Here are the biggest calls on Wall Street on Monday: Morgan Stanley reiterates Apple as overweight Morgan Stanley named the tech giant as its top pick in a downturn. “As a result we continue to have a quality bias and highlight AAPL and CDW as our highest conviction OW names (Apple is our Top Pick) given greater insulation during a downturn, and LOGI, XRX and CRCT as our top UW ideas given the elevated risk of negative revenue and earnings revisions post-COVID.” Read more about this call here. Credit Suisse downgrades Fox to neutral from outperform Credit Suisse says it’s concerned about reports of a merger with News Corp. ” Fox Corp’s Friday announcement that Rupert Murdoch has decided to finally pursue a ‘combination’ of Fox and News Corp undercuts this remaining investment pillar; we downgrade to Neutral.” Read more about this call here. Wells Fargo reiterates Netflix as equal weight Well says it’s standing by its equal weight rating heading into earnings later this week and that it’s waiting for more visibility on the company’s ad-tier product. “We think AVOD (ad video on demand) will be big for NFLX long term, and a big subject of the print, but 2023 will largely be about testing success with ad customers vs raking in the revenue.” Cowen reiterates Amazon as outperform Cowen said shares remain attractive heading into earnings later this month. “We expect strong results for AMZN in 3Q driven by Prime Day with [revenue estimates] near the high end of guide and ~1.5% above cons.” Morgan Stanley resumes Prologis as overweight Morgan Stanley resumed coverage of the supply chain logistics company and named it a top pick. The firm says it sees “cash flow growth visibility.” “Expect record tight markets to loosen but maintain modest positive rent growth. Resume PLD at OW due to operating upside and cash flow growth visibility.” Morgan Stanley upgrades Clorox to equal weight from underweight Morgan Stanley said in its upgrade of Clorox that it sees some earnings upside ahead of the company’s earnings later this quarter. “We like CLX and ELF as positive trades on the quarter with clear EPS upside, which we expect to continued LT at ELF. Wells Fargo upgrades Cloudflare to overweight from equal weight Wells said it sees an attractive entry point for the IT service management company. “First, shares have declined 65% YTD (NASDAQ has declined ~34% YTD), creating a better entry point. Second, we believe Cloudflare is benefiting from the increasing focus on consolidation to reduce costs and gaining share from point product vendors.” Read more about this call here. Susquehanna initiates SunPower and Sunnova as positive. Susquehanna says the solar and renewables companies are well positioned due to the Inflation Reduction Act. “We are initiating coverage of NOVA and SPWR – both rated Positive with price targets of $38 and $25, respectively. Oppenheimer reiterates Chipotle as outperform Oppenheimer says Chipotle is a “rarity” as the firm sees earnings upside among a deteriorating macro. “Our analysis suggests an attractive setup for SSS while consensus still overly discounts the equation for margins and EPS power through 2023.” Deutsche Bank downgrades XPO Logistics to hold from buy Deutsche said in its downgrade of the freight company that it sees lackluster service improvements. “We are downgrading XPO shares to Hold from Buy. Following the spin-off of GXO last year and upcoming spin-off of RXO, XPO will become a pure play less than truckload (LTL) company.” Evercore ISI downgrades Regeneron to in line from outperform Evercore downgraded the biotech company and says it has a lack of visibility over the company’s retinal disease drug, Eylea. ” REGN shares have approached our $760 price target. And after a closer look at the high dose Eylea data as well as surveys of investors and retina specialists, we do not see compelling rationale to raise our PT at this time.” JPMorgan adds TJX Companies to the focus list JPMorgan added the stock to its focus list and says TJX is a top “growth idea.” “Robust assortment of branded goods across all categories notably improving as the quarter progressed with management citing today’s size/scale at 21K+ vendor partners as a competitive advantage to drive newness and healthy in-stocks across floorsets.” William Blair initiates Applied Materials as outperform William Blair said in its initiation of the semis supplier that it’s well positioned for the long term. ” Applied Materials continues to pivot pieces of its business toward a subscription-based model, dampening its exposure to cyclical market forces.” Northcoast downgrades Kroger to neutral from buy Northcoast says it’s concerned about Kroger’s merger with Albertsons getting approval. ” Kroger has a long history of successfully integrating acquisitions. We have a little reservation about management’s cited sources of synergies from this proposed transaction.” Needham adds Taiwan Semiconductor to the conviction list Needham added the semiconductor company to its conviction list and says it sees a positive risk/reward. “We are adding TSMC to the Needham Conviction List, replacing FORM. We see a positive risk/ reward as we update the bull/bear debate.”
