Here are Wednesday’s biggest calls on Wall Street: BMO initiates CrowdStrike as outperform BMO initiated the cybersecurity company and called it “best-in-class.” “We believe that CrowdStrike offers best-in-class endpoint security capabilities and an expanding platform that will help CrowdStrike compete against Microsoft and other vendors.” Read more about this call here . Citi opens a catalyst watch on Qualcomm and Intel Citi opened a negative catalyst watch on Qualcomm and Intel due to concerns about weakness. “We expect weakness for both Intel and Qualcomm stocks during earnings given we have received a lot of investor interest in both stocks combined with lower guidance.” Morgan Stanley upgrades Gap to equal weight from underweight Morgan Stanley said it sees more “upside than downside” for the stock. “On GPS, we see more upside than downside at current levels, & move to Equal-weight with an unchanged $12 price target from Underweight prior.” Morgan Stanley downgrades Skechers to equal weight from overweight Morgan Stanley downgraded the stock on valuation. “For SKX , while the financial profile & long-term opportunity remains compelling, we opt to move to Equal-weight with a $46 price target for a few reasons. 1) The stock sits at the upper end of its historical valuation range, & we fear re-rating may be unlikely while 2) investors digest potentially below-expectations ’23e EPS guidance.” Morgan Stanley names Apple a top 2023 pick Morgan Stanley said Apple is a “rare best-of-both worlds outperformer.” “We see Apple as a rare best-of-both worlds outperformer – a more defensive, quality name during challenging times, but an outperformer in the early cycle.” Mizuho upgrades Oatly to buy from neutral Mizuho said it sees accelerating growth for the oats beverage company. “We do not expect FCF-positive operations until 2H24, but liquidity tightness appears manageable and EBITDA can inflect positive exiting FY23. Limited elasticity for plant bevs supports our bullishness and improving capacity should accelerate OTLY growth.” Cowen downgrades Yeti to market perform from outperform Cowen downgraded the lifestyle outdoor brands company on moderating e-commerce traffic trends. “We are downgrading YETI to Market Perform and lowering our price target to $47 as data regarding brand level e-com traffic trends is moderating into FY23 with DTC a key top-line and margin driver.” Baird names Tesla a top 2023 pick Baird said it’s standing by its outperform rating on Tesla shares. “Demand concerns and near-term macroeconomic headwinds loom over the stock after falling nearly 70% in 2022. We are encouraged by the ramp of gigafactories at Berlin and Austin and believe the long-term setup is strong.” Morgan Stanley names Amazon a top 2023 pick Morgan Stanley said Amazon is operating from a “leading e-commerce profit generating position.” “Amazon’s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest” Citi downgrades Morgan Stanley to neutral from buy Citi downgraded Morgan Stanley after its earnings report mainly on valuation. “In our view, the market is pricing in best in class returns and we do not see significant relative upside.” Read more about this call here. Bank of America downgrades Levi’s to neutral from buy Bank of America said it’s concerned about denim demand uncertainty. “We are downgrading LEVI to Neutral from Buy and lowering our PO to $17 (from $19) or 8.5x EV/EBITDA (prev 9x) as we foresee 20% downside to 1H23 estimates and remain uncertain that denim demand will improve in the near term.” Read more about this call here. Evercore ISI upgrades GoDaddy to outperform from in line Evercore said the web hosting company is defensive in a recession. “First, with GoDaddy we see a company with a reasonably recession resistant business model should translate into HSD/LDD% revenue growth even in a challenging macro environment.” KeyBanc reiterates Netflix as sector weight KeyBanc said it’s cautiously optimistic heading into Netflix earnings on Thursday. “Coupled with the removal of net add guidance and monetization events on the horizon (e.g., ads, password sharing, and likely a 1H23E price increase), we believe there will be little for investors to nitpick on the print.” Morgan Stanley names DraftKings a top 2023 pick Morgan Stanley said it sees an “inflection in profitability” from the stock in 2023. ” DraftKings ($20 PT): We expect an inflection in profitability in 2023 to surface value from the company’s NOL (net operating loss) and decouple the stock from the broader ‘unprofitable tech’ basket.” Morgan Stanley reiterates Microsoft as overweight Morgan Stanley said it’s staying bullish on the stock heading into earnings next week. “While indicators that Microsoft is not immune to the weaker IT spending environment aren’t hard to find, the preponderance of evidence in our survey work suggests favorable near-term consolidation trends and further improvement in the longer-term positioning against core secular growth initiatives.” Bank of America names Planet Fitness a top 2023 pick Bank of America said it likes Planet Fitness’ relatively defensive business model. “we believe fitness is resilient in an economic downturn as health club members & overall industry revenue increased from 2007-2009.” Deutsche Bank initiates Mobileye as buy Deutsche initiated the autonomous driving company with a buy on Wednesday and said it sees “earnings acceleration.” ” Mobileye is at the start of considerable revenue and earnings acceleration, in our view, as automakers and mobility providers adopt its cost-effective turnkey solutions which scale up to ever-higher levels of autonomy.” Redburn downgrades Exxon to sell from neutral Redburn downgraded the oil and gas giant on valuation. “We continue to like Chevron and Exxon’s focus on low-risk repeatable upstream growth and their more conservative approach to low-carbon investments. … .We downgrade Exxon to Sell on valuation and keep Chevron on Neutral.” Morgan Stanley downgrades IBM to equal weight from overweight Morgan Stanley downgraded IBM and said “late cycle outperformance [has] runs its course.” “we downgrade IBM to EW (from OW) as rev growth decelerates and risk of underperformance in a 2H23 early cycle bounce increases.” Read more about this call here . Morgan Stanley upgrades Seagate to overweight from equal weight Morgan Stanley says it’s “constructive” on shares of the hard disk drive data storage company. “We forecast STX will report December quarter revenue and earnings of $1.6B and ($0.07), respectively, below the low end of the company’s previously issued guidance driven by more severe near-term production cuts and weaker end-market demand.”
