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 Dec. 2-6, 2024. First, here are the top 5 buy calls of the week.
1. Tesla Upgraded to Buy at Roth MKM with “World Changed” After Trump Election
Roth MKM upgraded Tesla (TSLA) to Buy from Neutral with a price target of $380, up from $85, arguing that Musk’s “authentic support for Trump likely doubled Tesla’s pool of enthusiasts and lifted credibility for a demand inflection.”The firm, which says “the world has changed,” says Tesla’s main AI mission is a smarter copilot that “aims to solve orders of magnitude more chaos than other products” and contends that CyberTaxi now faces an accommodative regulatory environment, adding that one can now “daydream about a beautiful red wave of EVs sweeping across the US, with a shiny gold ‘T’ on every car.”
2. Deutsche Upgrades CVS to Buy with Earnings, Valuation at Trough
Deutsche Bank upgraded CVS Health (CVS) to Buy from Hold with an unchanged price target of $66. The firm believes both the company’s earnings and multiple are now likely near trough levels. CVS has taken steps to turn the company towards improving profitability, Deutsche tells investors in a research note. Following an analysis of the managed care segment, the firm thinks an earnings recovery is both achievable and will outpace Street expectations.
3. Autodesk Initiated With a Buy at UBS
UBS initiated coverage of Autodesk (ADSK) with a Buy rating and a $350 price target. The firm views Autodesk as attractive given its “breadth of strong growth levers,” including recovery tailwinds, cross-sell, and share gains. It believes this can support upside to 2025 Street revenue growth estimates. UBS sees a 2025 recovery in the cyclical-sensitivity verticals of construction, design, and engineering.
4. Okta Upgraded to Overweight at Morgan Stanley
Morgan Stanley upgraded Okta (OKTA) to Overweight from Equal Weight with a price target of $97, up from $92. The firm says that while it is positive on long-term tailwinds in security, it is being more selective into 2025 given a “stable but still tough” spending environment, less favorable US fiscal backdrop, and valuation premium versus broader technology.It upgrades Okta believing the demand environment is stabilizing, competitive headwinds appear to be easing, and newer product cycles are beginning to take hold.
5. Dollar General Double Upgraded to Buy at BofA on Signs of Strategy Working
BofA double upgraded Dollar General (DG) to Buy from Underperform with an unchanged price target of $95, citing multiple early signs that the company’s “Back-to-Basics” strategy is working. These include significantly improved inventory positioning; in-stock levels up a strong 180 basis points from last year, supporting sales upside; in-store customer satisfaction surveys up 900 basis points since Q1, which implies customers are responding to store execution; and merchandising initiatives outperforming.Next, here are the top 5 sell calls of the week.
1. Glaukos Downgraded to Underweight at Morgan Stanley
Morgan Stanley downgraded Glaukos (GKOS) to Underweight from Equal Weight with a price target of $120. While the firm thinks iDose is “a great product with a long-term trajectory,” it is struggling to see relative upside from here versus other stocks based on the recent valuation.
2. Upstart Downgraded to Underweight at JPMorgan
JPMorgan downgraded Upstart (UPST) to Underweight from Neutral with a price target of $57, up from $45. The firm expects the third-party funding environment to improve in 2025, but says this appears to be more than priced in at recent share levels, with Upstart trading 9-times forward sales. It notes the company was doing $13 billion in annualized origination volume, or 8-times its current run rate, the last time the stock traded in the high $70 range.
3. Citi Downgrades Nu Holdings to Sell, Says Take Profits Here
Citi downgraded Nu Holdings (NU) to Sell from Neutral with a price target of $11, down from $14.60. The company has shown an “impressive capacity” to expand its operations in Brazil rapidly, while maintaining even faster net income growth, the firm tells investors in a research note.However, Citi sees the stock’s strong year-to-date performance as a good opportunity to take profits. Nu’s alternative revenue sources, like payroll loans in Brazil, Mexico, and Colombia, could take longer than expected to offset the slowdown in credit cards and personal loans in Brazil, contends Citi.
4. Roper Technologies Downgraded to Underweight from Overweight at Barclays
Barclays double downgraded Roper Technologies (ROP) to Underweight from Overweight with a price target of $569, down from $625. Amid a “slightly brighter demand outlook” for short cycle industrial goods, the firm adjusted ratings in the US multi-industry group as part of a 2025 outlook.Short cycle industrial goods are likely to be the key area of acceleration in 2025, Barclays tells investors in a research note. The firm says valuations are now at or approaching all-time highs for most stocks, “despite/because of all-time high earnings.”
5. Applied Materials Downgraded to Underweight at Morgan Stanley
Morgan Stanley downgraded Applied Materials (AMAT) to Underweight from Equal Weight with a price target of $164, down from $179. Applied Materials’ leading market share in DRAM and trailing-edge logic led to the company seeing strong growth in 2023 and 2024, but a weaker operating environment for both end-markets in the first half of the year should lead to a correction, the firm tells investors in a research note.More By This Author:Here’s What Wall Street Experts Are Saying About Salesforce Ahead Of Earnings Pony AI Shares Climb 19% After IPOWall Street’s Top 10 Stock Calls This Week – Saturday, Nov. 30
