Here are Wednesday’s biggest calls on Wall Street: Barclays downgrades Cisco to equal weight from overweight and upgrades Arista to overweight from equal weight Barclays said in its downgrade of Cisco that it sees macro risks. The firm also upgraded Arista and said the computer networking company has “resilient cloud demand.” “We are upgrading ANET to OW from EW and downgrading CSCO to EW from OW. For ANET, we are turning more constructive with resilient cloud demand and campus upside with TAM expansion. For CSCO, we are less optimistic on cloud and software, and see macro and market share risks.” Click here to read more about these calls. Morgan Stanley reiterates Microsoft as overweight Morgan Stanley said it sees an attractive risk/reward for shares of Microsoft after the company increased its quarterly dividend on Tuesday. “Pre-market, Microsoft i ncreased its quarterly dividend by 6 cents or 10% to $0.68 per share. $2.72 annualized dividend yields 1.1%, up from 1.0% prior.” Deutsche Bank reiterates Nike as buy Deutsche said it’s standing by shares of Nike heading into earnings next week. “While there are certainly macro headwinds across the globe and questions around China’s recovery, we believe NKE will continue to show strength in 1) digital (across all regions); 2) North America DTC.” William Blair resumes RH as outperform William Blair resumed coverage of the furniture company and said it sees a long-term opportunity despite some near-term headwinds. “While RH benefited from broader consumer trends over the prior two years, we believe the company remains well positioned for long-term top-line growth and margin expansion, despite some near-term headwinds.” Morgan Stanley names FREYR Battery a top pick Morgan Stanley named the battery company a top pick and said it’s a key beneficiary of the Inflation Reduction Act. “On the back of key milestones (binding offtake agreements, equipment orders, funding identification) and passage of the IRA, we update our FREY model and increase our PT to $26 and Bull Case to $60, moving FREY to our Top Pick.” Canaccord downgrades Stitch Fix to neutral from buy Canaccord downgraded the online personal-styling service after the company’s disappointing earnings report. ” Stitch Fix reported soft 4Q22 results, with active clients, revenue, and adj. EBITDA all coming in below consensus as demand was impacted by the challenging macroeconomic environment and lower retail spend.” Goldman Sachs upgrades Estee Lauder to buy from neutral Goldman said in its upgrade of the stock that investors should buy the weakness. “We upgrade shares of EL to Buy, from Neutral, following the recent pullback in the stock. Uncertainty around the duration of China’s zero-Covid policy and the associated impact on EL’s business remains high, but this now appears adequately reflected in the stock following its de-rating.” Read more about this call here. Jefferies initiates Trupanion as buy Jefferies said the pet insurance company is well positioned for more gains going forward. “We expect insurance to play a key role in a more robust & humanized pet health industry and believe TRUP is well positioned for the multiyear pet health theme.” Mizuho downgrades Micron and Western Digital to neutral from buy Mizuho said in its downgrade of Micron and Western Digital that it sees “steepening price declines.” “We are downgrading MU and WDC , as our recent checks show steepening price declines into DecQ and 1H23. Also, key data center/server markets are starting to show weakness, with softening demand in China/Europe and slowing CPU/ GPU ramps.” Read more about this call here. Deutsche Bank reiterates Costco as buy Deutsche said it sees upside potential heading into earnings on Thursday. ” COST is one of the most consistent operators in our group, and its steady traffic gains and high membership renewal rates serve as key differentiators in an increasingly uncertain backdrop. We see upside potential for 4Q results vs. consensus; we are raising our 4Q EPS forecast to $4.20 from $4.15 and vs. Street $4.14.” Piper Sandler reiterates Beyond Meat as underweight Piper said it sees too much turmoil at Beyond Meat and is giving up on a national launch at McDonald’s. “Growing turmoil at BYND could lead to a CEO change, which likely would lift the stock, though we still expect further downside near term, and many fundamental challenges remain that are not quickly fixed.” Citi opens a 30-day positive catalyst watch on Jabil Citi said shares of the tech manufacturing solutions company are “attractively valued.” “We are opening a positive 30-day catalyst watch for Jabil (JBL) as we view the upcoming non-deal roadshow as a positive for investors to reengage with the company after the long Covid lack of in-person meetings, and we believe the company will guide strong for the upcoming 1Q FY2023 and full year FY2023.” Bank of America adds PayPal to the US1 list Bank of America added the payment company to the firm’s list of top ideas. “We are adding PayPal Holdings Inc. (PYPL) to and removing Visa Inc. (V) from the US 1 list. V remains Buy-rated.” JPMorgan reiterates Nvidia as overweight JPMorgan said Nvidia is “well positioned to continue to benefit from major secular trends in AI, high-performance computing, gaming and autonomous vehicles. Bottom line: NVIDIA continues to be 1-2 steps ahead of its competitors from silicon/systems, software, and ecosystem adoption. We reiterate on our OW rating on NVDA.” Bank of America reiterates Apple as buy Bank of America said its survey checks on Apple show that carrier promos are driving more consumers to upgrade iPhones. “Reiterate Buy on product cycles, long-term growth in Services, sticky ecosystem, further opportunities to monetize the installed base, and strong capital returns.” SMBC Nikko downgrades Block to neutral from buy The firm said in its downgrade of the company formerly known as Square that it sees “too many crosscurrents.” “While we continue to believe SQ is one of the highest quality long-term names in our coverage, we are downgrading the stock to Neutral on (1) hard-to quantify, but material crypto exposure, and (2) a lack of medium-term visibility.” Cowen reiterates Chipotle as outperform Cowen raised its price target on the stock to $1,950 per share from $1,850 and said it’s getting increasingly confident in the stock. “We highlight strengthening value perceptions within proprietary survey data that supports CMG’s elevated 2H22 pricing levels & future pricing power. Longer term, we have increased confidence in targeted 27% restaurant margins at $3 million sales volumes that we model in 2024 vs. 26.0% Consensus Metrix.”
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