Here are Tuesday’s biggest calls on Wall Street: Daiwa upgrades PayPal to outperform from neutral Daiwa said it sees numerous positive catalysts starting to fall into place. “We upgraded PYPL to Outperform as a number of positive catalysts are falling into place including cost reductions and a share buyback in response to the increased stake taken by Elliott Investment Management, the appointment of a new CFO, and the decision to hold an Investor Day event.” Read more about this call here. Daiwa downgrades Visa and Mastercard to neutral from outperform Daiwa said it sees “reduced earnings upside” for the credit card companies. “We have been recommending MA and V with an eye to a recovery in cross-border travel, but with border restrictions almost fully lifted with the exception of some parts of Asia, we now see reduced earnings upside going forward, prompting our downgrade to Neutral.” UBS downgrades Snowflake to neutral from buy UBS downgraded the stock after a series of field checks show slowing spending growth. “Summary Ahead of Snowflake’s 2Q/Jul print on Aug 24th, we caught up with 7 checks (3 partners, 4 customers) to better assess how demand for Snowflake has tracked. This round of field checks felt like a tone downtick relative to prior rounds, with more customers flagging efforts to curtail discretionary data analytics spend.” Read more about this call here . B. Riley downgrades Bed Bath & Beyond to sell from neutral Riley said in its downgrade of Bed Bath & Beyond that margin expectations need to be “tempered.” “We are anticipating 2Q22 earnings within our specialty retail coverage to be in line with the Street after most Street estimates have come down heading into earnings season, and we expect management teams to start lowering guidance and earnings expectations for the 2H.” Read more about this call here. Citi opens a negative catalyst watch on Snowflake Citi kept its buy rating on shares of Snowflake but opened a negative catalyst watch, noting that “usage headwinds [are] continuing to build.” “That said, we are becoming tactically cautious, and open a negative Catalyst Watch, following the recent ~30% run, as we see usage headwinds continuing to build, with consensus numbers too high (Q3 and FY24).” Bernstein reiterates Amazon as outperform Bernstein said shares of the e-commerce giant are “relatively derisked.” “Though investors had previously focused on Amazon’s margin expansion story, core growth took the lead in 2Q. AWS, Amazon’s main growth engine, performed well, even in an environment where tech companies pulled back spending, and continues to see a long secular runway, as evidenced by the impressively growing backlog.” Citi downgrades Zoom to sell from neutral Citi said Zoom has too many post-pandemic challenges. ” Zoom’s post-COVID growth trajectory has always been more challenging, given pullforward dynamics, but we see new hurdles to sustaining growth including rising competition (MSFT/Teams), macro-related weakness hitting SMB and less critical spending categories and margin risk.” Read more about this call here. BMO reiterates McDonald’s as outperform BMO raised its price target on shares of McDonald’s to $300 per share from $285 and says it sees growth acceleration. “We believe MCD is in the early days of realizing accelerated growth and share gains in Europe as the pandemic propelled improvements in MCD’s competitive positioning in these key IOM (intl. operated) markets.” JPMorgan downgrades Elanco to neutral from overweight JPMorgan said in its downgrade of the biopharma pet health company that it sees too many macro headwinds. “Lastly, we are downgrading ELAN to N from OW. The company is seeing more impact than peers from the difficult macroeconomic environment and has less in the way of near-term new products flow (vs ZTS) or pricing power to offset these challenges and we see this trend persisting into 2023.” Bank of America reiterates Apple as buy Bank of America said the firm is standing by its buy rating on shares of Apple after recent App store growth revealed a slight deceleration. “Maintain Buy on upcoming product cycles, long-term growth in Services, sticky ecosystem, further opportunities to monetize the installed base, and strong capital returns.” Morgan Stanley reiterates Salesforce as overweight Morgan Stanley said ahead of Salesforce’s earnings report next week that it the stock has the “most attractive risk/reward in software.” “Aligned with the broader group, checks were more mixed in Q2. However, we see a low bar in terms of investor growth expectations & little appreciation for the margin improvement story. At ~0.6X EV/FCF/growth, a steep discount to peers, we see CRM as the most attractive risk/reward in software. Deutsche Bank reiterates Wells Fargo as a top pick Deutsche kept its buy rating on the banking giant and said it’s one of the “best leveraged” banks to rising interest rates. ” WFC has good leverage to a pickup in US loan growth and is among the best leveraged to rising interest rates.” Bank of America reiterates Snap as buy Bank of America said that revenue risks are already priced into the stock. The firm added it sees a case for Snap’ s “growth to reaccelerate ” “Although, we were surprised by the level of revenue deceleration in Snap’s 2Q results and outlook, we are optimistic that Snap guided 3Q near the period of maximum uncertainty for the US Online ad market. We see a case for Snap’s growth to reaccelerate if consumer eCommerce spending stabilizes on much easier comps, and monetization of new surfaces (Spotlight, Maps) ramps.”
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