Here are Thursday’s biggest calls on Wall Street: RBC names Amazon and Meta top picks RBC said Amazon and Meta are top ideas in 2024. “We believe a risk-on environment in 2024 may tilt companies of all sizes (anyone that advertises) to re-prioritize growth more than ’23, creating potential tailwinds for digital ad companies in our coverage with some potential cross currents/margin implications for companies/advertisers which rely on direct response digital ads to drive growth.” Bank of America reiterates Amazon as buy Bank of America raised its price target on Amazon to $185 per share from $168 and said the stock remains a key pick in 2024. “Potential positives include: 1) US eCommerce acceleration, as reopening & inflation headwinds fade; 2) AWS positioned for acceleration; 3) Retail margin improvement cycle above estimates; 4) Multi-billion Prime video ad ramp.” Barclays upgrades Chewy to overweight from equal weight Barclays said it sees “incremental upside optionality” for Chewy shares. “Upgrading to OW. We think growth inflects in F2H24, and we see upside to consensus in FY25, with incremental upside optionality from vet clinics, int’l and ads.” Oppenheimer upgrades Fiserv to outperform from perform Oppenheimer said it sees “improving EPS growth” for the financial tech company. “FI is likely best positioned among peers to see stable to improving EPS growth.” Oppenheimer upgrades Mastercard to outperform from perform Oppenheimer said Mastercard is “incrementally positive on payments after its years of underperformance.” “Mid-Teens EPS Is Good Enough for Us; Upgrading to Outperform.” Redburn Atlantic Equities downgrades Warner Bros Discovery to neutral from buy, Paramount to sell from neutral Redburn said in its downgrade Paramount that it sees “material downside.” The firm also downgraded Warner Bros Discovery and said it sees advertising at a “negative tipping point.” “We see most downside at Paramount (PARA), which we downgrade to Sell, with material downside at Warner Bros. Discovery (WBD), which we downgrade to Neutral. BMO upgrades Southern Company to outperform from market perform BMO said it sees “valuation headroom” for the electric power distribution company. “Although SO was one of the best performing stocks during 2023, we still see relative valuation headroom as we believe the company’s profile justifies one of the highest premiums in the group.” Goldman Sachs downgrades Lyft to neutral from buy Goldman said it sees a more balanced risk/reward for Lyft shares. “We downgrade LYFT to Neutral (from Buy), with a $15 12-month price target (from $12), as we see a more balanced risk-reward skew in the stock following a nearly 35% increase in the company’s share price since its last Q3’23 earnings results in early November.” Morgan Stanley initiates FTAI Aviation as overweight Morgan Stanley said the aviation company is “unique.” “FTAI Aviation (ticker: FTAI) is a relatively under the radar aviation leasing and Maintenance, Repair, and Overhaul (MRO) company with positive optionality on Parts Manufacturer Approval (PMA) in the hot section of the jet engine.” Citi upgrades Appian to buy from neutral Citi said in its upgrade of the cloud computing company that it sees more AI tailwinds than headwinds. “Additionally, we see Appian beginning to layer in AI solutions through CY24 and building out its automation platform with AI potentially becoming a tailwind.” Baird upgrade Salesforce to outperform from neutral Baird said Salesforce shares are compelling at current levels. “With current valuation near historical lows, top-line growth and expectations muted (Street +11% next two years), we see upside from current levels. Price increases, the potential return of front office spend, and crisper sales execution should drive upside.” Deutsche Bank downgrades Albemarle to hold from buy Deutsche said it sees too many challenges ahead for the lithium company. “We adopt a more neutral stance on the Lithium space, as we believe challenges will persist in the near-term.” Seaport downgrades KB Home to neutral from buy Seaport said the risk/reward seems more balanced for the homebuilder. “We acknowledge KB Home’s past success, but as it pivots to ‘growth mode’ in FY24, we see a balanced risk to return for the stock prospectively, as capital funds growth vs buybacks, amid flat gross margins (21%) guidance, supporting our Neutral from Buy rating change.” Wells Fargo names McDonald’s a top pick Wells said the fast food chain is a top pick in 2024. “We like