Here are Tuesday’s biggest calls on Wall Street: BTIG downgrades Zoom to neutral from buy BTIG downgraded the telecommunications company after its disappointing earnings report Monday. “On Monday, August 22, AMC, Zoom reported muted 2Q23 results with the top line coming in below expectations – FX and Online overshadowed another solid Enterprise quarter – even while margins and EPS were well above Street estimates.” Read more about this call here . Wolfe reiterates General Electric as outperform Wolfe said the wind production tax credit in the Inflation Reduction Act should serve as a catalyst for GE shares. “This is why the restoration of the PTC (production tax credit) in the Inflation Reduction Act, with project visibility over the next 10 years, is such an important catalyst for recovery.” Morgan Stanley downgrades Grocery Outlet Holdings to underweight from equal weight Morgan Stanley said shares of Grocery Outlet holdings are “getting ahead of fundamentals.” “Long-tailed growth story with trends inflecting — but stock is getting ahead of fundamentals as 1) flow through may underwhelm, 2) ’23 estimates look too high, 3) valuation is at the top of our coverage, and 4) long-term DCF suggests the stock is fully valued.” Read more about this call here. Bank of America reiterates Amazon as buy Bank of America said it sees further growth inflection for Amazon in the third quarter. “We are estimating that Amazon’s US growth accelerates to 17% in 3Q from 5% in 2Q, more acceleration than general merchandise peers or industry.” Piper Sandler reiterates McDonald’s as overweight Piper said McDonald’s stock continues to “stand out.” “We are publishing our July proprietary channel checks (CC) highlighting one name: McDonald’s. McDonald’s continues to stand out among peers, which looks largely to do with their committed decision to provide consumers a consistent-affordable option.” Baird reiterates PayPal as outperform Baird said the stock remains a top idea for the second half of the year. “We continue to like PYPL as a good 2H stock idea with easing growth comps and accelerating growth amid improving e-commerce trends. PayPal also continues to take share in its core digital wallet market, while benefiting from a leaner expense profile, and maintaining a active share repurchase program.” JPMorgan reiterates Apple as overweight JPMorgan said recent Apple survey shows “better iPhone share.” “Recent surveys from Wave7 Research into US sales trends across various carriers indicate that iPhone 13 share remains elevated relative to prior iPhone cycles; with fewer people delaying their purchases in the wait of iPhone 14, which some reps (45%) say, is driving lower interest for iPhone 14 relative to the past product cycle.” Wolfe reiterates Uber as a top pick Wolfe said it sees a “significant runway for profitability” for Uber. ” UBER remains a top-idea in mobility for 2H given the significant runway for profitability and FCF growth in 2H22 and FY23.” Bank of America reiterates Palo Alto Networks as buy Bank of America said shares of Palo Alto are resilient after the company’s strong earnings report on Monday. “Surprisingly, product growth was strong again, up 20% YoY, despite tough comps, likely supported by better supply chain. Read more about this call here. Piper Sandler reiterates Robinhood as neutral Piper said in a note that the recent uptick in retail trading activity is a positive for Robinhood shares. “Recent uptick in meme stock driven retail volumes a modest positive for HOOD, we suspect more neutral for wholesale market makers.” Citi reiterates Walmart and Target as buy Citi said in a note that Walmart and Target are taking share in grocery. “Although perhaps not as shocking as 1Q results, given the size and breadth of offering of these two retailers, there were things we learned in 2Q that have implications for not just WMT/TGT but also the rest of retail.” Citi reiterates Peloton as buy Citi said in a note that it’s standing by shares of Peloton heading into earnings later this week. “To be clear, increased sub pricing may impact churn and higher product pricing could impact revenue, particularly given broader macro-uncertainty. But we also believe Peloton is now a more streamlined organization with a loyal subscriber base and we reiterate our Buy rating and $28 TP.” Atlantic Equities reiterates Warner Brothers Discovery as overweight Atlantic Equities said in a note that Warner Brothers Discovery shares have “quality assets at a huge discount.” “The streaming strategy outlined was also very focused on improving profitability over a subscriber land-grab, a move which some have determined as anti-consumer but, in our view, makes a lot of sense given the evaporation of Netflix’s sub and profit progress.” Wedbush upgrades Denny’s to outperform from neutral Wedbush upgraded the restaurant chain after “very positive” management meetings. “We came away from meetings with CFO Robert Verostek, VP of IR Curt Nichols, and Director of IR Kayla Money incrementally positive that 1) DENN is poised to successfully hurdle 2H:22 and 2023 expectations; 2) DENN’ s historical drivers of consistent 10%+ annual EPS and FCF/share growth are unlikely to change under new CEO Kelli Valade.” Bank of America reiterates Astra Space as underperform Bank of America lowered its price target on the space satellite company to 70 cents per share from $2.70 as no launches are expected until 2023. “In response to continued issues on the initial launch system (Rocket 3.3), Astra is opting to shift focus to Launch System 2.0 (Rocket 4.0) and will no longer be developing or launching the previous generation rocket.” Citi reiterates Petco as buy Citi said in a note that pet retail stocks like Petco have pricing power during an inflationary environment. “Pet retail continues to be a bright spot of consumer spending with retailers having pricing power to pass on inflation.” Wedbush reiterates AMC as underperform Wedbush lowered its price target on AMC to $2 per share from $4 mainly due to valuation. “Theatrical exhibition is on the path to normalization, with quality movies drawing crowds back to theaters regularly. That said, the volume of content has not yet returned to pre-pandemic levels, and release slate holes such as the 2H of Q3 are largely driven by production delays over the last year.” Read more about this call here . Morgan Stanley reiterates Affirm as overweight Morgan Stanley said it’s cautiously optimistic heading into the consumer lending company’s earnings later this week. “We still think investors lack urgency and want to see how Affirm consistently manages through fast-evolving risks over the next several quarters before they can turn positive on the stock.” Argus initiates AutoNation as buy Argus said in its initiation of the car dealership company that it’s “well positioned for the future of auto buying.” ” AutoNation recently reported 2Q22 results that topped consensus expectations. •Management noted that the company remains on track to operate more than 130 used vehicle stores by the end of 2026, up from a current 11. •Our target price is $150, implying a multiple of 6-times our 2023 EPS estimate.” New Street reiterates Tesla as buy New Street said it sees a “monster beat” in the third quarter for Tesla. ” Tesla FCF: Expect a monster beat in 3Q. … And a rapidly growing cash pile beyond.”
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