Here are Wednesday’s biggest calls on Wall Street: Telsey reiterates Home Depot as outperform Telsey said it’s bullish heading into Home Depot earnings next week. “We are maintaining our 2Q22 and annual estimates for several reasons. First, macro support for home-improvement spending remains decent, with elevated home prices, healthy remodeling activity, and solid household formation.” Telsey reiterates Lowe’s as outperform Telsey said it’s bullish ahead of Lowe’s earnings next week. “For a few reasons, we are maintaining our above-consensus 2Q22 and annual comp and EPS estimates. First, macro support for home-improvement spending remains decent, with elevated home prices, healthy remodeling activity, and solid household formation. Second, monthly sales data from the U.S. Census Bureau shows Building Materials, Garden Equipment, and Supply retailers still saw solid YoY growth — 8.1% in May and 6.7% in June.” Morgan Stanley downgrades Allbirds to equal weight from overweight Morgan Stanley said it sees “macroeconomic deterioration” for the shoe company. “Macroeconomic deterioration, slower sales growth & a potentially longer timeline to profitability likely pushes out the re-rating catalyst we had hoped for. We think the stock could remain range-bound until the path to profitability is more clear. Downgrade to Equal Weight with a $5 PT. Read more about this call here. Bank of America downgrades The RealReal to underperform from buy Bank of America double downgraded the online luxury fashion retailer and says it sees a tougher macro environment for The RealReal. “We are downgrading to Underperform as: 1) Tough macro backdrop takes hold, with competition elevated across Online luxury, while consumers impacted by inflation shift away from more discretionary items; 2) Founder/CEO Julie Wainwright’s departure in June raised initial red flags on mgmt direction, and the CEO search is still underway.” KBW downgrades Coinbase to underperform from market perform KBW downgraded Coinbase after its earnings report on Tuesday and said it sees slowing retail trading trends. “We are lowering our revenue and adjusted EBITDA estimates on the weak volume trends into 3Q-TD and a mix-shift towards lower-fee institutional trading. We maintain our existing price target of $45, but lower to UP from MP after the recent surge in the shares. Atlantic Equities reiterates Bank of America, Morgan Stanley and Wells Fargo as overweight Atlantic Equities said that several big investment banks have attractive valuations right now. “Facing obvious economic headwinds, the banks are clearly out of favor, but valuations at sub-10x 12-month forward PEs are close to their historic lows. We therefore regard the sector as attractive on a 2-3 year view and reiterate our Overweight ratings on BAC, MS , WFC and FRC.” HSBC downgrades Altice USA to hold from buy HSBC said in its downgrade of Altice USA that it sees weakening subscriber trends. “Q2 22 results: weak trends and still losing customers in a competitive market, while capex remains high.” Morgan Stanley downgrades Energizer to equal weight from overweight Morgan Stanley downgraded the battery company after its disappointing earnings report Tuesday. ” ENR posted mixed FQ3 results while guiding to the lower end of it’s prior FY23 EPS range, with FX pressure. With negative EPS revisions, macro risks exacerbated by high leverage, and limited catalysts, we move to EW.” Deutsche Bank downgrades Moody’s to hold from buy Deutsche said the financial and credit rating agency’s stock valuation is stretched. “With MCO stock up +10% over the last month, relative valuation has become extended, in our view. Historically, MCO traded at a 30% premium to NTM market multiples; having increased closer to 50% post-pandemic and now at 75%. ” Bernstein reiterates Apple as market perform Bernstein said that Apple Services, which like Apple TV+, is going to perform better than investors believe. “The upshot is that FY 22 Services margins (and growth) have been pressured as the accounting change runs through the P & L. The good news is that Apple is anniversary-ing the free trial change in Q4 this year, meaning the sequential impact going forward is now largely immaterial; though FY 23 will continue to see a modest YoY impact.” Stifel upgrades Linde to buy from hold Stifel said it’s becoming more constructive on the chemical company’s stock. “We have become more constructive on the margin progression in an inflationary environment. Structural growth drivers gain in importance and should fuel mid-term growth.” RBC reiterates Disney as outperform RBC lowered its price target on shares of Disney to $150 per share from $176, but said it sees a solid quarter when the company reports earnings on Wednesday. “Our view: Disney remains one of our top picks across our coverage given the re-rating we see ahead as the Street better appreciates the meaningful DTC growth opportunity and durable strength at the Parks.” MoffettNathanson downgrades Roku to underperform from market perform Moffett cited the company’s disappointing earnings report on late July. “Yet, once again, we now find ourselves in a similar position with long-term estimates that are below consensus and a stock that has surprisingly bounced back after an incredibly weak 3Q 2022 revenue guide. We see Roku’s competitive position challenged from all sides with investment spending a necessity to remain competitive.” Read more about this call here. Bank of America adds Meta to the US1 list and removes Alphabet Bank of America added the social media company to its US1 top picks list. “We are adding Facebook parent Meta Platforms Class A (META) and removing Google parent Alphabet Class A (GOOGL) from the US 1 list. GOOGL remains Buy-rated.” Read more about this call here. Argus downgrades Twilio to hold from buy Argus downgraded the communication tools programming company after its mixed earnings report last week. “We are lowering our rating on Twilio Inc. to HOLD from BUY. The stock fell 14% in a mixed market on 8/5/22 after the company delivered better-than-expected 2Q22 revenue, but guided conservatively on third-quarter revenue.” DA Davidson downgrades Okta to neutral from buy DA Davidson said in its downgrade of the identity-access management company that its field checks show that it’s pricing advantage is waning. “Following a round of field checks & our FQ2’23 reseller survey, we are downgrading OKTA to NEUTRAL & lowering our PT from $140 to $105. Our downgrade is based on 1) increasing concerns around increased sales turnover & Auth0/Okta sales integration issues, 2) negative results from our reseller survey.”
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