Here are Thursday’s biggest calls on Wall Street: Baird reiterates Zoom as outperform Baird said Zoom earnings should be “solid” when the teleconferencing company reports quarterly results next week. “We expect solid FQ2 results, though the investor focus will be on the 2H outlook, and whether total growth can still reaccelerate exiting the year in light of the current macro-economic climate. Bank of America reinstates Hasbro as buy Bank of America resumed coverage of the toy maker and said it has one of the “best ever content lineups.” “We’re reinstate on Hasbro with a Buy rating as the company has one of its best ever content lineups ahead with Black Panther this holiday season, followed by Ant-Man, Dungeons & Dragons, Guardians of the Galaxy, Spider-Man, Transformers and Star Wars next year.” Bank of America initiates Mattel as buy Bank of America said in its initiation of the toy company that it’s now in “growth mode.” “We’re initiating on Mattel with a Buy rating as the company has successfully completed its turnaround and is now in growth mode.” Read more about this call here. Citi opens a positive catalyst watch on American Airlines Citi said it sees upside for American due to declining fuel prices. “Citi’s recent Airlines Alpha work has continued to show resilient demand for air travel. … On top of this, American Airlines and Volaris could see upside from declining fuel prices that the market does not seem to appreciate fully.” MoffettNathanson downgrades Verizon to underperform from market perform Moffett said in its downgrade of the telecommunications giant that it appears “particularly vulnerable.” “Driving all of this is TMUS widening competitive advantage in 5G. In survey after survey, T-Mobile is pulling away, winning consistently not only for download and upload speeds, but for coverage and availability as well. Verizon’s customer base, self-selected for their ‘best network’ positioning, appears particularly vulnerable.” Read more about this call here. Oppenheimer reiterates Nvidia as buy Oppenheimer said it’s sticking with shares of Nvidia heading into earnings next week. “We see several structural tailwinds driving sustained outsized top-line growth: gaming, datacenter/AI accelerators, and autonomous vehicles.” Evercore ISI reiterates Dick’s as outperform Evercore said its standing by its buy rating heading into Dick’s earnings next week. “However, we think our below-consensus 2Q and FY estimates are both already baked into buyside expectations and that a FY guidance cut may not necessarily be a negative catalyst for shares at this point (and especially if traffic commentary remains positive, as we expect it will).” Piper Sandler initiates Freshpet as overweight Piper said in its initiation of the pet food company that it sees a “long runway for growth.” “We believe Freshpet’s brand equity and product differentiation set it apart in the pet food space, and expect a long runway of strong growth.” Read more about this call here. Oppenheimer reiterates Chipotle as a top pick Oppenheimer said it sees more upside for shares of Chipotle. “Refreshed top picks list: CMG: We see a path for 10%+ EPS upside in ’23 as consensus discounts margin flow-through dynamics as AUVs (average unit volume) expand to $3M and beyond. Unit growth acceleration also underappreciated.” KeyBanc downgrades Brinker to sector weight from overweight Key said in its downgrade of Brinker that it sees limited earnings visibility for the owner of Chili’s. “We believe the stock’s upward trajectory was a function of improved sentiment with commodity prices likely peaking.” Bank of America reiterates Virgin Galactic as underperform Bank of America lowered its price target to $5 per share from $7 due to spaceflight delays. ” Virgin Galactic (NYSE: SPCE) announced that progress on their enhancement program in Mojave is taking longer than they had planned. Consequently, the company is shifting the expected launch of commercial service from 1Q23 to 2Q23.” Morgan Stanley downgrades Elanco to equal weight from overweight Morgan Stanley downgraded the pet health company after it reduced its 2022 outlook. ” ELAN’ s ’22 guide cut / medium-term outlook retraction was not surprising, but we are still left with many of the same questions as before the 2Q print regarding visibility on LT profit trajectory.” Cowen reiterates Starbucks as outperform Cowen said it sees margin expansion ahead for Starbucks. “We see the highest probability that the 9/13 investor meeting will be a positive catalyst if 1) a new CEO with a strong track record is named; and 2) long-term operating margin guidance is provided containing 17% in the range.” Northcoast downgrades World Wrestling Entertainment to neutral from buy Northcoast downgraded the stock mainly on valuation. “We are moving our rating on shares of the WWE from BUY to NEUTRAL as the stock has surpassed our price target of $68 on what we would call a realization of solid business and improving partnership and content monetization, but also what we would describe as non-fundamental related speculation.” Morgan Stanley reiterates Sunrun and Plug Power as overweight Morgan Stanley said Sunrun and Plug Power are beneficiaries of the Inflation Reduction Act. “The Inflation Reduction Act, recently passed by Congress and signed by President Biden, will in our view accelerate the decarbonization of the US economy, lead to significant increased domestic manufacturing, and provide the necessary support to jump-start decarbonization technologies that are on the cusp of being commercially viable.” Evercore ISI downgrades Krispy Kreme to in line from outperform Evercore said in its downgrade of Krispy Kreme that the “mobility recovery [is] failing to provide the expected boost.” “We are moving to the sidelines and downgrading Krispy Kreme shares to In Line as the company deals with consumer spending headwinds in the UK and—to a lesser degree—the US. Weaker UK consumption trends are impacting growth at both Krispy Kreme’s grocery business and its own retail stores (combined +LSD growth) despite improving mobility—a factor that is helping McDonald’s in that market.” Needham downgrades Analog Devices to hold from buy Needham downgraded the semiconductor company after its earnings report on Tuesday and said it’s concerned about a “broader slowdown.” “Following a solid F3Q22, we are downgrading ADI to Hold from Buy for several reasons: 1) B2B (still above 1:1) fell below previous qtrs as orders moderated and cancellations increased slightly at the end F3Q22. We think ADI, and the semiconductor industry in general, is just beginning to see the start of a broader slowdown.” Read more about this call here. Bernstein downgrades United Rentals to underperform from market perform Bernstein said in its downgrade of the equipment rental company that it sees construction demand destruction. “Demand destruction is coming for construction (50% of URI sales) and recent fiscal stimulus is not enough to stop the decline.” Wedbush downgrades Bed Bath & Beyond to underperform from neutral Wedbush said in its downgrade of the “meme” stock that it’s concerned about cash burn. “More pressing, however, is BBBY’ s cash burn and the prospects for further financing needed to shore up its balance sheet and rebuild supplier confidence. Free cash flow (FCF) was a whopping -$488m in F1Q, and BBBY ended the quarter with only $108m in cash even after drawing $200m on its asset-based credit facility Read more about this call here. Bank of America upgrades BJ’s to buy from neutral Bank of America said in its upgrade of the stock that it sees “strong trends in tough environment.” “We view BJ’ s as well-positioned in both the near-term as well as long-term given its strong value proposition (particularly in fuel, where comp gallons increased 18% in 2Q vs. a down overall market) in a highly inflationary environment which should enable the company to continue to gain share.”
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