Here are Monday’s biggest calls on Wall Street: Wells Fargo reiterates Meta as overweight Wells lowered its price target on Meta to $372 per share from $389 and said it’s standing by its overweight rating on the stock ahead of earnings later this month. “Maintain OW rating, reduce PT to $372, based on 20x our ’24 GAAP EPS ests, a modest premium to recent historical multiples to reflect the improved cost discipline and capital allocation.” JPMorgan initiates Arm Holdings as overweight JPMorgan said the chipmaker is a “leader in semiconductor compute.” ” Arm is the leader in semiconductor compute architectures (~60%+ microcontroller/microprocessor unit market share) with a strong semiconductor IP portfolio and developer ecosystem.” Read more about this call here. Bank of America reiterates Domino’s as buy Bank of America lowered its price target on the stock to $461 per share from $483, but said it’s standing by its buy rating ahead of earnings later this week. “We believe, however, that DPZ’s growth rate is likely to surprise to the upside as unit growth reaccelerates and share gains in carryout support comps ahead of the category.” Goldman Sachs reiterates Netflix as neutral Goldman said its standing by its neutral rating heading into earnings next week. “In terms of the upcoming earnings report, we expect Netflix to report above Street modeled subscriber performance as a mixture of continued password crackdown execution, relative strength vs. competition in terms of breadth & depth of content on the platform (against the backdrop of strikes), and varying price points stimulate demand.” Barclays reiterates Disney as equal weight Barclays said it’s cautious on Disney heading into earnings in early November. “There continues to be significant lack of visibility beyond the very near term, which has effectively resulted in sector flows being dominated by tactical considerations. The one name where focus could gradually shift towards a longer term outlook is Disney. The company should disclose financials in the new reporting structure which breaks out ESPN, ahead of earnings.” JPMorgan reiterates Apple as overweight JPMorgan said its Apple survey checks show product delivery times are moderating. “In Week 4 of our Product Availability Tracker, delivery lead times have moderated for the second week in a row; albeit, to various degrees across models.” Baird upgrades On Holdings to outperform from neutral Baird said the shoe manufacturer has “increasing appeal.” “While some investors were hoping for a 2023E update (targets simply reiterated), we believe strong consumer demand and positive orders for spring 2024 support upside potential to estimates. Wells Fargo reiterates Tesla as equal weight Wells said it’s cautious heading into Tesla earnings next week. The firm said it’s concerned about “margin erosion.” ” TSLA walked away from its 20% auto GM [gross margin] target earlier in the year after additional price cuts. We expect auto gross margin ex EV credits to fall from 18.1% in Q2 to 16.3% in Q3.” Bank of America initiates Motorola Solutions as buy Bank of America said Motorola is “well-positioned with multiple tailwinds supporting growth.” “The company’s focus on public safety and enterprise security merits solid pricing power and a healthy funding environment with the American Rescue Plan Act (ARPA) also drives a sustainable order pipeline. Bank of America downgrades Datadog to neutral from buy Bank of America said it’s concerned about slowing demand for the software company. “We are downgrading shares of Datadog (DDOG) to Neutral (from Buy) and lowering our PO to $105 (from $123) as our demand checks and scenario analysis suggest downside revenue risk.” Jefferies upgrades Aramark to buy from hold Jefferies said the turnaround for the food service and uniform company is taking hold. “We expect organic growth of ~6% in FY24 and FY25, 2x the pre-Covid trend rate driven by a successful multi-year turnaround effort and a step change in the industry’s outsourcing penetration rate post-Covid driving new business wins.” Redburn Atlantic Equities downgrades Spotify to neutral from buy Redburn said it sees margin risks. “We remain positive on Spotify’s momentum in operating cost cuts and expect EBIT to turn positive in Q4 23 but see limited value from here given the risks to margins.” Read more about this call here. Evercore ISI upgrades Oracle to overweight from in line Evercore said it sees a compelling entry point. “We are upgrading Oracle to Outperform from In Line as we believe that the recent pullback (-13% since F1Q) simply creates a more interesting entry point for a business that is now in a better position to deliver more consistent revenue and earnings growth due a higher % of revenue coming from its cloud solutions.” Read more about this call here. Goldman Sachs upgrades Lennox to buy from sell Goldman said it sees margins getting better for the HVAC company. “upgrading LII to Buy from Sell as Resi HVAC volumes are likely bottoming, the Commercial margin improvement is not done and we expect the company to continue to beat going forward a Citi upgrades Patterson-UTI Energy to buy from neutral Citi said in its upgrade of the drilling company that it’s a “top tier” business. “The upcoming recovery in U.S. drilling is likely modest by historical standards which we believe is currently weighing on PTEN’s stock. Yet PTEN’s quality operations and deal synergies should still drive outperformance.” Baird names Capital One a fresh pick Baird said shares of the credit card company are “too compelling to ignore.” ” COF has built significant credit card reserves in the past 4 quarters in response to increased potential for rising unemployment and generally softer economic conditions, and the card reserve is now near ~8% (vs. ~6% post-crisis median), while delinquencies are near ~3.5%.” Piper Sandler reiterates Amazon as overweight Piper said it’s standing by its overweight rating on the stock. “We remain constructive on AMZN due to margins. While oil prices have risen QTD, we see structural efficiencies as more impactful and for 3Q23 we forecast $7.7BN in op income, 2% above consensus. ” Barclays upgrades Zscaler to overweight from equal weight Barclays said the cloud security company is a “market leader.” “The main driver for this upgrade is we like secular growth in SASE [secure access service edge], which has the potential to be just as big as the traditional network security market in CY26; we want to reposition for more exposure to this market and think Zscaler is a market leader.” Read more about this call here.
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