Here are Tuesday’s biggest calls on Wall Street: Morgan Stanley reiterates Apple as overweight Morgan Stanley said it’s standing by its overweight rating on Apple after reviewing the company’s recent 10-Q quarterly filing report. “Balance sheet inventory increase reflects component pre-purchases, which we believe can help support stronger gross margins over the next few quarters.” Atlantic Equities downgrades Shopify to neutral from overweight Atlantic Equities downgraded the stock mainly on valuation. “Although we see upside to Street estimates and continue to view Shopify as a best-in-class product executor with strong long-term growth prospects, the stock’s 22x gross profit multiple is back to pre-pandemic levels, despite us modelling mid-20s gross profit growth in the near-term, half the 2019 level.” JPMorgan initiates Alkami as overweight JPMorgan said the regional banking software company has strong fundamentals. ” Alkami provides white label banking solutions to US-based credit unions and small to mid-size regional banks, allowing them to compete with more technologically advanced and well-resourced competitors.” Read more about this call here . Bernstein reiterates Alphabet as outperform Bernstei said it’s bullish heading into the internet giant’s developer conference on Wednesday. “This year, Google has a lot more on the line than whether the new Pixel smartphone is foldable or not. With a PR war going on around Generative AI, it’s Google’s turn to show the world, and more importantly the developers, what they’ve been working on.” Bernstein reiterates Microsoft as outperform Bernstein said AI is going “everywhere and in everything” that Microsoft does. “AI at Microsoft is far more than Bing Chat — it is becoming core technology everywhere and in everything Microsoft does.” Wells Fargo reiterates S & P Global as overweight Wells said the financial information and analytics company has “robust capital return capabilities.” ” SPGI’s post-IHS merger profile provides balanced end mkt exposure (inc some torque to eventual issuance rebound), strong synergy opportunities, robust capital return capabilities and potential further portfolio options.” Redburn reiterates Spotify as buy Redburn said Spotify is a key AI beneficiary. “Furthermore, we see Spotify as a winner of the AI disruption and are encouraged by the feedback on negotiations with the labels. We update our forecasts and raise our fair value to a range of $150-185. We remain Buyers.” Guggenheim upgrades Shoals to buy from neutral Guggenheim said in its upgrade of the solar company that the outlook looks “conservative.” “Key Message: We are upgrading SHLS from Neutral to Buy and establishing a price target of $30. The company’s outlook for the remainder of the year looks conservative to us.” Read more about this call here. Jefferies upgrades Ferguson to buy from hold Jefferies said in its upgrade of the building and residential construction products company that it’s poised for a re-rate. “We see the discount FERG trades to its peers narrowing, catalyzed by a US index inclusion & increased US based investor interest & coverage.” Read more about this call here. BMO downgrades Skyworks to market perform from outperform BMO said it sees too much uncertainty for the chipmaker. “As a rule of thumb, we are loath to changing ratings after the fact. The exception to that is when we either cannot add it all up, if we see a structural issue emerging, or if we see a multi-quarter headwind. In this case we see some combination of the above. Thus, we would rather stay on the sidelines and are lowering our rating on shares of SWKS to a Market Perform from an Outperform.” Read more about this call here. Bank of America upgrades Trex to buy from neutral Bank of America said the wood decking and railing materials company is resilient. “Our upgrade reflects Trex’s: 1) resilient sell-through trends, 2) rapid gross margin rebound, and 3) long-term material conversion opportunity. Following a challenging 2022 for composite decking, we believe the industry is poised to recover in 2023.” Goldman Sachs reiterates PayPal as buy Goldman said it sees further earnings upside after the company’s earnings report on Monday. ” PayPal continues to demonstrate strong opex management with opex to decline 10% yoy in 2023 and decline again in 2024, though this has been at least partly offset by the transition toward lower margin unbranded volumes.” Raymond James reiterates Palantir as strong buy Raymond James said it’s standing by its strong buy rating on shares of the AI beneficiary. “Enthusiasm around PLTR’ s new AI Platform (AIP) which we view as a solution that commercializes large language models and leverages the underlying tech to provide transformational value to customers.” Evercore ISI upgrades Ingersoll Rand to outperform from in line Evercore called the air and gas manufacturer a “fine” company. “Long IR (upgrade to Outperform/Buy)/Short ITW: In this ‘high rent district’ of our coverage area (high valuation multiple), these are two fine companies. However, we can get faster, maybe even more reliable, sales and earnings growth at IR less expensively than ITW.” UBS reiterates Walmart as buy UBS said it’s standing by its buy rating on the stock heading into earnings May 18. ” WMT likely maintained its momentum and gained further share in 1Q.” Wells Fargo reiterates Home Depot and Lowe’s as overweight Wells said it’s standing by shares of the home improvement retailers but is concerned about a negative risk/reward heading into earnings later this month. “We see neutral to negative risk/reward into HD / LOW EPS. Sentiment is weak, checks are squishy, & trends likely slowed via uncooperative weather & muted demand. Credit Suisse downgrades PayPal to neutral from outperform Credit Suisse said it’s too “challenging” to recommend shares right now. “Given the prospects for continued transaction margin pressures throughout 2023 (partly mix driven), PayPal’s vertical skew (discretionary) in an uncertain macro backdrop, a pending management transition, and increasing competitive pressures (longer term), we find it challenging to recommend the shares at this time. Piper Sandler reiterates JPMorgan, Fifth Third and US Bancorp as overweight Piper said there are several “ways to play” the chaotic banking environment. “While we suspect this could be a long slog for the group, we still think there are opportunities in high-quality names – some at steep discounts. We discuss here three of our favorite large-cap bank names through which to navigate the current uncertainty. We reiterate our OW ratings on FITB, JPM, and USB. “
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