Image Source: PixabayWhat has Wall Street been buzzing about this week? Here are the top 5 buy calls and the top 5 sell calls made by Wall Street’s best analysts during the trading week of Oct. 21-25, 2024. First, here are the top 5 buy calls of the week.
1. Walmart Initiated With an Outperform at Bernstein
Bernstein initiated coverage of Walmart (WMT) with an Outperform rating and a $95 price target. The firm started seven companies in the U.S. broadlines and hardlines retail industry, with Walmart its top pick. Bernstein expects Walmart to leverage its scale advantage to offer “great value to consumers in times of uncertainty and to gain share in an omni-channel market.”Walmart will be one of the few retailers that can grow e-commerce profitably, the firm tells investors in a research note. Bernstein is also positive on Costco (COST), saying the company’s international growth potential is underappreciated.The firm also put an Outperform rating on Dollar General (DG), its “most controversial call,” as it sees significant store growth and gross margin expansion potential over the longer-term. Bernstein prefers Lowe’s (LOW) over Home Depot (HD), seeing growth opportunities in the former’s Pro segment. Additionally, Target (TGT) and Dollar Tree (DLTR) were given Market Perform ratings.
2. Uber Upgraded to Buy at Erste Group on “Super App” Potential
Erste Group upgraded Uber (UBER) to Buy from Hold. Uber should continue to significantly increase revenue, operating income, and net profit in the coming quarters, notes the firm, which also views the potential acquisition of Expedia (EXPE), as raised in media reports as a possibility, as a positive.Expedia has a low valuation and there are high synergy effects with the 155 million monthly active Uber users, contends Erste, which thinks Uber could thus continue to build a “super app” like WeChat in China
3. Etsy Reinstated With a Buy at Needham
Needham reinstated coverage of Etsy (ETSY) with a Buy rating and a $60 price target. While Etsy has not been able to avoid the broader macro drag impacting consumer spending on goods, its investments in search and discovery set the company up well to grow off its consumer wallet share gains since the pandemic, the firm tells investors in a research note. Needham thinks Etsy should be able to leverage machine learning and its scale to improve its marketplace.
4. eBay Reinstated With a Buy at Needham
Needham reinstated coverage of eBay (EBAY) with a Buy rating and a $72 price target. eBay is already “best in-class” at driving frequency among its “enthusiast” buyer base, the firm tells investors in a research note. Needham sees the potential for the company to maintain leadership positions through leveraging machine learning to improve search and discovery, which it says is still a major opportunity.eBay’s focus on non-new in-season items is a “thread that connects seemingly disparate items together and allows the company to cross-sell and increase frequency and importantly differentiates the marketplace” from Amazon and other competitors, contends the firm.
5. Snap Upgraded to Outperform at JMP Securities
JMP Securities upgraded Snap (SNAP) to Outperform from Market Perform with a $17 price target. With Snap set to roll out Simple Snapchat and launch Sponsored Snaps, it will see an “inflection in impression growth,” the firm tells investors in a research note.JMP believes the company can grow U.S. and North American engagement and drive greater advertising load with its new ad products. Additionally, channel checks with larger performance advertisers also are coming back favorably as Snap’s direct response product improvements are gaining traction, adds the firm.Next, here are the top 5 sell calls of the week.
1. Apple Downgraded to Underweight at KeyBanc
KeyBanc downgraded Apple (AAPL) to Underweight from Sector Weight with a $200 price target. The firm’s consumer survey “disproves one major bull case” that the iPhone SE is not purely additive to iPhone sales. In addition, the firm cites data points surrounding U.S. iPhone upgrades for the downgrade. They were 3% in Q3, down 9% year-over-year for Verizon, T-Mobile, and AT&T, the firm tells investors in a research note.Expectations call for Apple’s highest growth in three years and a major inflection in all geographies and products, which has rarely occurred throughout its history, contends KeyBanc. As such, the firm feels Apple shares are expensive relative to its history and peers.
2. UPS Downgraded to Underweight from Equal Weight at Barclays
Barclays downgraded UPS (UPS) to Underweight from Equal Weight with an unchanged price target of $120. The company’s near-term earnings could be pressured by a “still weak” parcel demand backdrop, but long-term pressures from Amazon (AMZN), non-union FedEx (FDX) competition, and limited dividend growth “paint a relatively tough outlook” for UPS shares, the firm tells investors in a research note. Baird cites the company’s long-term challenges for the downgrade to Underweight.
3. Enphase Energy Downgraded “Back” to Sell at Guggenheim after Q3 Report
Guggenheim downgraded Enphase Energy (ENPH) “back” to Sell from Neutral with a $73 price target following the release of the company’s Q3 report. Enphase’s Q3 results and outlook underscore the company’s competitive strength in the U.S. market, but also its “significant” challenges in Europe, the firm tells investors.While stating that it is true that Tesla (TSLA) poses a growing threat for the storage-attached segment of Enphase’s business, and this is already showing up in results, Guggenheim argues that “growing disarray” at SolarEdge (SEDG) and a lack of progress from aspiring entrants like Generac (GNRC) leaves Enphase “plenty of room to operate” in the U.S.
4. Hershey Initiated With a Sell at Redburn Atlantic
Redburn Atlantic initiated coverage of Hershey (HSY) with a Sell rating and a price target of $165. The firm says its analysis highlights “multiple challenges” for Hershey, including flat chocolate consumption, rising health concerns, and intensified competition. It models 1.4% organic sales growth in the long-term, which is below consensus.The stock’s valuation “is still too rich” for a company that offers organic sales growth that is below the staples sector average over the long-term, with increased near-term risk due to pricing needed to offset cocoa inflation, along with sector-leading margins that have little room to expand, Redburn tells investors in a research note.
5. Canadian Solar Downgraded to Sell at Citi
Citi downgraded Canadian Solar (CSIQ) to Sell from Neutral with a price target of $11, down from $19, ahead of the Q3 results and U.S. elections. Canadian Solar will face a different set of challenges under either administration, the firm tells investors in a research note.Citi says higher domestic tariffs, potential strain on liquidity from capex, lower volumes, and lower storage margins “pose downside from current levels.” A Republican win would likely increase the risk of more tariffs, while a Democratic win would likely raise capex, contends the firm.More By This Author:Here’s What Wall St. Experts Are Saying About Tesla Ahead Of EarningsHere’s What Wall Street Is Saying About IBM Ahead Of EarningsHere’s What Wall St. Experts Are Saying About These Automakers Ahead Of Earnings
