Apple upgraded, Tesla downgraded: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly.

Top 5 Upgrades:

• Bernstein upgraded Apple (AAPL) to Outperform from Market Perform with an unchanged price target of $195. Bernstein believes replacement cycle tailwinds and incremental generative artificial intelligence features set up Apple well for a strong iPhone 16 cycle.
• Citi upgraded Shopify (SHOP) to Buy from Neutral with a price target of $105, up from $93. The firm has confidence in Shopify’s near-term results following a recent round of conference visits and channel checks, which highlight a more resilient e-commerce backdrop and accelerated share gains up market.
• Seaport Research upgraded Roku (ROKU) to Buy from Neutral with a $74 price target following last week’s Q1 report. The stock’s risk/reward is attractive for a company central to the connected TV advertising market, which should grow advertising in the low-double-digits this year, the firm tells investors in a research note.
• Jefferies upgraded General Dynamics (GD) to Buy from Hold with a price target of $335, up from $305. The firm expects the company’s Gulfstream revenue to grow revenue 40% in 2024, supporting total General Dynamics growth of 10% in 2024 and 2% in 2025.
• Barclays upgraded AT&T (T) to Overweight from Equal Weight with an unchanged price target of $20. The firm says the Q1 results reinforced the structural push towards cable and telecom convergence, which may benefit telecom near term “but may not end well for either industry in the long run.”

Top 5 Downgrades:

• Phillip Securities downgraded Tesla (TSLA) to Reduce from Neutral with a price target of $145, down from $175, citing the company’s Q1 results that were below expectations due to slower vehicle deliveries and pricing pressures.
• Jefferies downgraded Southwest (LUV) to Underperform from Hold with a price target of $20, down from $28. The company’s Q1 revenue per available seat mile missed the lowered guide set just three weeks before quarter end, the firm tells investors in a research note.
• Barclays downgraded Lululemon (LULU) to Equal Weight from Overweight with a price target of $395, down from $546. The company’s Americas growth, while still solidly positive, is decelerating, offset by China, the firm tells investors in a research note.
• Barclays downgraded Ulta Beauty (ULTA) to Equal Weight from Overweight with a price target of $434, down from $612. The firm cites increased competition and distribution points, specifically in off-mall brick-and-mortar within the company’s beauty segment, material slowing in comps year-to-date with earlier and faster slowing in the beauty segment, elevated promotions based on its proprietary promotional checks, and potential risk to its second half of 2024 guidance for the downgrade.
• Wells Fargo downgraded SLB (SLB) to Equal Weight from Overweight with a price target of $53, down from $68. The firm views SLB’s acquisition of ChampionX (CHX) as modestly accretive to earnings but dilutive to overall valuation and margins.

Top 5 Initiations:

• OTR Global initiated coverage of Reddit (RDDT) with a Positive view, stating that its checks found that advertisement spending on Reddit at least met expectations for North American advertising sources during Q1.
• Citi initiated coverage of Pinnacle West (PNW) with a Neutral rating and $78 price target. The firm says potential structural regulatory reform in Arizona towards formula rates is possible but not likely in the next year due to the elections.
• JMP Securities initiated coverage of Dave (DAVE) with an Outperform rating and $70 price target. The firm says Dave has achieved financial stability after reaching adjusted EBITDA profitability, positioning it as a “promising investment opportunity as it continues to evolve its offerings and expand in the large marketplace.”
• Piper Sandler initiated coverage of Abivax (ABVX) with an Overweight rating and $42 price target. The company’s lead molecule obefazimod, with its differentiated mechanism, competitive efficacy, and superior safety, is poised to emerge as a potential category leader in inflammatory bowel diseases, the firm tells investors in a research note. Guggenheim also started coverage of Abivax with a Buy rating and $50 price target.
• Leerink initiated coverage of Neurogene (NGNE) with an Outperform rating and $46 price target. The firm explicitly models NGN-401 for Rett syndrome, accounting for potential gene therapy competition, though it believes NGN-401 is likely to differentiate from key competitor Taysha Gene Therapies (TSHA) over time based on tighter control of gene expression in this indication with a narrow therapeutic window.