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Here are Wednesday’s biggest calls on Wall Street: Goldman Sachs lowers price target on Tesla to $1,000 from $1,200 Goldman lowered its price target on the automaker to $1,000 per share from $1,200, but kept its buy rating to “better reflect additional supply chain constraints in the near-term, and weaker demand in the intermediate term.” “For Tesla , we assume delivery growth well below the company’s longer-term target of 50% or more, and also lower margins given higher input costs.” BMO initiates MP Materials as outperform BMO said in its initiation of the rare-earths materials company that it sees an attractive risk/reward. “We expect MP to benefit from persistent tightness and robust pricing for magnet rare earth products fueled by the energy transition (EVs, wind turbines, etc.). We see attractive risk-reward currently as MP expands downstream for long-term growth and Chinese supply chain circumvention.” Piper Sandler downgrades Tempur Sealy to neutral from overweight Piper said it’s concerned about slower-than-expected sales for the mattress company. “We are downgrading shares of TPX to Neutral and lowering our PT to $28 following a round of checks for Memorial Day weekend (MDW) that suggest a disappointing selling period.” Wells Fargo reiterates Bank of America as overweight Wells said that a recession is already priced into shares of the stock. “We reiterate our Overweight rating on BAC and see a favorable reward-to-risk scenario of at least 3-to-1 and a weighted avg. return for the stock of up 40% assuming a one-third chance of recession.” KeyBanc reiterates Netflix as sector weight KeyBanc said it’s staying cautious on the stock as any positive catalysts are “unlikely to manifest meaningfully” until 2023. “Based on country rank and broader data (app, search queries), we believe it is too early to conclude paid net adds could outperform our/Street estimates for 2Q losses of 2M subs. We reiterate our Sector Weight rating as we believe catalysts (e.g., ad progress, improved FCF) are unlikely to manifest meaningfully in estimates until 2H23.” JPMorgan reiterates Amazon as a best idea JPMorgan said it sees growth reaccelerating in the second half for the e-commerce giant. “While AMZN’s share of US e-commerce could dip modestly in 2022, we believe the company has gained ~650bps of share since 2018. We continue to believe revenue growth should reaccelerate in 2H22 as comps ease & AMZN gains greater penetration in grocery, CPG, apparel & accessories, & furniture/appliances/equipment.” Wells Fargo reiterates Warner Bros Discovery as overweight Wells said the media and entertainment company is a solid opportunity for “patient” investors. “We think WBD is a great opportunity for patient investors given excellent content assets + a management track record of merger execution. Near term, it’s a lot of noise, so while we like it, we think a future investor day is the indicator for a positive catalyst path.” Atlantic Equities downgrades Medtronic to neutral from overweight Atlantic Equities said it sees “no path to cleaner execution” in its downgrade of the med tech company. ” Medtronic’s stock has materially outperformed its closest interventional med-tech peers year-to-date and as such, the valuation gap has closed and in our opinion no longer fully discounts recent execution issues.” Wells Fargo reiterates Nike as overweight Wells kept its overweight rating on the athletic retailer, but says its recent survey checks show the situation in China remains “tough.” “Based on our checks, our key takes are 1) trends in NKE ‘s 4Q (end May) are likely to be tough, with our model looking for regional revenues of $1.82B vs. consensus’ $1.93B; 2) consumer spending in the region is unlikely to be like 2020’s post-lockdown pop given the nature of the recent lockdowns.” JPMorgan downgrades Sealed Air to underweight from neutral JPMorgan said in its downgrade of the packaging company that it sees better investments elsewhere. “Our change of rating for Sealed Air does not reflect pessimism concerning Sealed Air’s business prospects but reflects our inclination to invest in other equities in the various material sub-sectors.” JMP initiates Etsy as market outperform JMP said the e-commerce company has increased its “brand awareness.” ” ETSY’ s platform has been one of the top performers throughout and exiting the pandemic. We view its increase in brand awareness as lasting as opposed to transitory and see plenty of opportunity for ETSY to continue driving GMV (gross margin value) growth through further improvement of brand awareness, geographic expansion, and technology investments.” Read more about this call here . RBC upgrades Danaher to outperform from sector perform RBC said in its upgrade of the manufacturer of medical and industrial products that it sees an “attractive entry point.” “We are upgrading Danaher from Sector Perform to Outperform as we believe that its high quality, defensive portfolio looks incrementally more attractive given the higher Wall of Worry/macro fears.” Read more about this call here. JMP reiterates Amazon as market outperform After a change in analyst coverage, JMP reiterated its outperform rating on the e-commerce giant and said the stock is “well-positioned to navigate inflationary headwinds.” “Though near-term e-commerce pressures will likely impact AMZN, we view it as well positioned to navigate inflationary headwinds and likely to show resilience through a potential recession. Recent headlines indicate AMZN is revisiting its real estate footprint, aiming to exit some leases. Accordingly, we look for margin expansion in 2H22 and 2023.” Barclays initiates Corteva as overweight Barclays said in its initiation of Corteva that elevated demand will benefit fertilizer stocks. “Overall we are constructive on the companies’ potential to maintain a strong profit momentum. We see tightness in both the grain and fertilizer markets lasting beyond 2023; any return to normality, we believe, would have to come from an end to sanctions over time rather than declining demand, as we believe demand pull will remain elevated.” Wells Fargo reiterates Procter & Gamble as overweight Wells said investors should buy the dip in the home and personal care products company. “Big picture: in a volatile backdrop with debates lingering on consumer demand, we see opportunity again on PG after recent underperformance, offering potential to migrate back to a portfolio with the most momentum in HPC.” Citi opens a catalyst watch on Ford Citi said its survey checks show indicate more upside for the stock. “As a result, we’re opening a 90-Day Upside Catalyst Watch on Ford and another on Autoliv, as we believe a NT (near term) scenario that sees reassuring U.S. auto data points would benefit both stocks.” Bank of America names Nvidia a top pick Bank of America that semiconductor stocks such as Nvidia look “compelling.” “Our top picks serve end-markets where we expect spending/content growth drivers to be most resilient, such as in cloud computing/AI, high-end industrial, EV/advanced driver assist systems and in rising chip complexity.” Read more about this call here. Morgan Stanley upgrades Visteon to equal weight from under weight Morgan Stanley said it thinks the stock will hold up “better in the current environment” than other companies in the firms coverage. ” VC offers investors a way to play production recovery in a propulsion agnostic manner, but one that skews to industry mega-trends of digital cockpits and electrification.” Morgan Stanley reiterates Amazon, Meta and Alphabet as overweight Morgan Stanley lowered its estimates and price targets on several tech and internet stocks on Tuesday night, noting it sees “growing signals of macro and sector-level slowing.” “Rising macro and micro uncertainty lead us to take a more conservative base case online ad/e-commerce view as we lower ests. Our 4-year CAGR work shows how this also may just mean reversion. Even post cuts, blue-chip FB / AMZN / GOOGL have 30%+ upside from depressed levels.”
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