What has Wall Road been buzzing about this week? Listed below are the highest 5 Purchase calls and the highest 5 Promote calls made by Wall Road’s greatest analysts throughout the week of January 9-13.
High 5 Purchase calls:
Netflix (NFLX) – Jefferies upgrades the inventory to Purchase, raises goal to $385
On January 12, Jefferies analyst Andrew Uerkwitz upgraded Netflix to Purchase from Maintain with a worth goal of $385, up from $310. The analyst says that with a possible recession looming, he’s on the lookout for security and media names which have “draw back de-risked.” Promoting-based video on demand shall be gradual to kick in for Netflix, however when it does it ought to drive gross sales outperformance, Uerkwitz tells traders in a analysis observe. The “larger kicker” shall be 2024 working margin upside surprises on flattish content material amortization and higher income progress, the analyst provides.
Oracle (ORCL) – Mizuho begins with a Purchase as Piper Sandler upgrades shares to Chubby
On January 10, Mizuho analyst Siti Panigrahi initiated protection of Oracle with a Purchase ranking and $116 worth goal. Oracle’s “broad” portfolio of infrastructure and software merchandise has matured, prompting the corporate to transition to the cloud to reaccelerate its progress profile, Panigrahi tells traders in a analysis observe. The analyst believes traders could also be underestimating the corporate’s potential over the medium-term to generate “strong” gross sales and money move progress, and exceed its fiscal 2026 targets.
On January 9, Piper Sandler analyst Brent Bracelin additionally upgraded Oracle to Chubby from Impartial with a worth goal of $104, up from $85. The corporate’s “mannequin diversification narrative is simply starting” with solely 11% of its 430,000 buyer base adopting Oracle Cloud, Bracelin tells traders in a analysis observe. The analyst sees room for each earnings and a number of growth as Oracle’s acceleration to double-digit earnings progress materializes.
Uber (UBER) – Piper Sandler upgrades Uber to Chubby, lifts goal to $33
On January 9, Piper Sandler analyst Alexander Potter upgraded Uber Applied sciences to Chubby from Impartial with a worth goal of $33, up from $31. The analyst recommends pairing Uber in opposition to DoorDash, which he downgraded from Impartial to Underweight. Automobile costs are close to all-time highs, and a fast reversion to historic pricing appears unlikely, Potter tells traders in a analysis observe. In consequence, he thinks “cash-strapped” customers will more and more choose to hail rides as a substitute of attempting to interchange outdated automobiles.
In the meantime, Jefferies analyst John Colantuoni assumed protection of Uber with a Purchase ranking and $38 worth goal. Colantuoni estimates Uber’s core Rideshare/Restaurant Supply companies every function in $1T addressable markets, which suggests nearly 5% penetration and an extended runway for progress, and thinks Uber’s dominant scale and community impact help larger reinvestment into buyer expertise/adoption, which ought to spur frequency/stickiness and develop market share over time, the analyst tells traders in a analysis observe.
Zillow (Z) – Financial institution of America upgrades inventory to Purchase, raises goal to $42
On January 9, BofA analyst Curtis Nagle upgraded Zillow to Purchase from Underperform with a worth goal of $42, up from $22. Nagle believes the actual property market might trough in early 2023 although fundamentals nonetheless stay challenged and is extra assured that progress can return to double digits in 2024 on bettering affordability. Zillow’s initiatives, together with ShowTime, 3D digital excursions, and elevated deal with financing to determine excessive intent dwelling consumers may result in larger income and conversions, the analyst contends.
AT&T (T) – Wells Fargo upgrades inventory to Chubby, ups goal to $22
On January 10, Wells Fargo analyst Eric Luebchow upgraded AT&T to Chubby from Equal Weight with a worth goal of $22, up from $17. The analyst views the U.S. telecom sector as a comparatively defensive play for 2023, saying wi-fi subscriber progress ought to stay above historic ranges, fiber-to-the-home building ought to nonetheless develop and stuck wi-fi ought to proceed taking share. Nevertheless, he recommends traders be selective given the present inflationary backdrop. Luebchow named AT&T raised his high wi-fi decide for 2023 on upside potential to consensus estimates, its higher steadiness sheet and engaging valuation.
High 5 Promote calls:
Roku (ROKU) – Jefferies downgrades to Underperform, cuts goal to $30
On January 12, Jefferies analyst Andrew Uerkwitz downgraded Roku (ROKU) to Underperform from Maintain with a worth goal of $30, down from $45. A “considerably slower” digital promoting market will not be mirrored in near-term consensus expectations for Roku whereas the long-term trajectory of the enterprise “stays unclear,” Uerkwitz tells traders in a analysis observe. The analyst expects Netflix and Disney+ (DIS) to seize nearly all of incremental linked TV advert spend in 2023 and 2024. Excluding the 2 new entrants, the trade is rising low single digits, Uerkwitz provides.
DoorDash (DASH)– Piper downgrades to Underweight as Jefferies begins shares with an Underperform
On January 9, Piper Sandler analyst Alexander Potter downgraded DoorDash to Underweight from Impartial with a worth goal of $40, down from $227. The analyst recommends pairing an extended place in Uber in opposition to DoorDash. Automobile costs are close to all-time highs, and a fast reversion to historic pricing appears unlikely, Potter tells traders in a analysis observe. In consequence, he thinks “cash-strapped” customers will more and more choose to hail rides as a substitute of attempting to interchange outdated automobiles. Whereas a beneficiary of accelerating labor provide, DoorDash doesn’t profit from rising demand for ride-hailing, the analyst says. He thinks DoorDash “will face extra recessionary stress on income.”
In the meantime, Jefferies analyst John Colantuoni initiated protection of DoorDash with an Underperform ranking and $37 worth goal. Colantuoni estimates DoorDash’s market share in U.S. Restaurant Supply elevated from 18% in 2018 to 56% in 2022, however expects share features to gradual given previous features got here from gamers that at the moment are a lot smaller, the analyst tells traders in a analysis observe. He additionally expects the general class to expertise extra modest progress following a pull ahead in adoption throughout the pandemic and fewer contribution from extra meals inflation.
Salesforce (CRM) – Bernstein downgrades Salesforce to Underperform whereas Atlantic goes to Impartial
On January 11, Bernstein analyst Mark Moerdler downgraded Salesforce to Underperform from Market Carry out with a worth goal of $119, down from $134. The analyst notes that Salesforce has been a controversial title for the final 12 months as progress slowed and the corporate began to deal with margin. Administration guided to hit $50B in income and PF working margins of 25%-plus for 2026. However stress has elevated for bigger margin enhancements, whereas progress has continued to gradual and the corporate has missed expectations, Moerdler provides. Evaluating the valuation of Salesforce in opposition to friends the analyst finds that Salesforce is overpriced, because it has the same progress charge to friends however decrease margins and decrease high quality earnings. With much more ache forward for Salesforce and quite a few catalysts that will drive a decrease a number of, he drops his ranking to Underperform.
On January 13, Atlantic Equities analyst Peter Sazel downgraded Salesforce to Impartial from Chubby with a worth goal of $140, down from $200. The analyst cites execution issues, the corporate’s C-suite administration “exodus” and danger of slower than anticipated income progress for the downgrade. Current departures may begin hurting Salesforce’s capability to win new offers going ahead, Sazel tells traders in a analysis observe. As well as, the analyst believes elevated danger of a income slowdown can also be mirrored within the firm’s determination to not present fiscal 2024 income or EBIT margin steerage.
Coinbase (COIN) – BofA downgrades the inventory to Underperform on below-Road 2023 view
On January 11, BofA analyst Jason Kupferberg downgraded Coinbase to Underperform from Impartial with a worth goal of $35, down from $50, noting that his 2023 income estimates at the moment are “even additional under” the Road view after analyzing This autumn crypto transaction quantity knowledge. He thinks will probably be laborious for the shares to tolerate a big downward revision to consensus estimates given the unstable crypto atmosphere.
Paycom (PAYC) – MoffettNathanson begins protection with an Underperform, $310 worth goal
On January 9, MoffettNathanson analyst Jackson Ader initiated protection of Paycom with an Underperform ranking and $310 worth goal. On the Human Capital Administration, or HCM house broadly, Ader argues that energy in 2022 might “portend later cycle impression in 2023” after the group “held up remarkably effectively relative to the remainder of software program in 2022 from each a buying and selling and a basic perspective.” On particular names, Ader argues that “on the poles,” present multiples suggest “an excessive amount of optimism” for Paycom and “an excessive amount of ache” for Workday (WDAY), which he began with an Outperform ranking.
Key phrases: analyst, analyst calls, upgrades, downgrades, initiations, analysis, wall avenue
