Here are Wednesday’s biggest calls on Wall Street: Morgan Stanley resumes Advanced Micro Devices as overweight Morgan Stanley resumed coverage of the semiconductor company after a long period of restriction and said AMD’s valuation is “reasonable.” “While a digestion phase in PCs and consoles appears likely, and we are budgeting for some caution next year, we believe strength in server (with further market share gains) should allow the company to keep posting solid growth at a now reasonable valuation.” Read more about this call here. Monness Crespi Hardt reiterates Amazon as buy Monness said that Amazon will be a key beneficiary of robots and artificial intelligence in the future. “In our view, Amazon is uniquely positioned to exit this crisis as one of the biggest beneficiaries of accelerated digital transformation.” Morgan Stanley upgrades Cigna to overweight from equal weight Morgan Stanley said in its upgrade of the health insurer that it may experience a smaller-than-expected impact from a recession. “Since Cigna acquired Express Scripts (rebranded as Evernorth) in 2019, its multiple, already at industry lows, has contracted 1.1x turns on concerns over increased exposure to the commercial market, a subpar selling season out of the gate, and PBM (pharmacy benefit mgmt)-related headline risk.” BMO upgrades Kraft Heinz to outperform from market perform BMO said it sees a “compelling investment opportunity” in the food company. “We are upgrading KHC to Outperform with a $46 target price or 25% upside from current levels, as KHC’s strategic evolution, which continues to be overlooked by the market, creates a compelling investment opportunity.” Credit Suisse downgrades Dow to underperform from neutral Credit Suisse said it’s concerned about chemical companies such as Dow overearning. “We remain concerned that US basic chemical producers are overearning, just as there appears to be a consumer shift away from goods to services.” Read more about this call here. Loop initiates Taiwan Semiconductor as buy Loop said that the chipmaker’s core business remains “strong.” “Although a semiconductor inventory-driven cyclical peak could lead to a mid-cycle correction in the near term, we believe TSMC’s core business will remain strong through the cycle.” Read more about this call here. Morgan Stanley reiterates Apple as overweight Morgan Stanley said its survey checks show iPhone growth starting to rebound in China. “We believe the measured lifting of COVID related restrictions in China in recent weeks has aided Apple’ s Mac and iPad production.” Wells Fargo downgrades Scotts Miracle-Gro to equal weight from overweight Wells said in its downgrade of the lawn seed company that it sees a slower recovery than expected. “While SMG offers potential to own a recovery story which has been impacted by a host of headwinds in FY22, we don’t think this recovery takes shape until at least FY23 with the new lawn/garden season, and an eventual improvement in the Hawthorne (hydroponic business).” RBC downgrades PulteGroup to sector perform from outperform RBC downgraded the homebuilder as housing growth continues to slow. “We downgrade PHM to Sector Perform from Outperform and lower our PT to $41 from $56, as we reduce both our estimates and PT multiple to better reflect the housing slowdown setting in and downside risks to demand/margins.” Cowen downgrades Burlington to market perform from outperform Cowen said in its downgrade of Burlington that inflation is accelerating and margin goals are too “lofty.” “From a macro level, sector inventory levels and health of the low income consumer are deteriorating and legislation regarding imports from China could cause additional issues.” Cowen names Frontier a top idea Cowen said the cable company is a “market maverick.” “The FYBR story is one of a market maverick with a superior product and pricing advantage entering a Cable-dominated landscape as market share gains should drive a far higher mix of Fiber BB EBITDA and subsequently, meaningful valuation upside.” Cowen downgrades Jack in the Box to market perform from outperform Cowen said it’s concerned about slowing same-store sales growth for the fast food company. “We are concerned about negative Jack SSS (same-store sales) revisions in 2H22 due to proprietary survey data that indicates lagging value perceptions vs. peers.” Seaport downgrades Nike to neutral from buy Seaport said that sentiment around Nike’s stock “isn’t great” with rising inflation and supply chain disruptions. “Downgrading from Buy to Neutral, as we don’t believe NKE ‘s relative multiple is justified by how the company sets up vs. the sector.” Bernstein downgrades Boston Beer to market perform from outperform Bernstein said in its downgrade of the stock that a 2022 cut in guidance is very likely. “It’s never easy to downgrade a stock when it has fallen so far. We still think SAM is a rare gem, with a unique ability to focus on long-term brand building and a track record of four successful waves of innovation. Twisted Tea continues to go from strength to strength and has become the real growth driver for SAM. But Truly just hasn’t performed as we anticipated, and we think a cut to F22 guidance is highly likely.” Read more about this call here . JMP downgrades Airbnb to market perform from market outperform JMP downgraded the stock mainly on valuation. “Though we see ABNB as a dominant player, proliferating a category within travel, we believe the current valuation reflects its market position and see shares as fairly valued.”
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