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 week of Nov. 4-8, 2024. First, here are the top 5 buy calls of the week.
1. Gordon Haskett Sees “Return to Its Roots,” Upgrades Five Below to Buy
Gordon Haskett upgraded Five Below (FIVE) to Buy from Hold with a price target of $120. Looking back over the past few years, it is “clear to us” that Five Below got complacent and became too preoccupied with its “triple-double” long-term algorithm, its virtual management team structure backfired, and its move to higher price points led to less discipline, the firm tells investors.However, with the return of co-founder Tom Vellios and COO Ken Bull acting as interim CEO, Gordon Haskett expects to see Five return to its roots with a heighted focus on offering trend-right products at a compelling value in a fun store experience. In the near-term, the firm’s data checks show trends seem to have bottomed and “are even showing signs of some modest improvement.”
2. eBay Upgraded to Outperform at Bernstein
Bernstein upgraded eBay (EBAY) to Outperform from Market Perform with an unchanged price target of $70. The firm believes the recent pullback in the shares offers a better entry point.eBay has re-focused on the categories and use cases that best appeal to its core audience, and recent product improvements are allowing the marketplace to return to modest gross merchandise growth, which offers some upside to Street numbers, the firm tells investors in a research note. Bernstein believes this can support the multiple as earnings compounds along with “healthy” buybacks.
3. Roblox Upgraded to Overweight at Morgan Stanley
Morgan Stanley upgraded Roblox (RBLX) to Overweight from Equal Weight with a price target of $65, up from $38. The company is proving that its user-generated content platform can drive accelerating share gains, as it reaches larger and more diverse audiences across more platforms, the firm tells investors in a research note.Morgan Stanley says Roblox’s micro milestones leave it confident in the company’s ability to execute from here and exceed expectations. The company’s success reaching a broader audience and scaling on new platforms suggests its “opportunity is only growing,” contends the firm.
4. Snowflake Upgraded to Buy at Monness Crespi After 73% Pullback from Peak
Monness Crespi upgraded Snowflake (SNOW) to Buy from Neutral with a price target of $140 ahead of the company’s Q3 report due on Nov. 20. Following a 41% year-to-date decline and a 73% fall from the stock’s peak in late 2020, valuation has “become more interesting to us,” the firm tells investors. Snowflake has accelerated its pace of innovation this year, and Monness believes this ramp will begin to bear fruit over the next 12-18 months.
5. Peloton Upgraded to Buy from Underperform at BofA
BofA upgraded Peloton (PTON) to Buy from Underperform with a price target of $9, up from $3.75. The firm cites higher estimates after fiscal Q1 “surprised” with much higher-than-expected EBITDA, and FY25 guidance was raised to $240-$290 million versus the $232 million Street view. The firm believes Peloton can exceed $300 million in EBITDA this year and sees $400 million-plus as possible over the next few years.Next, here are the top 5 sell calls of the week.
1. Five Below Downgraded to Underperform at BofA with Trump Tariffs “Looming”
BofA downgraded Five Below to Underperform from Neutral with a price target of $75, down from $98, as the firm does not see a clear path to a turnaround in comparable store sales growth and expects continued margin deleverage on lower sales and incremental tariff costs.The company’s outsized sourcing exposure to China presents a risk given the strong likelihood of significant China tariffs coming into effect under a Trump administration, says BofA, which does not think Five has the pricing power to mitigate hefty tariffs as the value proposition is not resonating with consumers. The company is already in the process of reprioritizing lower price point items, adds the firm, which lowered its FY25 EPS estimate by 12% to $4.43.
2. JPMorgan Downgraded to Underperform at Baird
Baird downgraded JPMorgan (JPM) to Underperform from Neutral with an unchanged price target of $200. The firm urges investors to take profits in JPMorgan shares here, saying current prices offer a poor risk/reward. Baird sees limited upside in the stock. The firm understands the optimism market participants have around a “more benign” regulatory environment, along with a more pro-growth macroeconomic agenda under President Trump.At the same time, it finds that JPMorgan’s expectations “are quite high,” with the stock trading close or at all-time highs. “We know we are fighting the tape here, but believe it makes sense to sell the stock here given what we see as limited upside,” Baird tells investors in a research note.
3. Lemonade Downgraded to Underperform on Valuation at Keefe Bruyette
Keefe Bruyette downgraded Lemonade (LMND) to Underperform from Market Perform with a price target of $21, up from $18. The firm cites a mix of anticipating 2025 earnings guidance lower than expectations, the company’s “slow progress” on the cross-sale thesis, and valuation for the downgrade. The shares are up 56% since earnings last week, despite forward estimates remaining relatively unchanged, Keefe tells investors in a research note.
4. Sunrun Downgraded to Sell from Hold at GLJ Research
GLJ Research downgraded Sunrun (RUN) to Sell from Hold with a $7.78 price target. The firm cites Donald Trump’s Presidential victory for the downgrade. A Trump Administration “poses an existential threat” to Sunrun’s ability to stay solvent, the firm tells investors in a research note. GLJ believes the company’s ability to “overclaim” tax credits appears at significant risk in Trump’s pending administration.
5. Barclays Downgrades Coty to Underweight after Negative Sales Revision
Barclays downgraded Coty (COTY) to Underweight from Equal Weight with a price target of $7, down from $8. The firm is concerned Coty’s negative sales revision this quarter may not be its last and that the company is “pushing too hard to achieve its bottom line targets.”Coty effectively lowered its medium-term algorithm last night, but notably, this significant change was not detailed in the press release, Barclays tells investors in a research note. The firm says that “dramatic” cost cutting needed to protect EBITDA and yet another adjustment to the operating plan, it sees little reason to remain Equal Weight on the shares.More By This Author:Here’s What Wall Street Is Saying About Qualcomm Ahead Of EarningsWhat You Missed On Wall Street This Past FridayHere’s What Wall Street Is Saying About Amazon Ahead Of Earnings
