Here are Friday’s biggest calls on Wall Street: JPMorgan reiterates Amazon as overweight JPMorgan said the e-commerce giant remains a top idea. “AMZN remains our Best Idea & we continue to expect AWS acceleration in 2H23, Retail growth uptick, healthy NA margin expansion, & Y/Y decline in total capex, all of which should drive significant FCF inflection this year.” Jefferies reiterates Nvidia as buy Jefferies said Nvidia shares are best positioned for more upside. “Going into earnings season, we think NVDA and AMAT have the best chance to post upside surprises.” Goldman Sachs reiterates Disney as buy Goldman Sachs said it’s standing by its buy rating on Disney shares but lowered its price target to $125 per share from $128. “We maintain our Buy rating but lower our 12-month price target for DIS heading into the company’s F4Q23 earnings report.” Bank of America reiterates Meta as buy Bank of America said it’s bullish heading into earnings next week. “With street cautious on expense/capex guide, key driver for stock will be 4Q revenue guidance, and we expect a strong 4Q vs sector as Meta can benefit from: 1) eCommerce ad acceleration (easy comps & China driven ad competition), 2) Ramping Reels and messaging monetization.” UBS upgrades Merck to buy from neutral UBS said Merck has an “undemanding” valuation and robust pipeline. “We assume coverage of Merck with a Buy rating and $122 PT.” Read more about this call here. Stephens names Simple Foods a best idea Stephens said the food company is attractively positioned and won’t see much effect from weight loss drugs. “We are naming Simply Good Foods (SMPL) our Best Idea. We believe SMPL is attractively positioned at the intersection of major consumer trends such as increased focus on Better-For-You products and increased snacking occasions.” UBS upgrades Block to buy from neutral After a change in analyst coverage, UBS upgraded Block and says it’s well-positioned. “We continue to believe that there are two dominant business models that could ‘win’ over the coming decade within payments acceptance — either 1) be the software platform (monetize via SaaS, payments, embedded finance and commerce-enablement services); or 2) be a preferred partner in embedding and powering additional ecosystem and monetization-enhancing services.” Deutsche Bank upgrades Union Pacific to buy from hold Deutsche Bank said it sees “meaningful” upside potential for the freight train operator. “We said four days ago that ‘if U.S. Rail volumes remain encouraging, we see meaningful outperformance potential relative to both the broader market and Canadian Rails.'” UBS reiterates Ralph Lauren as buy UBS said the stock is best positioned for artificial intelligence. “However, in the medium-term, we think companies like Ralph Lauren are best positioned to win the race to fully integrate Gen AI into their business models.” UBS reiterates McDonald’s as buy UBS said the stock remains attractively valued. “We believe MCD remains well positioned for further market share gains given continued global sales momentum, core competitive advantages, and trade down benefits.” Bank of America reiterates IBM as buy Bank of America said it’s standing by its buy rating heading into earnings next week. “Reiterate Buy on continued turnaround at IBM (rev growth and FCF improvement), defensive portfolio (which should help the company outperform in a recession), and attractive dividend yield.” Citi upgrades Cognizant to buy from neutral Citi said the technology solutions company is a “self-help” story. “Our assessment is that Cognizant has made considerable progress on multiple fronts. Its reputation with clients as well as employees has improved since the CEO & Board-level changes in early 2023, which is leading investors to show steady, incremental interest in this idiosyncratic, self-help story.” Read more about this call here . Goldman Sachs adds Taiwan Semiconductor to the conviction buy list Goldman Sachs added the semiconductor company to its conviction buy list after its robust earnings report Thursday. ” TSMC hosted its 3Q23 earnings call on 19 October. Management delivered a positive message citing an incoming end of the inventory correction with early signs of demand stabilization for PC and smartphones.” Deutsche Bank downgrades SolarEdge, Sunrun and Sunnova to hold from buy Deutsche Bank said in its downgrade of SolarEdge, Sunrun and Sunnova that it sees too many headwinds. “Cutting numbers into 2H and 2024 on sluggish demand and lingering environmental headwinds.” Read more about this call here . Deutsche Bank reiterates Microsoft as buy Deutsche Bank said it’s standing by its buy rating on Microsoft heading into earnings next week. “With recent cost actions providing leverage, we model another quarter of healthy double-digit EPS growth (+13% y/y) at $2.65.” Redburn Atlantic Equities downgrades Yum Brands to neutral from buy Redburn said higher rates is a negative for Yum shares. “Higher rates mean the combination of operating growth with share repurchases can no longer work, and leverage is now very high. We move below consensus.” Citi initiates Mattel as buy Citi said in its initiation of the toy company that it’s well-positioned for upside. “The missing narrative ingredient is the reignition of the top line, and while industry holiday demand is a concern, MAT may see a spark through the combination of the return of Disney Princess, strong vehicle momentum, and an added lift from the Barbie movie.” Raymond James upgrades Crocs to outperform from market perform Raymond James said in its upgrade of Crocs that it sees an attractive risk/reward. “We believe the stock is oversold and risk/reward is now favorable given a highly discounted P/E of ~6.5x (5-year average 16x) and EV/EBITDA of ~6x.” Bank of America downgrades SolarEdge to underperform from neutral Bank of America downgraded the stock after its negative pre-announcement Thursday. “Aftermarket SolarEdge (SEDG) pre-announced 3Q results that were headlined by a 20% revenue miss and 30% reduction in gross profit. Management attributes the miss to unexpected cancellations and pushouts of existing backlog from European distributors that seemed to occur suddenly in late summer as installation rates disappointed vs seasonal norms.”
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