Here are Friday’s biggest calls on Wall Street: Morgan Stanley names BlackRock a top pick Morgan Stanley said BlackRock shares are attractive for 2024. “Improved macro prospects lead us to selectively add risk; elevate BLK to Top Pick (replacing CBOE).” JPMorgan downgrades BlackRock to neutral from overweight JPMorgan said in its downgrade of BlackRock that it sees the company’s ETF business slowing. “Downgrading to Neutral — Equity ETF Business Pressured.” Morgan Stanley reiterates Tesla as overweight Morgan Stanley stood by Tesla in light of the company’s autopilot recall. “On the recall itself, Tesla will release an (over the air) software update free of charge (notification letters expected to be mailed Feb 10, 2024). We do not expect a material cost impact during FY24 related to the recall.” Bernstein reiterates Nvidia as outperform Bernstein stood by its outperform rating on the stock. “We cannot say for sure that Nvidia will never encounter some sort of air pocket. But we remain very bullish on the long term opportunity in front of them, and continue to believe that in 5 years or 10 years we will all be talking about an industry that is far larger than the numbers being bandied about today.” Morgan Stanley upgrades R1 RCM to overweight from equal weight Morgan Stanley said the management services company is an “industry leader.” “We view R1 as an industry leader possessing the scale and capabilities to capture durable double-digit growth in revenue cycle management.” UBS upgrades STMicroelectronics to buy from neutral UBS said the semiconductor company is underappreciated. ” STMicro faces several headwinds both in the near (cyclical) and midterm (Chinese competition); however, at current valuation, we believe these are more than priced in.” JPMorgan upgrades Credicorp to overweight from neutral JPMorgan said the Latin American financial services company is a “winning franchise.” “We have been on the sidelines on Credicorp for some time, just waiting for the right moment to become more constructive on the name.” Jefferies initiates CyberArk as buy Jefferies said the cyber security company is well-positioned. ” CYBR is well-positioned in a sizable market ($48B in ’27 +14.5% CAGR) making strides in profitability as it completes its sub transition.” Jefferies initiates First Solar, Sunrun and Enphase as buy Jefferies said it likes solar stocks with a “strong backlogs and balance sheet.” “We initiate with a BUY on FSLR (PT $211), ENPH (PT $145), and RUN (PT $25), and a HOLD on ARRY (PT $18) and SPWR (PT ~$6).” Barclays names Penn, Caesars, Royal Caribbean, Carnival, Hilton Grand Vacations top picks Barclays named several gaming and cruise companies top ideas for 2024 in an outlook note Friday. “Our favorite ideas in 2024 are PENN (all-in on ESPN BET), CZR (underlying FCF resilience and deleveraging story under-appreciated, digital profitability catalyst), RCL / CCL (consumer value proposition, co-specific drivers), and HGV (valuation, significant self-help).” KeyBanc names Walmart and Ollie’s as top picks KeyBanc said Friday that it sees market share gains for both stocks in 2024. “This backdrop favors WMT and OLLI , some of our top picks that are driving share gains. For patient investors, the outlook for 2025 seems to be improving, given the increased likelihood that the Fed will cut rates in 2024 (and the lagging flow-through to fundamentals for our sector).” Morgan Stanley reiterates Nike as overweight Morgan Stanley stood by Nike shares heading into earnings next week. “Though we see risk to 2Q & FY topline, EPS appears well protected, & the market seems braced for this outcome.” Bernstein names Kraft Heinz a top 2024 idea The firm said food “stock prices vs. the market in 2022 is now rather overblown.” “Our favorite names on the long side are Mondelez, Simply Good Foods, Hain Celestial, Kraft Heinz, McCormick and Tyson.” Morgan Stanley names T-Mobile a top pick Morgan Stanley said the cellular company is a top idea in 2024. “We reinstate T-Mobile as our Top Pick and are updating estimates and/or price targets for FYBR, LUMN, UNIT, and ATEX.” Morgan Stanley upgrades Elanco to overweight from equal weight Morgan Stanley said in its upgrade of the animal health company that it has “tangible innovation drivers.” “In the interim, we’d focus on companies with tangible innovation drivers, such as ELAN (upgrade to Overweight from Equal-weight), ZTS, and IDXX as we head into 2024.” Wells Fargo upgrades General Electric to overweight from equal weight Wells Fargo said in its upgrade of the stock that its balance sheet is attractive. ” GE combines an attractive business with high aftermarket mix, solid management team with a clean balance sheet, L-T margin upside and built-in catalyst with the Vernova spin in early Q2.” Bank of America upgrades Advanced Micro Devices and Micron to buy from neutral Bank of America said in its upgrade of AMD that it has “accelerator share capture.” The firm also upgraded Micron and said it should benefit from rising semiconductor memory prices. “Upgrade AMD to Buy from Neutral as we now see potential for 5-10% accelerator share capture in a growing market. … We believe the latest memory down cycle is now generally behind us, and MU should benefit from rising spot/contract prices of DRAM/NAND into CY24/25E.” Bank of America names Nvidia a top pick Bank of