Here are Tuesday’s biggest calls on Wall Street: Bank of America names CVS a top pick Bank of America said CVS is a top idea for 2024. ” CVS Health has two things it did not have during the past few years: 1) a clear path to accelerating earnings growth; and 2) appropriately reset expectations.” Barclays downgrades Apple to underweight from equal weight Barclays said it’s “time for a breather” for shares of Apple. “We are lowering our rating from Equal Weight to Underweight. IP15 has been lackluster and we believe IP16 should be the same.” Stifel names Nvidia a top pick Stifel said Nvidia is the firm’s new top idea. ” NVDA is our new ‘best idea’ for AI/Accelerated compute.” Jefferies upgrades Cube to buy from hold Jefferies said it sees share outperformance for the storage company in 2024. “We see an opportunity for CUBE to outperform in 1H24 and upgrade to Buy.” Jefferies downgrades Choice to underperform from hold Jefferies downgraded the stock due to its pursuit of Wyndham. “We are downgrading CHH to Underperform from Hold given the elevated risks around its shares and business operations in its pursuit of WH.” Jefferies upgrades Boston Properties to buy from hold Jefferies said the real estate company is “best-in-class.” “We upgrade BXP to Buy, as we expect the stock to regain its historical valuation premium to peers (vs. in line today) given a better occ/earnings outlook and best-in-class portfolio.” Wells Fargo reiterates Citi as overweight Wells said it’s bullish on Citi shares over the next 3 years. “We expect stock to double to $100+ over 3 yrs. Increase 1 yr. PT from $60 to $70 given new Fed clarity on rates, and likely softer than proposed regulation.” Piper Sandler upgrading nCino to overweight from equal weight Piper said it sees an attractive risk/reward for the fintech company. “We upgrade banking vertical SW leader NCNO on a favorable risk-reward…” Piper Sandler names Snowflake, Workday and Monday.com as top picks Piper named several cloud application software companies as top picks for 2024. “We flag WDAY, MNDY, and KVYO as three GARP ideas to own with compelling risk-reward profiles having CY25E EV/S multiples below 8x. … .For growth investors with a higher risk appetite, we flag SNOW and GLBE as two differentiated cloud software stocks with 30%+ compounder potential. DA Davidson names O’Reilly a top pick DA said the auto parts company is a top pick in 2024. “We are including O’Reilly Automotive , Inc. as our next ‘Best-of-Breed Bison’ company within the framework developed by D.A. Davidson’s research team to find long term best in class companies with sustainable moats and favorable risk / reward dynamics.” JPMorgan adds Tapestry to the focus list JPMorgan added Tapestry and said it sees “bottom-line growth accelerating.” “Remain Overweight, adding shares to J.P. Morgan’s Analyst Focus List as a value idea, and raising our Dec 24 Price Target to $46 based on 6x our CY25 adj. EBITDA.” Baird upgrades Thoughtworks to overweight from neutral Baird said it sees growth accelerating for the tech consultancy company, “During 2023, TWKS was the second worst stock on our list (down 52%; S & P +24%) due to weak bookings, elongated sales cycles, and clients breaking larger programs into smaller contracts. … .We expect accelerating growth in coming quarters, with estimates eventually biased higher as margins normalize.” Goldman Sachs initiates Rollins as buy Goldman said the pest control company has a “differentiated” offering. “We believe ROL is a differentiated and leading provider of pest control services leveraged to strong route density, a unique multi-brand strategy that facilitates market share gains, and attractive business model characteristics including recurring revenues, defensiveness and operating leverage.” B. Riley downgrades Brunswick to neutral from buy B. Riley downgraded the marine recreation company on valuation. “We are downgrading Brunswick Corporation (BC—Neutral, $106 PT) from Buy to Neutral with shares now within ~10% of our recently-raised PT after just surpassing our previous PT on 12/13.” Deutsche Bank downgrades Estee Lauder to hold from buy Deutsche downgraded the stock mainly on valuation. “Given recent price appreciation (ahead