MCD for offense & defense.” Wells Fargo upgrades Willis Towers Watson to overweight from equal weight Wells said it sees “multiple expansion” for the multinational insurance company. “We raise WTW to OW as we believe the company has a tailwind to its 2024 guide due to higher pension income and FX. Additionally, WTW is seeing strong organic and improving margins, which should result in multiple expansion.” Goldman Sachs names Apple a top pick into earnings Goldman said the stock is a top pick ahead of earnings later this quarter. ” Apple Inc . (AAPL): Sustained Services expansion enabled by growing installed base.” JPMorgan reiterates Nvidia as overweight JPMorgan said in a note following the Consumer Electronics Show that the “proliferation of AI at the edge represents a strong growth opportunity” for stocks like Nvidia. “Companies have discussed capturing the opportunity in AI at the edge (INTC, SYNA, ADI, NVDA ) – in particular AI-enabled PCs.” Jefferies upgrades American Airlines to buy from hold Jefferies upgraded the airline due to “operating leverage.” “Upgrade AAL to BUY (PT $18) as utilization is largest lever in the group to play defense against macro.” Susquehanna downgrades Plug Power to neutral from positive Susquehanna acknowledged its ratings downgrade of Plug was late, but said it sees too many headwinds to ignore. “While the rating changes are late, it reflects preference for new capital. Overall, the resi segment is likely to see recent headwinds continue into at least the first half of this year before demand gets better heading into 2025.” Oppenheimer downgrades Blackstone to perform from outperform Oppenheimer downgraded the private equity company mainly on valuation. “We are as bullish as ever on the fundamental outlook for the group, but our valuation discipline makes us downgrade BX and HLNE to Perform from Outperform.” Wells Fargo reiterates Disney as overweight Wells said it’s standing by shares of Disney. ” DIS has rerated to higher lows, but to break-out, investors need to see that Disney+ ARPU can expand, dropping through to a sharp DTC OI [direct-to-consumer operating income] inflection ahead.” Bernstein reiterates Coinbase as market perform Bernstein said it’s uncertain whether the the bitcoin ETF approval is a positive for Coinbase shares. “It is simply unclear whether the bitcoin ETFs, more broadly, can lead to broader ‘entry-level’ adoption and trading of other crypto assets (basic trading on app is where Coinbase makes it money especially if we take out low-multiple cyclical interest income).” Well Fargo upgrades Sealed Air to overweight from equal weight Wells said in its upgrade of the air products company that it likes its self-help initiatives. “We upgrade SEE to OW (prior EW) given increased focus on day-to-day execution combined with self-help initiatives and mostly de-risked ’24 expectations. Furthermore, we see potential for value creation from portfolio optimization. Bank of America initiates DoubleVerify as buy Bank of America initiated the digital media research company and said it’s the “Moody’s of digital advertising.” “Think of DoubleVerify (DV) as the Moody’s of digital advertising.” Morgan Stanley reiterates Eli Lilly as overweight Morgan Stanley raised its price target on Eli Lilly to $763 per share from $727 and said it sees more upside. “We see the set up for the stock similar to the company’s 2023 guidance outlook – where revenue was slightly ahead of consensus and EPS was below but investors generally focused on the top-line growth outlook nearer-term. Wedbush upgrades Williams-Sonoma to outperform from neutral Wedbush said in its upgrade of the Williams-Sonoma that it sees stronger demand in 2024. “We are upgrading our rating on WSM from NEUTRAL to OUTPERFORM.” JPMorgan upgrades L3Harris to overweight from neutral JPMorgan said in its upgrade of the defense company that it has upside potential. “In conjunction with this, we upgrade LHX to OW, as it is our Defense product stock with the most upside potential. We see a relatively attractive valuation, cash flow that should be inflecting higher, and an increased focus on shareholder value.” Jefferies upgrades Wabtec to buy from hold Jefferies said in its upgrade of Wabtec that the railway engineering company has “capital allocation optionality.” “Bottom line – in an uncertain 2024 industrial environment, we like WAB’s leading market share, strong backlog, and capital allocation optionality.”
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