Here are the biggest calls on Wall Street on Thursday: Morgan Stanley upgrades Salesforce to overweight from equal weight Morgan Stanley said it sees an attractive risk/reward for the stock. “Low investor expectations vs potential top-line upside drivers in price increases, product bundling and Data Cloud adoption frame an attractive risk/reward for CRM.” Morgan Stanley initiates Rollins as equal weight Morgan Stanley said investors should wait for a better entry point for the pest control company. ” Rollins is a leading pest control provider, which has best-in-class growth and strong margins, but we think this is already priced into the stock and we would wait for a better entry point.” Morgan Stanley upgrades JFrog to overweight from equal weight Morgan Stanley said the software company is entering a period of “durable growth.” “As a play on the volume of software updates, we see JFrog benefiting from a rebound in software development initiatives.” Morgan Stanley reiterates Ford and General Motors as overweight Morgan Stanley is standing by shares of both automakers heading into 2024. “We expect continued EV investments in Detroit, but at a far lower rate than projected. In our view, the core ICE [internal combustion engine] business can generate strong free cash flows for materially longer than the market anticipates, and we believe both GM and F can participate in the EV theme at some scale through a more measured and collaborative approach while returning capital to shareholders.” Citi reiterates Boeing as buy Citi said the aerospace giant is a top idea in 2024. ” Boeing on top — Rising production, higher cash generation, and a de-risking of the balance sheet are all on the horizon.” JPMorgan upgrades Glaukos to overweight from neutral JPMorgan said in its upgrade of Glaukos that it sees upside for the opthalmic disease company. “We see upside to today’s valuations even with shares set to end the year meaningfully outperforming other high-growth peers.” JPMorgan names Constellation Brands a top pick JPMorgan is bullish on Constellation Brands heading into 2024. “With strong F1H24 results, accelerating tracked channel volume performance and market share gains and easing comparisons into F4Q24, we expect the company to at least point to the high-end of its FY24 Beer guidance with F3Q24 results.” William Blair initiates J.Jill as outperform William Blair said in its initiation of the clothing retailer that it sees attractive shareholder returns. ” J.Jill has a relatively simple model, now stabilized: roughly 250 stores, U.S. only; close to a 50:50 online-to-retail split; and a financially sound, highly loyal customer.” Canaccord upgrades Merit Medical Systems to buy from hold Canacccord said the medical device company has EPS upside. “We believe that Merit is entering 2024 in a strong position and has potential upside to both revenue and EPS estimates.” Deutsche Bank adds Dollar General to the fresh money list Deutsche added the discount retailer to its top ideas list for the first quarter of 2024. “We believe DG has a favorable setup in 2024 given the return of Todd Vasos as CEO with a plan to address what have largely been self-inflicted execution challenges.” Baird upgrades Insulet to outperform from neutral Baird said in its upgrade of the stock that it sees GLP-1 concerns easing for the med tech company. “…[W]e upgrade PODD to Outperform on strong 2024 growth/easing GLP-1 concerns, and we remain cautious across most of dental other than ALGN.” Bank of America reiterates Micron as buy Bank of America is standing by its buy rating after Micron’s earnings report post-market Wednesday. “We believe the memory market is at an inflection point heading into CY24, and expect MU to return positive EPS in FQ3/Q4.” Wedbush reiterates Amazon as a top pick Wedbush raised its price target on the stock to $210 per share from $180 and is bullish heading into 2024. ” Amazon is on pace to generate $46.5B of advertising revenue in 2023, and we think the company is well positioned to continue taking share of global digital advertising spending over a multi-year period.” Baird names Nvidia a top pick in 2024 Baird said in a note earlier this week that the company is at the forefront of AI. ” Nvidia is at the center of the secular demand for AI ahead.” Pivotal upgrades Spotify to buy from hold Pivotal said in its upgrade of Spotify that it sees “renewed” financial discipline. “The increased target price is driven by: 1) higher forecast medium/long term EBITDA/Free Cash Flow on SPOT’s renewed focus on financial discipline vs. what we view as a very large margin expansion opportunity, 2) continued strong results and what appears to be an ability to take price without significant churn.” Morgan Stanley upgrades Regency Centers to overweight from equal weight Morgan Stanley said the mall real estate investment trust is a top pick in 2024. ” REG has one of the highest quality portfolios in the open air center space as measured by rent per SF of $24.25 and occupancy of 94.6%.” Morgan Stanley downgrades Simon Property to equal weight from overweight Morgan Stanley said in its downgrade of Simon Property that estimates are too high for the real estate investment trust. “The discount to open air center peers has narrowed significantly from lows of -40% to -16% current.” Wedbush reiterates Netflix as outperform Wedbush is standing by the leading streaming stock heading into 2024. ” Netflix remains on Wedbush’s Best Ideas List, given our view that the company can generate significantly more free cash flow than its guidance suggests.” Wedbush upgrades Cava to outperform from neutral Wedbush sees another quarter of upside for the Mediterranean fast casual food chain. “While we view lower grocery inflation as an incremental threat to the fast casual category in 2024, we also believe CAVA’s relative value proposition and maturation cycle contribution to comp positions it to overcome the incremental headwind.” Wedbush adds Dutch Bros to the best ideas list Wedbush added the coffee chain to its best ideas list and sees margin growth. “We add BROS to the Wedbush Best Ideas List. We believe the magnitude of sales transfer to have peaked in 2023, and to gradually decline in 2024 and thereafter.” UBS names Coterra Energy a top pick UBS said in a note on Thursday that the energy company is a “top gas pick.” “CTRA has demonstrated positive execution YTD in 2023, achieving solid oil growth, and we look to the company’s updated 3-year plan, to be laid out on its 4Q23 earnings call, as the key catalyst in helping the company’s valuation re-rate higher.” Needham names CrowdStrike a top pick Needham sees the cyber security company as a top idea heading into 2024. ” CRWD shares performed well in CY23 and we think the company is in an even better position going into CY24 as share gains continue, new ARR [annual recurring revenue] growth returns and margins and profitability expand.” UBS names UnitedHealth a top pick UBS said the healthcare giant is a favorite idea heading into 2024. “[W]e view UNH as well-positioned heading into 2024. UNH’s fundamentals remain strong despite a mixed macro environment (including an adverse 2024 Medicare Advantage rate notice, economic uncertainty, inflationary pressures, etc.).” Bernstein reiterates Caterpillar as market perform Bernstein said the stock’s valuation is too “stretched” right now. “…[W]e are putting CAT on negative watch given the stretched valuation and deteriorating earnings/backlog growth picture.”
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