America said the company is a top pick in 2024. “We believe it’s early to predict a peak, as these trends take decades to play out. NVDA remains our top pick with a $700 PO.” Deutsche Bank downgrades Northrop Grumman to hold from buy Deutsche Bank said in its downgrade of the defense stock that Northrop shares are expensive right now. “If we can’t convincingly articulate a thesis for positive revisions or multiple expansion, then the intellectually honest result is that we can’t argue for outperformance, driving our downgrade.” Deutsche Bank upgrades L3Harris to buy from hold Deutsche Bank said in its upgrade of the defense contractor that it sees a “positive revision opportunity.” “We are upgrading LHX to Buy (from Hold) and raising our target price to $240 (from $184), reflecting 16% upside potential.” MoffettNathanson downgrades Roku to sell from neutral MoffettNathanson said in its downgrade of Roku that it sees challenging comps. “Heading into Roku’s third quarter 2023 earnings, we decided to take our Sell call off the stock as we believed that the company was getting more focused on efficiency and margin expansion. Hard to believe, but at over $100 per share now, Roku’s share price has nearly doubled since then.” Susquehanna initiates Intuit as positive Susquehanna said it likes the company’s wide array of products. “While there are many reasons to like Intuit’s vast fintech franchise that extends from SMB (small midsize business) accounting (QuickBooks) to consumer and SMB tax (TurboTax), SFG (Susquehanna) sees the active rollout of their B2B Payments Platform introduced in October as materially accretive to consensus estimates.” Susquehanna initiates Palo Alto Networks as positive Susquehanna said Palo Alto is a “category leader.” “We are launching coverage of the cybersecurity software sector, within the broader software universe.” Bank of America raises Colgate-Palmolive to buy from neutral Bank of America said it sees a margin inflection for Colgate. “In our view CL holds potential to grow above its long-term targets over the next 12 months which should serve as a catalyst for the stock.” Bank of America upgrades Clorox to neutral from underperform Bank of America said it sees a recovery picking up for Clorox shares. “We see a recovery in volume and shelf space taking shape following impacts from the cyberattack, which we expect will allow Clorox to return to its annual growth rate of +3-5% from its Ignite strategy in F25/F26.” Bank of America downgrades Hershey to neutral from buy Bank of America said it sees limited upside for the candy stock. “We lower our rating on Hershey (HSY) shares from Buy to Neutral and price objective from $250 to $200. HSY is a best in class snacking franchise that has delivered consistent EPS upside in recent years. However, we see limited upside potential in FY24.” Wells Fargo upgrades Moody’s to overweight from equal weight Wells Fargo says the financial services company is a top idea in 2024. “Our top picks into 2024 include ECL , FICO , MCO (upgrade to OW from EW) and EFX (upgrade to OW from EW).” JPMorgan names Marvel, Micron and Arm top ideas The bank named several semis companies as top picks for 2024. “2024 Outlook: Cyclical Recovery and Sustained Cloud/AI Demand Trends; Continue to Be Positive on Stocks – Favor ADI, MCHP, MRVL , MU, ARM, SNPS, KLAC.” Morgan Stanley upgrades Omnicom to overweight from equal weight The firm said it sees organic growth for the ad and media company. “Why OMC to OW and why now? We see upside to organic growth estimates for ’24 at 3% with a realistic bull case of 5.5%.” Baird downgrades Zions and U.S. Bancorp to neutral from outperform Baird downgraded several banks on Friday mainly on valuation. “Given the significant outperformance by bank stocks over the last several weeks, we are of the view that risk/reward is deteriorating at the margin, and although we are still seeing value in the broader group, we are downgrading ZION and USB to Neutral.” UBS initiates Box and Dropbox as buy UBS initiated several content management software companies on Friday and said they are attractive. “We believe a 11.5x multiple is appropriate to value shares of DBX; applying this multiple to the current share price implies the street expects $881 million of CY2025 FCF, below our $1,019 million estimate. … Box has numerous mid-term growth levers in progress, maturing, and set to surface over the next 24 months creating a meaningful monetization opportunity in CY2025-2026…” Susquehanna initiates Las Vegas Sands and Wynn as positive Susquehanna has a “bullish industry outlook” for stocks such as Las Vegas Sands and Wynn. “We initiate coverage of the Macau-focused casino stocks LVS , WYNN, and MLCO with Positive ratings and a bullish industry outlook.” UBS reiterates Costco as buy UBS is sticking with the stock after its earnings report Thursday. ” COST is proving that it is a high performing business regardless of the macro. The company performed exceptionally well before COVID as well as during COVID, and it is once again replicating its superior performance in the post-COVID era.” Goldman Sachs initiates MYR Group as buy Goldman Sachs said it’s bullish on shares of the construction engineering company. “We are initiating coverage of MYRG with a Buy rating and a $164 target price, representing 12% upside from the current price.”
