to advertising revenues put 2023 expectations at risk. Morgan Stanley names Prologis a top 2023 pick Morgan Stanley said the logistics real estate investment trust company is undervalued for 2023. “Industrials have pulled back and we see undervalued growth in Top Pick PLD’ s (OW) operating segments.” Citi reiterates DraftKings as buy Citi says it sees a “compelling” risk/reward for shares of DraftKings. “We remain optimistic and are buyers at current levels. We continue to view the company’s risk-reward as compelling and maintain our Buy rating and $24 target price.” JPMorgan names O’Reilly and AutoZone as top 2023 picks JPMorgan said auto parts stocks like O’Reilly and AutoZone are the best way to play a soft and hard landing. “In our view, autoparts remains the best way to straddle a hard and soft landing (inflation firm through the cycle, most rational industry, counter-cyclical and cyclical demand patterns) while our staples retailers seem like a much tougher 12-month setup in both scenarios.” Deutsche Bank initiates Shockwave Medical as buy Deutsche said the medical device company is a “compelling” growth story. “We regard Shockwave Medical as among the most compelling growth stories across medtech over the next few years.”
