Here are the biggest calls on Wall Street on Thursday: Wells Fargo upgrades Albemarle to overweight from equal weight Wells said in its upgrade of the specialty chemicals manufacturing company that it sees “a strong fundamental picture for the lithium industry unfolding.” “Near term, we are raising our 2022 and 2023 outlook for ALB on higher pricing for lithium as the company and competitors have shifted contracts to more variable pricing to take better advantage of tight supply-demand conditions.” Morgan Stanley reiterates Rivian as overweight Morgan Stanley kept its overweight rating on shares Rivian after the electric vehicle company’s earnings report on Wednesday and says it likes Rivian’s transparency. “1Q results were mostly in line in terms of deliveries and cash consumption with continued growth in reservations (demand isn’t the issue here). We believe the arbitrator and somewhat ‘binary’ narrative around the company’s ability to control costs and cash burn edged toward the more transparent side, which is important.” Wells Fargo downgrades Ford to underweight from overweight Wells said in its double downgrade of the automaker that it’s concerned about profitability. “Therefore, we are concerned 2022 could be the peak, as Ford will be forced to absorb BEV (battery electric vehicle) to meet high 2026 US regulatory hurdles. … We are downgrading Ford from OW to UW & lower our price target from $24 to $12.” Read more about this call here. Wells Fargo downgrades General Motors to underweight from overweight Wells said in its double downgrade of the automaker that it sees inflationary costs and headwinds from price normalization. “Therefore, we are concerned that 2022 could be peak as GM will be forced to absorb BEV losses to meet high 2026 US regulatory hurdles. … We are downgrading GM from Overweight to Underweight and lowering our price target from $74 to $33.” Read more about this call here . JPMorgan upgrades Valvoline to overweight from neutral JPMorgan said in its upgrade of the distributor and manufacturer of automotive oil and lubricants that Valvoline stock is now attractively valued. “We believe that Global business is worth somewhere between 7x and 9x EBITDA and the Retail business is worth between 12x and 15x our estimated EBITDA for 2023. This offers a range of values between ~$31 and ~$41 per share. Our year ahead price target is a midpoint at $36.” Cowen upgrades Warner Bros. Discovery to outperform from market perform Cowen said in it upgrade of the media company that it has an “attractive” valuation. “We are upgrading WBD to Outperform and update our PT to $24. While we are still on the highly competitive streaming space, we think management’s approach to not trying to ‘win’ the DTC spending war is a more sustainable strategy than we see from some peers.” Goldman Sachs initiates DigitalOcean as buy Goldman said in its initiation note of the cloud infrastructure company that it’s a “clear leader.” “We initiate coverage on DigitalOcean with a buy rating and 59% upside to our 12-month price target of $49. We view DigitalOcean as a clear leader in the cloud infrastructure market for SMBs (small midsize businesses) and individual developers.” KBW upgrades Charles Schwab to outperform from market perform KBW said in its upgrade of the financial services company that investors should buy the dip. “Upgrading to OP from MP after the Significant Pullback in Shares. SCHW’ s stock is down -23% YTD despite 2023 consensus EPS up +16% YTD.” Barclays downgrades Beyond Meat to equal weight from overweight Barclays downgraded the stock after its disappointing earnings report on Wednesday and says margins remain below historic levels. “Given limited short-term visibility, mounting cost pressure and high cash burn, we downgrade BYND to EW and lower our price target to $25. 1Q results were disappointing and 2Q guidance was less upbeat than our previous estimates.” Read more about this call here . Piper Sandler downgrades Zoom to neutral from overweight Piper said in a note on Thursday that it sees limited upside in Zoom right now. “With GARP names historically trading 15-20x FCF, we see limited risk-reward at these levels, and even if growth names return to market favor, we see stronger upside in other names.” Read more about this call here . Goldman Sachs kepts Disney as buy Goldman its buy rating on shares of the entertainment giant after its earnings report on Wednesday and says it’s particularly bullish on Disney +. “We continue to expect Disney+ net adds subscriber momentum to improve in F2H22 vs. F1H22 driven by several new market launches (>50 in F3Q) and a ramp in both the pace and breadth of new content by F4Q.” Evercore ISI adds a tactical outperform on Costco Evercore added a tactical outperform call on shares of Costco ahead of earnings later this month and says it sees “double-digit upside.” “We are initiating a Positive Tactical Trading Call (TAP) on COST – time to play some catch up. We see more than double-digit upside for COST into earnings on 5/26, with our Base Case increased from $590 to $600 last week The upcoming F3Q results (Feb.-early May) is the outperformance catalyst.” Wells Fargo reiterates Tesla’s weight as equal Wells Fargo lowered its price target on shares of Tesla to $900 per share from $960 and says inflation will eventually catch up to margins. “Currently, TSLA has been passing along price increases before the impact of the raw material increase. This has been supportive of margins. However, once contracts get reset at spot or close to spot, the overall inflation will eventually catch up with margins.” Wells Fargo upgrades ON Semiconductor to overweight from equal weight Wells said in its upgrade of the semiconductor supplier that it has an attractive valuation and investors should buy the dip. “The key question that investors may ask is — Why own ON shares now? We answer the question with the following: 1) shares have pulled back & valuation is more attractive; 2) ON is focusing on ramping their automotive & industrial rev. ( both margin accretive long term).” Citi adds Wolfspeed to the focus list Citi added the semiconductor and radio frequency company to its focus list and says the stock is a solid ESG play. ” Wolfspeed’s strong exposure to power supply for electric vehicles, charging stations and general industrial power conversion makes it a highly attractive ESG exposure.” Credit Suisse upgrades EVgo to outperform from neutral Credit Suisse said in its upgrade of the battery-charging company that it likes the stock’s valuation and growth momentum. ” EVgo missed Q1 CS/cons. revenue expectations due to lower throughput, attributable to seasonality and the omicron surge., management repeatedd 2022 guidance, which implies significant momentum through the remainder of 2022.” Wolfe downgrades American Express to peer performance from outperform Wolfe downgraded several credit card payment companies on Thursday and says it’s concerned about a recession. “While we remain cautious on the low-end consumer we now believe Credit Card Issuers with greater exposure to prime and super-prime credits are also likely to come under further pressure amid the growing probability of recession and downgrade the group to market underweight (from Market Weight).AXP and DFS go to Peer Perform (from Outperform), while COF and SYF go to Underperform (from Peer Perform). BFH stays at Peer Perform.” Read more about this call here.
Tesla Inc CEO Elon Musk attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China August 29, 2019.
Aly Song | Reuters
Here are the biggest calls on Wall Street on Thursday: