Here are Tuesday’s biggest calls on Wall Street: RBC initiates Home Depot as sector perform RBC said it sees too many negative catalysts for Home Depot . “In short, there are a lot of reasons to like the story over the long term, but we’re of the view that various macro factors (high rates, persistent inflation, shift from goods to services, etc.) skew near term earnings risk to the downside.” Evercore ISI initiates Nike as outperform Evercore said Nike’s fundamentals have bottomed. “While the Athletic category took longer than we expected to emerge from post-COVID supply chain/inventory bullwhip issues, we think Nike’s recent F1Q update suggests fundamentals for the category have finally bottomed— particularly with global/N. America inventory -10%/-20% YOY.” UBS initiates Paycom as buy UBS said investors should buy the dip on the payroll and software provider. “As such, as a more constructive risk-on view emerges on easing rates, we could see particularly attractive opportunities emerge in Ceridian and Paycom on weakness.” Morgan Stanley reiterates Apple as overweight Morgan Stanley said it’s standing by its overweight rating on the stock after its 10K annual report. “While Apple is exposed to slowing consumer goods demand in the near-term, the long-term outlook remains attractive given its technology leadership, sticky (and growing) user base, and paths to spend per user upside.” Citi initiates BridgeBio as buy Citi said in its initiation of the biotech company that shares are compelling. ” BridgeBio is a mid-cap, near-commercial biotechnology company, with both a diverse and extensive therapeutic pipeline that covers a wide range of therapeutic modalities from small molecule to early-stage gene-therapy.” Deutsche Bank downgrades Peloton to hold from buy Deutsche said in its downgrade of the stock that it’s concerned about a lack of growth drivers. “While we remain bullish on Peloton having a large TAM ahead of it that can support accelerative growth, particularly given the incremental growth drivers from the App, Commercial business, new modalities/hardware, and growing partnerships, the confidence in underwriting the success of these growth drivers in the medium term is challenging.” Edward Jones upgrades Hewlett Packard to buy from hold Edward Jones said shares of Hewlett Packard are compelling. “We think that shares are attractively valued and we think that the PC market will return to growth in 2024 as PC’s purchased during the pandemic are replaced.” DA Davidson upgrades Appian to buy from hold DA said the cloud computing company is executing well. “We are also constructive on the underlying business on the heels of 3Q23 reporting, where we saw Appian’s macro pressures hold firm and the team execute on both product development and cost discipline fronts.” Wells Fargo reiterates Disney as overweight Wells said it sees an “action packed print” for Disney earnings on Wednesday after the bell. “We think all roads lead to future DTC [direct to consumer] profit expectations, which is the biggest opportunity while DTC subs are the biggest risk. We also roll out our new Super Model w/ recast financials and new estimates.” Morgan Stanley initiated Tal Education as overweight Morgan Stanley said the China education company is defensive. “Bolstered by strong net cash positions, China’s education industry should provide defensiveness in a turbulent ADR market, in our view. Initiate EDU and TAL at OW.” Morgan Stanley names TotalEnergies as a top pick Morgan Stanley named TotalEnergies as a top pick and says the energy company has “resource depth and resilience.” “With an uncertain wider-market backdrop, our sector rating stays ‘Attractive’; key Overweights are TotalEnergies (new top pick) and BP.” Evercore ISI initiates TJX Companies as outperform Evercore said TJX is well positioned for share gains. “Best off price execution, multiple paths to share gains (trade down, industry consolidation, price increases), under-earning segments (HomeGoods, Internat’l), store remodeling tailwinds and SG & A [selling, general and admin expenses] pressure easing.” UBS initiates Thomson Reuters as buy UBS said the media analytics company is an AI beneficiary. “The sector has long invested in AI solutions and while we don’t expect an immediate boost to revenue and earnings from generative AI, we are seeing and will continue to see accelerating top-line and margins from these investments.” Goldman Sachs upgrades DigitalOcean to buy from sell Goldman said the software company is underappreciated and investors should buy the dip. “We upgrade DigitalOcean to Buy from Sell post significant stock underperformance (even with the +17% move on 11/3, DOCN is -7% YTD vs. Nasdaq +30%).” Morgan Stanley reiterates Tesla as overweight Morgan Stanley said in a note on Tuesday that Tesla needs to “stop missing numbers” and execute better, but that the firm is sticking with its overweight rating. “As is typical for Tesla, the level of investor sentiment tends to follow the share price (in both directions). The drop in Tesla shares has influenced investor sentiment, reinforcing the share price move.” Melius reiterates Nvidia as buy Melius said Nvidia share price momentum is “picking up.” ” Nvidia’s business is evolving faster – and the extension of sales within its ecosystem can help it move beyond a traditional ‘book to bill’ business.” DA Davidson upgrades Monday.com to buy from neutral DA said it’s bullish heading into the project management cloud company’s earnings report next week. “We view the recent share price dislocation as largely not fundamental-based, reflecting Monday’s home country, and see a good buying opportunity for a high quality asset.” Morgan Stanley downgrades Re/Max to underweight from equal weight Morgan Stanley said in its downgrade of Re/Max that it sees too many negative catalysts for the real estate company. “The company expects to announce a new CEO in the next couple weeks. This expected management transition comes at a time of elevated litigation and macro headwind to the business which increases execution risk. We expect investors to take a wait and see approach on the new management and remain on the sidelines.”
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