of our own expectations for the pacing of fundamental improvement), we downgrade EL and SMPL from Buy to Hold.” Deutsche Bank names Block and Bill Holdings as top picks Deutsche said it’s bullish on several fintech stocks heading into 2024. “Our top picks for next year include Buy-rated names Block, Bill, and Marqeta.” Barclays downgrades Regions to underweight from equal weight and Citizens to equal weight from overweight Barclays downgraded several regional banks on Tuesday due to concerns about slowing net interest income growth. “For CFG and RF , we expect net interest income growth to lag peers in the near term.” JMP names DoorDash a top pick JMP said the stock is underappreciated in 2024. “With a stable macro and new verticals supporting bookings growth, we think incremental margins are underappreciated in 2024 as DoorDash digests past investments, and we are the Street-high estimate for DoorDash’s 2024 EBITDA.” Bank of America names Boeing a top pick Bank of America said it’s bullish on Boeing heading into 2024. “On the OEM front, we see several catalysts for Boeing going into 2024 and see opportunities for Howmet to continue to benefit from pricing power as one of the few western titanium structures suppliers.” Bank of America upgrades Brady to buy from underperform Bank of America said shares of the manufacturing company are attractively valued. “We upgrade Brady Corp (BRC) and Pactiv Evergreen (PTVE) to Buy (from Underperform and Neutral, respectively), mainly on opportunities for growth and still-attractive valuations looking ahead to 2024.” Stephens upgrades American Express to equal weight from overweight Stephens said the company is a beneficiary if interest rates fall in 2024. “With management having already implicitly guided to a 2024 guidance miss on a December webcast, investors are now focused on 2025 estimates, and we think American Express can return to its historical revenue and EPS y/y growth targets by then.” Evercore ISI downgrades Southwest to in line from outperform Evercore said in its downgrade of Southwest that it sees a more “balanced” risk/reward. “We’re moving to the sidelines as the near-term risk reward is balanced, in our view. 2023 was a transition year for the company as it recovered from operational challenges in December of 2022 and worked to get new labor contracts in place.” DA Davidson downgrades Hasbro to neutral from buy DA downgraded Hasbro mainly on valuation. “Shares are up ~20% in two months, and we are taking this opportunity to cut our below-consensus estimates and downgrade to NEUTRAL from Buy.” Wells Fargo names Uber a top pick Wells said Uber is a top pick in 2024. “Continue to see Uber 2024 – 2026 stock repurchase capacity of $27B (20% of mkt cap), we expect formal capital return framework introduced 1H:24.” Wells Fargo upgrades Expedia and Booking Holdings to equal weight from underweight Wells upgraded several travel booking sites on Tuesday and says gross bookings estimates are achievable. “We preview 2024 for the OTA & alternative accomodation sectors, upgrading BKNG & EXPE to Equal Weight in the process. Based on top-down analysis, we see BKNG / EXPE 2024 GBs [gross bookings] ests as achievable and our ’23 competitive intensity thesis did not play out.” Cantor Fitzgerald upgrades Sprout Social to buy from hold Cantor said the software company is attractively valued for 2024. “We are upgrading shares of Sprout Social to Overweight from Neutral and increasing our PT to $74 from $48. Barclays upgrades Evergy to overweight from equal weight Barclays said in its upgrade of the electric services company that the stock is attractive. “For EVRG , we see the stock as attractive at a 13% P/E discount to large cap peers, trading near peers with arguably more rate execution risk in 2024 and lower-quality balance sheets, Canaccord names Amazon, Meta and Alphabet top picks Canaccord said Amazon, Meta and Alphabet could see “further expansion” in 2024. “Among our covered large and mega caps, we like META, GOOGL, SPOT, UBER and AMZN. While we acknowledge that these five names saw significant rallies in their share prices in 2023, we still think their respective multiples are reasonable and could see further expansion.”
