Here are Thursday’s biggest calls on Wall Street: Barclays upgrades Fidelity National Information Services to overweight from equal weight Barclays said in its upgrade of the financial services and products company that the stock is underappreciated. “Based on our analysis, we see FIS as undervalued at 9x ’24 P/E and upgrade to Overweight from Equal Weight.” Goldman Sachs upgrades Kontoor Brands to buy from neutral Goldman said in its upgrade of the owners of brands such as Lee and Wrangler that it sees robust brand momentum. “We upgrade shares of KTB to Buy from Neutral and see 22% upside to our new $56, 12-month price target. Our constructive thesis is driven by KTB’s: (1) strong brand momentum, which is manifesting in market share gains; (2) opportunity for better sell-in trends to key wholesale partners, following a year of destocking in the channel.” Goldman Sachs upgrades Best Buy to buy from neutral Goldman said it sees multiple expansion for the electronic retailer. “We are upgrading BBY to Buy from Neutral, as we see the potential for a positive demand inflection to drive upside, primarily through multiple expansion.” Goldman Sachs downgrades Foot Locker to sell from neutral Goldman said it sees market share destabilization for the apparel retailer. ” FL’ s market share position will be difficult to stabilize following the Nike allocation changes; and there is potential for downside to current valuation.” KeyBanc upgrades Netflix to overweight from sector weight Key said it seeing more growth levers after the company’s earnings report on Wednesday. “In our view, Netflix is entering 2024E a cleaner story as: 1) paid sharing appears to have changed Netflix’s ability to reach the next ~250M subs; 2) operating profit and FCF are steadily ramping; and 3) buybacks should support a 25%+ EPS growth profile.” Read more about this call here. Morgan Stanley reiterates Tesla as overweight Morgan Stanley lowered its price target on the stock to $380 per share from $400, but says it’s standing by its overweight rating on the stock for now. “How can we be OW Tesla despite the company’s caution on macro, consumer, Cybertruck and Mexico? Can a ‘growth stock’ work if earnings don’t grow in 2024? We think this comes down to where the $5bn annual of R & D is going.” Read more about this call here. Oppenheimer reiterates Amazon as outperform Oppenheimer said it’s bullish on the e-commerce giant heading into earnings next week. ” AMZN is our top large-cap pick heading into ’24, given the company’s exposure to the more affluent consumer, advertising opportunity, significant potential for e-commerce margin improvement, easing headwinds for AWS and recent underperformance vs. GOOG & META.” Jefferies upgrades Zscaler and CrowdStrike to buy from hold Jefferies upgraded several cyber security companies on Thursday and said they will benefit from a slew of secular themes. “While the environment remains challenged, we’ve seen enough positive data to become increasingly positive on the high growth platforms who despite outperforming ytd ( CRWD, ZS ) will continue to benefit from secular themes (enterprise > SMB health, cloud, strong fed, vendor consolidation).” Bernstein reiterates Disney as outperform Bernstein said it’s standing by its outperform rating on the stock but that Disney needs ESPN to show that it can be a “sports aggregator.” “With the cost of sports rights continuing to escalate, Disney needs to prove that ESPN can be the sports aggregator, and thus earns its keep in that manner. It has been reported to look for partners for ESPN to share the economics, or to unite ever more sports under one roof and thus become a true sports aggregator.” Citi reiterates Microsoft as buy Citi said it’s standing by its buy rating ahead of Microsoft earnings next week. “Ahead of Sep-Q earnings, MSFT remains our top mega-cap pick as we see the company accelerating total revenue and profitability helped by stabilizing IT budget trends and new ramping GenAI revenue streams.” Wells Fargo downgrades Graphic Packaging to underweight from overweight Wells double downgraded the packaging company and says it’s concerned about the adoption of weight loss drugs on “boxboard fundamentals.” “We double downgrade GPK to UW given our view that sustained food/bev inflation and emergent GLP adoption could pressure already weakened boxboard fundamentals. Foreign producers are targeting the US boxboard, further pressuring supply/demand.” Wells Fargo downgrades Canada Goose to equal weight from overweight Wells downgraded the winter clothing company due to China headwinds. “We are downgrading GOOS to EW (from OW) due to the following key points: 1) worsening China headwinds likely persist – creating a potential 3rd straight weak holiday in the region (with a growing fixed cost base making matters worse), 2)unfavorable weather backdrop creating a weak seasonal setup in both NA and Europe.” Deutsche Bank initiates Chipotle, Starbucks and Domino’s as top picks Deutsche initiated Chipotle , Starbucks and Domino’s and says the restaurant industry is an attractive sector for long-term investors. “Long term, we view restaurants as an attractive sector with favorable fundamentals, driven by structural factors that have supported stomach share gains over the last several decades (women in the workforce, shift in generational timeline, demand for experiences over goods) and digital strategies to unlock value creation.” Bank of America downgrades Peloton to underperform from neutral Bank of America said it sees revenue risks for Peloton . “In our view, shares do not reflect risk to revenue from increased churn due to declining platform engagement and subscriber base that is increasingly at risk as COVID cohorts reach the average subscriber lifetime.” Deutsche Bank upgrades Spirit Aerosystems to buy from hold Deutsche said in its upgrade of Spirit Aerosystems that shares of the aero-structures company have an attractive risk/reward. “While we previously viewed the downside case and upside case in roughly equivalent terms, it is difficult to see the stock trading back below its recent lows with the existential risk now meaningfully reduced.” JPMorgan upgrades First Solar to overweight from equal weight JPMorgan said it sees an attractive entry point for the solar company. “With this note we are upgrading FSLR to Overweight as we believe the recent pullback tilts risk-reward favorably for a company that has the best visibility into medium-term growth prospects owing to a backlog that stretches into later this decade.” Read more about this call here. JPMorgan upgrades Aptiv to overweight from neutral JPMorgan said in its upgrade of the auto tech company that should benefit from a ” combination of faster top-line growth and company specific margin drivers.” “We are also using this note to upgrade shares of Aptiv (APTV) from Neutral to Overweight, as we expect it will benefit disproportionately as investors increasingly begin to look out to 2025, given a combination of faster top-line growth and company specific margin drivers.”
