The most talked about and market moving research calls around Wall Street are now in one place. Here are today's research calls that investors need to know, as compiled by The Fly.
Top 5 Upgrades:
BofA upgraded Birkenstock (BIRK) to Buy from Neutral with a price target of $65, up from $62. The firm thinks that against a backdrop where earnings beats are "becoming increasingly rare," Birkenstock's sustained sales momentum and strong margins will be rewarded with a higher multiple.
DA Davidson upgraded Polaris (PII) to Buy from Neutral with an $87 price target. Although Polaris' FY24 EPS guidance cut was greater than the firm was calling for, a reset was needed given the state of dealer inventories and the firm sees an attractive entry point for investors after the company "prudently reset" expectations and a recent sell-side downgrade.
Baird upgraded Roper Technologies (ROP) to Outperform from Neutral with a price target of $635, up from $617. After the 7% selloff in shares following the Q2 update, Roper is essentially receiving a "trough" valuation on "trough" estimate revisions, creating an attractive risk/reward, the firm tells investors in a research note.
Craig-Hallum upgraded Flex (FLEX) to Buy from Hold with a price target of $39, up from $27. The firm believes Flex is executing as a well-run contract manufacturer focused on sticky, long-term design wins that can drive improved margins, and is also well positioned to benefit from AI-related datacenter opportunities,
Compass Point upgraded MidCap Financial (MFIC) to Buy from Neutral with an unchanged price target of $16. MidCap has closed a three-way merger with Apollo Senior Floating Rate Fund (AFT) and Apollo Tactical Income Fund (AIF) which should eventually result in an improved cushion between net interest income and the current dividend, and the technical selling from closed-end fund shareholders has negatively impacted the price and consequently improved the risk-reward, creating an "advantageous" entry point, the firm tells investors.
Top 5 Downgrades:
Citi downgraded Lululemon Athletica (LULU) to Neutral from Buy with a price target of $300, down from $415. Following years of benefitting from outsized growth in active apparel, trends in the category have slowed in fiscal 2024 with Citi's credit card data in yoga and active apparel pointing to a further deceleration in Q2 versus Q1, the firm says.
Macquarie downgraded Warner Bros. Discovery (WBD) to Neutral from Outperform with a price target of $9, down from $13. The firm cites news that the National Basketball Association has rejected Warner's matching bid for rights for the downgrade.
Argus downgraded Zions Bancorp (ZION) to Hold from Buy. The company's Q2 earnings topped estimates thanks to a rebounding net interest income, but its revenue fell 1% from last year, the prior year to $776 million, reflecting higher interest expenses offset in part by higher rates on loans, the firm tells investors in a research note.
TD Cowen downgraded Edwards Lifesciences (EW) to Hold from Buy with a price target of $70, down from $100. The company is now forecasting high-single-digit revenue growth in 2024 and 2025 due to the deceleration in the transcatheter aortic valve replacement market, the firm says. BofA, Truist, JPMorgan and Baird also downgraded Edwards Lifesciences to Neutral-equivalent ratings.
BofA downgraded Lamb Weston (LW) to Neutral from Buy with a price target of $66, down from $109. The firm notes the company missed fiscal Q4 earnings estimates and said it expects a challenged fiscal 2025 backdrop given continued softness in restaurant traffic, share pressure, a mismatch of supply/demand and the impact from a product withdrawal. TD Cowen and Stifel also downgraded the stock to Neutral-equivalent ratings.
Top 5 Initiations:
KeyBanc resumed coverage of Shopify (SHOP) with an Overweight rating and $80 price target. Shopify's "leading" e-commerce platform is well positioned to capitalize on the growing e-commerce expansion into the retail market through its "best-of-breed" cloud-based solution, the firm tells investors in a research note.
KeyBanc resumed coverage of Wix.com (WIX) with a Sector Weight rating and $165 fair value estimate. The firm's revenue estimates are generally below the Street, reflecting caution on partner revenue growth.
BTIG initiated coverage of Zoetis (ZTS) with a Buy rating and $220 price target. The firm believes the company is well positioned to benefit from "several fundamental growth drivers" of an expanding global animal health market, higher standard of care for increasingly humanized pets, and the growing need for high-quality and affordable protein sources.
BTIG initiated coverage of Idexx Laboratories (IDXX) with a Buy rating and $580 price target. Idexx is "the dominant global market leader in animal health diagnostics," with a particularly strong and deep management team, broad portfolio of market-leading products, and a strong track record of execution and innovation, the firm tells investors.
Morgan Stanley initiated coverage of CBRE Group (CBRE) with an Equal Weight rating and $105 price target. The company is well positioned with a steady double-digit growth from recurring revenues, the potential for improving margins on expense efficiency, and reinvestment of excess cash flow, while a capital markets recovery offers further upside optionality, the firm tells investors in a research note.