Here are Wall Street’s biggest calls on Thursday: Citi names Microsoft as top pick Citi said it sees double-digit growth for Microsoft. ” MSFT joins the top 3 as our top GARP/ large cap pick in software as we expect it to sustain DD% growth in CY23.” Guggenheim names Nike a top 2023 pick Guggenheim said Nike’s brand remains “healthy and strong.” ” Nike remains our Best Idea heading into 2023 as we expect the company’s underperformance in ’22 to reverse in ’23.” Cowen downgrades JetBlue to market perform from outperform Cowen said it doesn’t see JetBlue shares outperforming in 2023. “The shares have underperformed the group and the market this year. The pending merger with Spirit Airlines is not set to close before 2024 at the earliest, with no guarantee it will be approved. We believe the shares are unlikely to outperform the group in 2023.” Deutsche Bank adds a catalyst call buy on Nio Deutsche Bank added a short-term buy idea on the stock and said it sees several positive catalysts for Nio going into 2023. “First, while the weekly registration data so far in Dec has been soft, we believe delivery volume will ramp up considerably over the remainder of the month. Management indicated that it produced the 300,000th vehicle on Monday and that this vehicle would be delivered in 2-3 weeks.” Read more about this call here . Wells Fargo initiates Blackrock as overweight Wells said it sees “better flow profiles” for the asset management company. “Clients’ net fund flows (gross new sales less redemptions) tend to be the metric investors use to assess the quality of an asset manager’s AUM growth. Flows also serve as an important factor driving valuations of asset manager stocks compared to each other.” HSBC initiates Nvidia as reduce HSBC said earnings downside is not factored in for Nvidia . “Earnings downside likely not fully factored in; we are 9% below consensus for 2024e and provide further downside scenarios” Wells Fargo names Bank of America a top 2023 pick Wells named the banking giant as a top pick and said it could be due for a re-rating in 2023. “Indeed, we think banks should perform better in an upcoming recession than for any other in modern history. We’d be overweight. Our top 3 are BAC (favorite), USB and PNC.” Piper Sandler initiates Sally Beauty as overweight Piper said the beauty company is well positioned for long-term growth. “With the company entering into a transformational phase a few years ago that’s now nearing completion, we’re looking at SBH from a fresh lens and believe the company is set up well to deliver consistent comp growth and margin expansion over the long term, which have been key things holding investors and the Street back in recent years.” Bank of America names Amazon a top 2023 pick Bank of America said Amazon is a “share gainer” that will continue in 2023. ” Amazon will gain share in eCommerce and grow margins following massive fulfilment investment.” RBC reiterates Tesla as outperform RBC lowered its price target on the stock to $225 per share from $325 but said shares remain “compelling.” ” TSLA stock will likely remain under pressure as gross margin expectations re-calibrate, but once this occurs, we see a compelling case for TSLA to still drive earnings/FCF higher as the low cost leader and leveraging opex. Barclays downgrades Marriott to equal weight from overweight Barclays said in its downgrade of the stock that its valuation is now “more fair.” “We downgrade MAR to EW, from OW, and despite its industry leading loyalty program, highly attractive asset-light business model, and top of the line management team, MAR now trades right in line with our PT, which is based on a valuation that we believe is fair.” Read more about this call here . Wedbush initiates CrowdStrike as outperform Wedbush said it likes the cybersecurity company’s “cash flow support.” ” CRWD is a leading cybersecurity company with a broad portfolio of offerings. It has evolved from an endpoint security vendor into a cybersecurity platform, with adjacent opportunities in the Observability space.” Morgan Stanley upgrades Verizon to overweight from equal weight Morgan Stanley said Verizon shares are “historically” attractive. “We upgrade VZ to Overweight and increase our PT to $44, offering > 20% total returns. Following significant underperformance in ’22, VZ trades at a historically attractive valuation on an absolute and relative basis.” Read more about this call here. Morgan Stanley downgrades AT & T to equal weight from overweight Morgan Stanley said it sees a more balanced risk/reward. “We downgrade shares of AT & T to Equal-weight following sustained outperformance in 2022 driving less attractive relative valuation, particularly vs VZ.” Goldman Sachs downgrades Western Digital to sell from neutral Goldman said it’s concerned about balance sheet pressure. “Given our expectation for a severe memory industry downturn, and historically low trough gross margins by extension, we are downgrading Western Digital to Sell with an updated 12-month price target of $31 as we believe net leverage on the company’s balance sheet is likely to come under greater scrutiny by investors, and may constrain operating activities in the near-term, presenting a risk to WD’s post-cycle competitive position.” Read more about this call here . Cowen reiterates Disney as market perform Cowen said it remains skeptical that CEO Bob Iger can meaningfully change the trajectory of the business. “We estimate that Disney has created $26.1B in economic value since FY06. However, that is down from $38.0B three years ago, with the primary driver of recent value destruction being the acquisition of Fox in FY19.” Evercore ISI downgrades Delta to in line from outperform Evercore said it sees a more balanced risk/reward. “We are lowering our rating on DAL shares to In-Line from Outperform given its investor day catalyst has now happened + optimistic ’23 outlook provided yesterday.” Morgan Stanley downgrades Lockheed Martin to equal weight from overweight Morgan Stanley said it sees more “limited upside” for shares of the defense company. ” LMT had been our favored tactical value play in 2022, but we now downgrade from OW to EW as strong QTD price performance (+19% vs. the S & P +10%) provides more limited upside.” Wolfe initiates Warby Parker as outperform Wolfe said in its initiation of Warby that it sees a “multi-year unit growth opportunity” for the eye wear company. “The $44B optical retail market is recession resistant and highly fragmented. We see a multi-year unit growth opportunity with upside from vision care offerings.” Jefferies downgrades Snap to hold from buy Jefferies said it’s taking a more cautious view on shares of Snap and said it sees a slower than expect recovery. “We are transferring lead coverage to James Heaney, downgrading both TTD and SNAP to Hold, keeping PUBM at Hold, and IAS at Buy. Our view is more cautious than the street with our lowered ests assuming an avg. 4% rev growth for FY23 (vs. Cons. avg. 14%) and a slower than expected recovery.” Read more about this call here. Morgan Stanley names Advanced Micro Devices a top 2023 pick Morgan Stanley named the semiconductor company a top pick and said it sees less near-term enthusiasm for the stock, but many other semi stocks “are up meaningfully during a period of negative earnings revisions.” “Shifting our Top Pick from LRCX to AMD. This is less about near term enthusiasm for AMD – which still has some risk from cloud capex cuts in 4q -than the fact that all of the stocks are up meaningfully during a period of negative earnings revisions.” Evercore ISI names Nvidia and Marvell as top picks in 2023 Evercore named several semi stocks as top picks, noting it has “higher conviction for soft-landing.” “We highlight NVDA , MRVL , ASML, ADI, WOLF and AVGO as our Top Picks in 2023.” JPMorgan adds Shoals and Array Technologies to the focus list JPMorgan added several clean tech company’s to the focus list and said they are top growth ideas for 2023. “Following several years of outperformance from residential solar, we believe 2023 sets up favorably for US utility-scale, which should rebound from disruption created in 2022 from geopolitical uncertainty. Our top picks are ARRY , SHLS, and SEDG.”
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