This Week, From The Analyst Community

Stock analysts can provide valuable insight into the sentiment around a certain stock or sector and shed some light on what is possible or likely for a stock.  Stirrings in the analyst community can sometimes be early signs of stock movement.  Which is why our team reviews dozens of analyst research reports each and every day with the goal of finding new investment ideas for our readers. 

Of the hundreds of reports we reference weekly, some stand out among the others for various reasons.  Our team has sifted through this week’s reports and whittled it down to the most pertinent moves.   

Read on for the details on some of the most impactful actions taken by brokerage firms over the past week.  

Monday, July 11th

  • Societe Generale analyst Andrew Lim upgraded Bank of America (BAC) to Buy from Hold with a $37.50 price target. Bank of America is the “highest quality” U.S. universal bank and has the most defensive loan portfolio, Lim tells investors in a research note.
  • Evercore ISI analyst Duane Pfennigwerth upgraded Marriott (MAR) to Outperform from In Line with a price target of $165, down from $180, as he assumed coverage of lodging stocks at the firm. Lodging revenue is normalizing back to pre-pandemic wallet share, in contrast to a consensus view of a pent-up surge, and while equity markets have turned sharply fearful, he believes lodging fundamentals remain attractive with a longer recovery trajectory and duration, said Pfennigwerth.
  • Needham analyst Laura Martin downgraded Meta Platforms (META) to Underperform from Hold. The company’s fundamentals are deteriorating in the short term as it has signaled its investment in the Metaverse at the same time as it guided its revenue growth to slow, the analyst tells investors in a research note.
  • Wedbush analyst Jay McCanless assumed coverage of Opendoor Technologies (OPEN) with an Outperform rating with a price target of $9, down from $13. He anticipates Opendoor to achieve the low end of management’s revenue guidance for Q2, but come in below the AEBITDA guidance, said McCanless, who thinks a slower pace of national housing activity that began in May likely weighed on results.

Tuesday, July 12th

  • Citi analyst Keith Horowitz upgraded JPMorgan (JPM) to Buy from Neutral with a price target of $135, down from $145. The analyst believes investors will “look to high-quality franchises with strong management teams and a sound balance sheet” in the current environment.
  • Susquehanna analyst Christopher Stathoulopoulos upgraded Southwest (LUV) to Positive from Neutral with a $45 price target, which he notes represents about 23% upside. Coming out of Southwest’s investor day in December 2021, his primary concern had been around the FY22 CASM-ex guidance and specifically whether the company would be able to drive margin recovery into 2023, but he believes that various revenue initiatives, including its new fare class and push into corporate travel, should help support recovery into 2023.
  • Morgan Stanley analyst Betsy Graseck downgraded American Express (AXP) to Equal Weight from Overweight with a price target of $143, down from $223. Graseck is cutting estimates across her U.S. banks and consumer finance coverage as recession risks rise and “taking some consumer chips off the table.”
  • Oppenheimer analyst Dominick Gabriele downgraded Capital One Financial (COF) to Perform from Outperform without a price target. The company’s tangible book value growth has been “fairly stagnant” and its “upside/downside valuation” is “not exciting,” Gabriele tells investors in a research note. Capital One was also downgraded to Equal Weight from Overweight by Morgan Stanley’s Betty Graseck.
  • Citi analyst Keith Horowitz downgraded Regions Financial (RF) to Neutral from Buy with a price target of $20, down from $25. The shares have outperformed this year and with “limited” positive earnings revisions and peer group multiple expansion, there are now better ways to play the sector, Horowitz tells investors in a research note.

Wednesday, July 13th

  • Raymond James analyst Olivia Tong initiated coverage of Clorox (CLX) with an Outperform rating and $160 price target. While market sentiment has been negative on Clorox post-pandemic, Tong thinks that even with its challenges risk/reward is attractive and sees more potential for upside than downside and has less downside risk relative to many of its peers over the next 12 months, the analyst tells investors in a research note.
  • Baird analyst William Power initiated coverage of Snowflake (SNOW) with an Outperform rating and $200 price target. The company provides a “revolutionary” cloud-native platform for managing and analyzing data that is “rapidly taking share” from legacy data providers, Power tells investors in a research note.

Thursday, July 14th

  • Rosenblatt analyst Barton Crockett upgraded Twitter (TWTR) to Buy from Neutral with a price target of $52, up from $33, after having reviewed new, more detailed disclosures in Twitter’s lawsuit against Elon Musk. His “former skepticism about Twitter has been flipped” as Twitter’s disclosure of very detailed efforts to explain its spam bot calculations to Musk, and Musk’s reluctance to engage, now “instead makes us skeptical about Musk,” Crockett tells investors.
  • Deutsche Bank analyst Krisztina Katai upgraded Costco (COST) to Buy from Hold with a $579 price target. Costco is one of the most consistent operators in the group, and its steady traffic gains and high membership renewal rates “serve as key differentiators in an increasingly uncertain backdrop,” Katai tells investors in a research note.
  • BMO Capital analyst Ambrish Srivastava upgraded AMD (AMD) to Outperform from Market Perform with a price target of $115, up from $100. The analyst sees a “sustainable compute franchise as a result of continued superior execution on all fronts under Dr. Su’s leadership.”
  • Citi analyst Paul Lejuez downgraded Dollar General (DG) to Neutral from Buy with an unchanged price target of $258. While Dollar General is a “defensive stock to own in an uncertain environment,” trading at 14.1 times estimated fiscal 2023 EBITDA, many already appreciate its defensive characteristics, Lejuez tells investors in a research note.
  • Truist analyst William Stein initiated coverage of Tesla (TSLA) with a Buy rating and $1,000 price target. He expects Tesla to “capture the pole position” in terms of unit share among EV auto makers and also contends that Tesla has “significant, under-appreciated” margin upside potential.

Friday, July 15th

  • Edward Jones analyst Logan Purk upgraded Qualcomm (QCOM) to Buy from Hold saying the stock does not fully reflect his growth outlook. Qualcomm is the industry leader in 5G technology and will participate in the global adoption of 5G handsets, Purk tells investors in a research note.
  • Argus analyst John Staszak downgraded Delta Air Lines (DAL) to Hold from Buy after its Q2 earnings miss, saying the company has been impacted by capacity reductions and staffing shortages. While he expects flight demand to remain solid over the remainder of the year, ticket prices should level off as industry capacity expands, the analyst tells investors in a research note.
  • Piper Sandler analyst Matt Farrell initiated coverage of Eventbrite (EB) with an Overweight rating and $13 price target. Coming out of the pandemic, management has refocused its strategy on frequent creators, right sized the financial model, and added a creator marketing solution in Boost, Farrell tells investors in a research note.

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