Here are Wednesday’s biggest calls on Wall Street: Oppenheimer reiterates Netflix as outperform Oppenheimer said investors should buy the dip in Netflix shares. “With shares down 22% from post-4Q highs vs. NASDAQ -7% on fears around higher churn from enforcing password sharing and slower ad launch, we think the stock is attractive at current levels.” Morgan Stanley reiterates Tesla as overweight Morgan Stanley said it’s bullish on the possibility that Tesla may enter the heat pump market. ” Tesla did not present any definite plans for a Tesla Heat Pump (HP) and we are of the view that a HP would be more of a medium- to long-term endeavor for the company. However, the concept would fit in with Tesla Energy’s product portfolio.” Piper Sandler downgrades Traeger to neutral from outperform Piper Sandler said the grilling company has elevated debt leverage. “We are downgrading COOK t o Neutral (ahead of Q4 earnings on Thursday) based on 4 themes: (1) Elevated grill inventory at retail (industry-wide) likely creates a promotional environment in 2023; (2) Elevated debt leverage; (3) No meaningful expansion to new retail partners; & (4) Concerns on big ticket spending in 2023.” UBS initiates Western Alliance Bancorporation as buy UBS initiated said the regional bank has a strong growth and profitability profile. “We think the market is mispricing WAL’s earning power, with our target P/E of 7.5x suggesting ~ $4.00 of EPS in 2024. We think sources of mispricing include contagion risk from the Silicon Valley Bank failure with shares pricing in something more dire than is fundamentally supportable in a tech/innovation deposit run-off scenario.” UBS upgrades New York Community Bancorp to buy from neutral UBS said in its upgrade of the regional bank that it’s too cheap to ignore. “We assume coverage of N.Y. Community with a Buy Rating and $10 price target. NYCB stands out on our coverage list as a name where we are above consensus on 2024E EPS, with our $1.25 2024E EPS 2.3% above consensus.” JPMorgan upgrades Baker Hughes to overweight from neutral JPMorgan said it sees “currency tailwinds” for the oilfield services company. “We upgrade Baker Hughes (BKR) to OW from N as we see upside risks to the company’s 2023 EBITDA guide of $3.7 billion given order strength, currency tailwinds, self-help, and improving macro conditions.” Bank of America upgrades W.R. Berkley to buy from neutral Bank of America said buy the dip in shares of the insurance company. “A recent sell-off in financial and insurers more specifically gives an opportunity to upgrade shares of WRB.” Credit Suisse upgrades Charles Schwab to outperform from neutral Credit Suisse said it sees an attractive entry point for shares of Charles Schwab. “Though off recent acute bottom, we still see attractive upside to our revised Sum-of-the-Parts (SOTP)-derived $67.50 target price (from $81.50). We expect client sorting will persist, but such risks seem manageable and seemingly close to peaking – based on current forward curves.” Read more about this call here. Jefferies upgrades Harley-Davidson to hold from underperform Jefferies upgraded the motorcycle maker mainly on valuation. “As HOG shares have reached our $39 PT, we see more balanced risk/reward and upgrade to Hold from Underperform.” Bank of America upgrades Discover to neutral from underperform Bank of America said it sees a more balanced risk/reward for the financial company. “We upgrade shares of Discover Financial (DFS) to Neutral from Underperform. In the wake of regional bank failures, shares of Financials/Bank stocks have sold off, as investors are concerned about bank funding, interest sensitivity, and macro weakness.” Bank of America upgrades FTC Solar to buy from underperform Bank of America said in its double upgrade of the solar company that the risks are already baked in. “We are cognizant of the ever-worsening macro backdrop, still strained regulatory landscape, and FTCI’s idiosyncratic execution challenges. With FTCI’s largest shareholder still selling, FTCI’s set up is not without risks. But this is all known.” Deutsche Bank reiterates Nike as buy Deutsche said it’s staying bullish on shares of Nike heading into earnings next week. “We expect NKE’s fiscal 3Q EPS to come ahead of consensus at $0.53 as we anticipate ongoing strength in North America and EMEA with improving trends in China.” Evercore ISI reiterates McDonald’s as outperform Evercore said the fast food giant has strong brand momentum. “Ultimately, McDonald’s stubbornly low consumer satisfaction scores should start to improve relative to near-in peers such as Wendy’s and Burger King and aspirational peers such as Chick-fil-A. We believe this will help sustain market share gains and justify renewed unit growth in 2025 and beyond.” Bank of America reiterates FedEx as buy Bank of America said it’s standing by its buy rating on FedEx heading into earnings on Thursday. “We reiterate Buy and $233 PO, which is based on 13x F2024 EPS estimate, above the low end of its 12x-18x historical trading range as we believe F2023 represents trough earnings.” Citi reiterates Microsoft as buy Citi said Microsoft is well-positioned in the cyber security sector. ” MSFT is clearly a formidable force within cyber and has become increasingly influential with impressive growth at scale, driving visible and growing share gains.” Bernstein reiterates Meta as outperform Bernstein said it’s bullish on Meta’s plan to reduce headcount. “Yesterday Meta announced plans to further reduce headcount by ~10K (13% of the workforce) and eliminate ~5K open or planned roles over the course of the year.” Citi upgrades Truist to buy from neutral Citi said it sees an attractive entry point for the regional bank. “Given the recent price action we view this as an attractive entry point and are upgrading TFC to Buy.” Read more about this call here. Atlantic Equities reiterates Walmart as overweight Atlantic Equities said it sees margins at an inflection point for Walmart. “The first driver of expansion will be scaling of the new revenue streams. The second, likely to start having an impact in another two years, will be supply chain optimization and automation. These set Walmart on a long term journey of operating margin expansion, which could see it overreach prior historical peaks.” Argus downgrades Norfolk Southern to hold from buy Argus downgraded the railroad company due to earnings per share uncertainty. ” Norfolk Southern has come under the withering eye of regulators and the U.S. Senate in the wake of two of its trains derailing in Ohio in February, along with a fatal collision involving a Norfolk Southern train and a dump truck.” William Blair reiterates Amazon as outperform William Blair said it’s analysis shows that gross margins should return to normal for Amazon. “In our analysis we found that the retail segment cost of goods, technology and content, and music and video were the largest contributors to margin weakness last year (not, as management suggested, higher shipping and fulfillment costs). The positive here is that gross margins should normalize with easing promotional pressure that resulted from inventory imbalance in late 2022.”
