Here are the biggest calls on Wall Street on Monday: Morgan Stanley upgrades East West Bancorp to overweight from equal weight Morgan Stanley said in its upgrade of the regional bank that it’s underappreciated. ‘Upgrading EWBC to Overweight given its underappreciated excess capital levels that provide both a cushion against weakening credit and the ability to generate above peer loan growth in a weak macro environment.” Bank of America adds Union Pacific and US Bancorp to the US1 Focus list Bank of America added both stocks to the firm’s top picks list. “We are adding US Bancorp (USB) and Union Pacific (UNP) to the US 1 List.” Mizuho upgrades General Motors to buy from hold Mizuho sees several positive catalysts ahead for GM , now that the UAW strike is in the rearview mirror. “The UAW strike is in the rearview mirror, production has resumed, and we see idiosyncratic catalysts.” UBS reiterates Apple as neutral UBS said its checks show that Apple’s iPhone sales in China remain “sluggish.” “Phone sell-through in Oct. returns to growth due to timing but China sluggish.” Deutsche Bank downgrades Anheuser Busch InBev to hold from buy Deutsche downgraded the stock, mainly on valuation. “We continue to see ABI’s broadly EM focused sales exposure as attractive combined with the company’s market leading market share positions. … .However, with the shares trading on a CY24 P/E of 17.3x and offering a FCF yield of 5.6% we see the shares as broadly fairly valued for now. We therefore downgrade to HOLD from BUY.” Deutsche Bank upgrades Hawaiian Airlines to buy from hold Deutsche upgraded the airline after Alaska announced it was acquiring Hawaiian over the weekend. “On the surface, the equity premium is significant, although Hawaiian’s equity value traded at a level that was roughly double the $1.0 billion consideration during the pre-pandemic period from 2016–2019.” Wells Fargo downgrades Lululemon to equal weight from overweight Wells said in its downgrade of the stock that it sees less balanced risk/reward. “Downgrading LULU to EW. While we tweak EPS higher, we maintain our $445 PT and are taking our chips off the table following a solid run YTD. We remove LULU from our Top Picks list and replace with NKE.” Bank of America reiterates Amazon as buy The bank said its 2024 online e-commerce survey shows Amazon is the top choice for consumers. ” Amazon remains, by far, the most popular eComm site; 64% of respondents search Amazon first when buying products (vs. Google at 14%) and, on a net basis, 45% of respondents indicate increasing usage in the next 6 months (up vs. 42% last year and vs. Walmart at 29%).” Morgan Stanley downgrades Sea Limited to equal weight from overweight Morgan Stanley downgraded the Singapore-based tech conglomerate until its business outlook is clearer. “[W]e think SE’s earnings predictability for the next 6-12 months is quite low. We lower our price target to US$47/share and move to EW till we get more clarity on the: 1) Competitive landscape dynamics in Indonesia, (2) stickiness of [gross merchandise value] once marketing spend tapers, and 3) unit economics of live-streaming in this region.” Roth MKM upgrades Fluence to buy from hold Roth upgraded the energy company after its recent earnings. “We are upgrading FLNC to Buy following the strong FQ4 beat and higher than- expected 2024 revenue guidance.” Evercore ISI downgrades Fisker to in line from outperform Evercore said it sees too much uncertainty at the electric vehicle company. “In addition to a general lack of execution or tangible evidence of increased execution, we see FSR’ s next 12 months as a highly precarious tightrope of execution, brand risk, capital raises & dilution.” Piper Sandler names Nvidia a top pick Piper said the stock’s valuation is particularly “compelling.” “We are making NVDA our top large-cap pick (previously AMD) for the following reasons. 1) Valuation is now substantially more compelling than AMD, 2) NVDA provides the full stack of compute that allows for strong efficiencies and significant competitive advantages at the system level.” Goldman Sachs upgrades Coca-Cola European Partners to buy from neutral Goldman upgraded the European Coke company, seeing a “favorable” risk/reward. “We upgrade CCEP to Buy and raise our price target to $70 (from $61). We see a favorable risk/reward for CCEP heading into year-end and beyond given a number of volume-related tailwinds – a rarity in the Staples universe as the wrap around pricing benefit fades and topline growth becomes harder to come by.” JPMorgan upgrades Carvana to neutral from underweight JPMorgan