Here are Thursday’s biggest calls on Wall Street: Citi upgrades Boeing to buy from neutral Citi said it sees several positive catalysts ahead for Boeing . “We believe 787 deliveries will resume shortly. Similarly, last year, the Chinese authorities agreed what modifications and training are required to return the 737MAX to commercial service.” Read more about this call here . Morgan Stanley upgrades AutoZone and Dollar General to overweight from equal weight Morgan Stanley said it likes the auto parts store’s pricing power. The firm also upgraded Dollar General and says it sees a “favorable risk/reward.” “Shifting ratings to favor defensive stocks with offensive characteristics. Upgrading AZO & DG to Overweight. Read more about this call here. JPMorgan reiterates Apple as overweight JPMorgan said that Apple’ s payment ecosystem is a $30 billion opportunity. “That said, gaining share in the Payments market is ‘a marathon, not a sprint’, and we estimate a SAM of $30 bn+ on the horizon, with likely many avenues of upside as Apple continues to bolster its portfolio and expand and penetrate its installed base.” Bank of America reiterates Wells Fargo as buy Bank of America said shares of Wells Fargo have a “compelling” risk-reward outlook. “Wells is uniquely positioned among the mega cap banks in terms of having expense leverage (reduce costs/mitigate the inflationary pressures impacting the industry).” Benchmark initiates Unity Software as sell Benchmark said it sees a “challenging environment” ahead for the video game software developer. “We suspect sustained economic malaise, post-pandemic normalization on player engagement and user acquisition, and rationalized spend scenarios could be a challenging environment for Unity’ s growth profile.” Oppenheimer names Generac a top pick Oppenheimer named the battery backup company a top pick, saying it likes the company’s exposure to “power quality investment trends.” “Exposure to power quality investment trends and valuation inform our top picks: EMR (automation, digitization), RRX (motion control, electrification), GNRC (distributed energy exposure, grid services, microgrid hardware and design).” Deutsche Bank upgrades Republic Services to buy from hold Deutsche said the waste disposal company provides a compelling earnings growth opportunity. “We are upgrading Republic Services t o a Buy rating as it (i) is an inflation hedge in today’s environment, (ii) is a safe haven in market downturns and (iii) provides compelling earnings growth especially on a risk adjusted basis. Core pricing should continue to accelerate and offset inflation, while in some cases pricing is linked to CPI.” JPMorgan downgrades Warner Bros. Discovery to neutral from overweight JPMorgan resumed coverage of Warner Bros. Discovery after a period of restriction and downgraded the stock, saying it has concerns about the company’s ability to scale services internationally. “We believe skepticism in WBD’s global DTC ambitions is reflected in the current share price, but we await details on the company’s new (combined) go-to-market DTC strategy in the coming months as we expect subs to fall as the AT & T HBO subs are reconciled, and DISCA+ subs integrated into HBO next year. Read more about this call here. Cowen reiterates Meta Platforms as outperform Cowen said that its survey checks show that user engagement is rising for Meta’s short video service, Reels. The firm said its usage is a positive for Meta but it’s weighing on near-term monetization. “Our survey data shows that 21% of IG (Instagram) users regularly used Reels in May ’22, the highest level since we started asking the question.” Goldman Sachs reiterates FedEx as buy Goldman said in a note on Wednesday night that it’s cautiously optimistic heading into FedEx earnings next week. “While concerns have arisen surrounding macroeconomic impacts to volume, we leave revenue estimates unchanged with expectations that FDX should be able to makeup shortfalls in volume with yield performance.” JPMorgan reiterates Amazon as overweight JPMorgan said in a deep dive note Thursday that it sees more upside to Amazon’s advertising platform. “We believe Amazon is well positioned as the 3rd largest scaled digital ad platform given some distinct operational advantages in advertising.” Deutche Bank reiterates Uber as buy Deutsche Bank said shares of Uber look “increasingly compelling.” “Our take is that the rideshare sell-off is overdone, especially for Uber given its improved supply mousetrap, higher utilization rates, and growing valuation support (particularly on FCF yield which is now appearing increasingly attractive).” Consumer Edge downgrades J.M. Smucker to underweight from equal weight Consumer Edge downgraded the food company, citing elevated pricing. “We have lowered our rating on shares of J.M. Smucker to Underweight from equal weight owed to volume elasticity driven by elevated pricing.” Jefferies downgrades DuPont to hold from buy Jefferies said in its downgrade of DuPont that it sees demand destruction and margin pressure. “We expect the next few quarters to be particularly difficult for companies with financial leverage ratios well above the sector average (e.g. CE, DSEY, IFF), that have more complex SOTP arguments indirectly tied to the resilience of cyclical end-markets (e.g. DD , EMN), or that could face persistent margin pressure as cyclical end-markets decelerate.”
© heardonwallstreet.com