Boeing upgraded, Arm initiated: 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:

• Deutsche Bank upgraded Boeing (BA) to Buy from Hold with a price target of $270, up from $204, which offers 30% upside. Aircraft deliveries are accelerating and there’s a credible case to be made that this improved performance can be sustained, the firm says.
• BofA upgraded Penn Entertainment (PENN) to Buy from Neutral with a price target of $30, up from $27. The firm thinks ESPN Bet “creates an asymmetric risk-reward,” noting that initial download and app activity have been much stronger than anticipated and its initial offers are showing promotional discipline, while also citing stable Q3 earnings being better than expected for Penn’s core gaming business.
• Jefferies upgraded Six Flags (SIX) to Buy from Hold with a price target of $32, up from $25. The firm says the merger of Cedar Fair (FUN) and Six Flags materially increases value for Six Flags holders.
• JPMorgan upgraded Dutch Bros (BROS) to Overweight from Neutral with a price target of $35, up from $30. The company now has strong available liquidity comprised of $150M of cash and $350M of availability under its undrawn revolver plus a $200M undrawn delayed draw term loan to provide funding comfort until turning free cash flow positive in 2027, the firm says.
• JPMorgan upgraded Novocure (NVCR) to Neutral from Underweight with a $15 price target after reinstating coverage of the name. After a sharp selloff year-to-date, Novocure’s valuation is supported by a base business, incremental revenue from expansion into second line lung cancer, and some risk-adjusted potential to expand into brain mets and pancreatic cancer, the firm says.

Top 5 Downgrades:

• Wells Fargo downgraded Spectrum Brands (SPB) to Equal Weight from Overweight with a price target of $73, down from $90. The firm believes that a fundamental phase may take time.
• Wedbush downgraded KB Home (KBH) to Neutral from Outperform with a $55 price target. The firm notes the shares are within 5% of its unchanged price target, and Wedbush does not see an evolving catalyst to increase it.
• JPMorgan downgraded Krispy Kreme (DNUT) to Neutral from Overweight with an unchanged price target of $13. The firm cites valuation for the downgrade with the shares up 26% year-to-date.
• B. Riley downgraded Children’s Place (PLCE) to Neutral from Buy with a price target of $19, down from $45. The go-forward gross margin and cost structure required to satisfy Children’s Place’s transformed revenue model is “much different, more complicated, and less advantageous” than the company’s second half of 2023 guidance issued in August contemplated, the firm tells investors in a research note.
• Argus downgraded Adtran (ADTN) to Hold from Buy after the company posted Q3 revenue that missed guidance and the “formerly high-yielding company” paused its dividend as part of a restructuring program.

Top 5 Initiations:

• Wells Fargo initiated coverage of Arm (ARM) with an Overweight rating and $70 price target. Arm has been the leading innovator in RISC-based compute since its founding and can continue the momentum well into the future by taking compute share, the firm tells investors in a research note.
• BTIG initiated coverage of Global Payments (GPN) with a Buy rating and $135 price target. Global Payments’ global payments infrastructure enables more than 66B transactions per year, services 4M merchant locations, and the stock presents investors with an attractive entry point, the firm tells investors in a research note.
• Wells Fargo initiated coverage of ZipRecruiter (ZIP) with an Overweight rating and $15 price target. The firm believes the company’s artificial intelligence-powered technology gives it a competitive advantage.
• HSBC initiated coverage of Caterpillar (CAT) with a Hold rating and $250 price target. The firm sees the company’s profits falling in 2024, saying infrastructure-related bills will take time to play out and slowdown signs emerge.
• Citi initiated coverage of Equifax (EFX) with a Buy rating and $243 price target. The firm says the consensus estimates underappreciate the likely impact on Equifax’s adjusted EBITDA arising from a rebound in the U.S. mortgage market, which it believes is running near lows seen in the Great Financial Crisis.