said the unknowns surrounding the stock are becoming better understood. “The known unknowns around the CVNA story are better appreciated by investors today in our view and it is possible CVNA can execute its way through this uncertain macro and used car industry phase in a way that limits downside to near- and medium-term estimates.” Wells Fargo upgrades CyberArk to overweight from equal weight Wells sees potential upside to earnings estimates for the cyber security company. “We are upgrading CYBR to OW, as we believe the company is capitalizing on recent breach activity and the changing competitive dynamics. Our $250 PT equates to 24% upside, though there is still room for the multiple (10x) and estimates to move higher.” Morgan Stanley upgrades Insulet to overweight from equal weight Morgan Stanley initiated the insulin pump therapy company and said it sees room for further gains. “GLP-1 concerns are disproportionate given Insulet’s Type 1 exposure, and we see minimal impact to near-term revenue growth.” Bank of America upgrades ONEOK to buy from neutral Bank of America said it’s bullish on the natgas company’s agreement to purchase Magellan Midstream. “We upgrade OKE to Buy from Neutral and raise our PO from $72 to $83. We think the market is underappreciating the synergies and FCF step-up from the merger with MMP.” Bank of America initiates Arrowhead Pharmaceuticals at buy Bank of America said in its initiation of the biotech company that it has a “compelling” platform. “We initiate coverage on Arrowhead Pharma (ARWR) with a Buy rating and a $29/shr PO based on our risk-adjusted” sum of the parts analysis. KeyBanc initiates Worthington Steel as overweight KeyBanc initiated research coverage of the steel maker and called it resilient. “We are initiating coverage of Worthington Steel, – a carve out of Worthington Industries, now Worthington Enterprises – a leading value-added carbon sheet steel processor and distributor for automotive, construction, electrical, and industrial applications, with an Overweight rating and $29 price target given a favorable entry point/valuation, reflecting > 30% upside.” Barclays upgrades 3M to equal weight from underweight Barclays said in its upgrade of 3M that it sees a revenue recovery. “We think the top line should be due for a recovery in 2024 after two weak years. Margin expansion could be above average due to the latest cost-cutting plan, and the evidence of greater cost control.” TD Cowen reiterates Coinbase as underperform TD Cowen is standing by its underperform rating on the crypto company, seeing limited visibility into its business outlook. “We estimate COIN’s November spot volume bounce will drive at most an incremental $122MM of EBITDA to our Q4 est. Given limited visibility on trading durability and possibility for lower take-rate mix shift we view the $11.5B of added market cap since 11/3 as an excessive capitalization off this move.” Oppenheimer reiterates Uber as outperform Oppenheimer raised its price target on the stock to $75 per share from $65 in anticipation of its entry into the S & P 500 index. “Following the inclusion, we expect UBER to lean into growth and share buybacks, which should increase investor sentiment for growth/return in 2024.” Truist upgrades CNX Resources to buy from hold Truist said in its upgrade of the natgas company that investors should buy the dip in CNX. “We expect investor sentiment to remain depressed over the next few months in the gas space, and anticipate the company’s strong hedging profile to insulate the name, while still providing investors exposure to longer-term gas asset upside.” KeyBanc downgraded Herc Holdings and United Rentals to sector weight from overweight KeyBanc downgraded the equipment rental companies, mainly because of their stock valuations. “We are downgrading URI and HRI to Sector Weight from Overweight as valuation captures moderating starts within our Breaking Ground dataset, plateauing pricing in our proprietary spot rental rate scrapes, and downward trends in other forward-looking nonresidential indicators.” Wells Fargo reiterates Nike as overweight Wells says Nike is a top defensive pick for 2024. “We simply believe the recovery characteristics and self-help story now beginning at NKE make for a more compelling long idea into 2024.” Morgan Stanley reiterates Palo Alto as overweight Morgan Stanley said Palo Alto shares have the poten tial to rise further. “We see further upside from here as growing AI tailwinds and multiple product cycles drive re-acceleration in FY25.”
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