CoreWeave initiated, Carvana upgraded: 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:

• Morgan Stanley upgraded Carvana (CVNA) to Overweight from Equal Weight with a price target of $280, up from $260. A sharp pullback in the share price presents “a unique opportunity for investors to gain exposure to a leader in auto retail and fleet fulfillment,” says the firm, which recent site visit reinforced the company’s competitive advantages.
• BTIG upgraded CrowdStrike (CRWD) to Buy from Neutral with a $431 price target. With the July 19, 2024 IT outage now eight months in the “rearview mirror,” CrowdStrike “has much better visibility on forecasts,” the firm tells investors in a research note.
• BTIG upgraded Capital One (COF) to Buy from Neutral with a $208 price target. If the merger fails between Capital One and Discover (DFS), the firm thinks Capital One shares are worth $208 and the firm’s current price target reflects that view. However, if the merger does go through, the firm thinks Capital One shares are worth $427.
• BofA double upgraded Cloudflare (NET) to Buy from Underperform with a price target of $160, up from $60. The firm identifies two catalysts underpinning growth acceleration, namely a differentiated approach to AI and the company gaining momentum in network security, particularly Secure Access Service Edge.
• Raymond James upgraded HealthEquity (HQY) to Strong Buy from Outperform with a price target of $115, down from $120. The firm expects HealthEquity to utilize its share repurchase program to capitalize on the recent weakness.

Top 5 Downgrades:

• BTIG downgraded Ally Financial (ALLY) to Sell from Neutral with a $30 price target. The firm is expecting a guide-down when Ally reports Q1 earnings, and is 32% below consensus on Q1 earnings, primarily from interest income.
• Jefferies double downgraded Opthea (OPT) to Underperform from Buy with a price target of $1, down from $8, after the company announced that its Eylea combo trial failed to meet its primary endpoint. Leerink and H.C. Wainwright also downgraded the stock to Neutral-equivalent ratings.
• Morgan Stanley downgraded Brown & Brown (BRO) to Equal Weight from Overweight with an unchanged price target of $128. The firm says that given Brown & Brown’s strong year-to-date price performance, the stock’s valuation is now more in-line with its expectations.
• Mizuho downgraded EOG Resources (EOG) to Neutral from Outperform with a price target of $140, down from $148. The firm reduced its net asset value for the shares to reflect lower go-forward cash margins based on the company’s 2025 guidance verses 2024 levels when normalized for commodity prices.
• Citi downgraded Azek (AZEK) to Neutral from Buy with a price target of $51.50, down from $61, following James Hardie’s (JHX) announced acquisition of the company.

Top 5 Initiations:

• DA Davidson initiated coverage of CoreWeave (CRWV) with a Neutral rating and $47 price target. The company is the largest in the new neocloud category, but the firm views it as a “highly levered” way for Microsoft (MSFT) to offload less desirable workloads and NVIDIA (NVDA) to leverage a small investment into a very large customer.
• Berenberg initiated coverage of Coty (COTY) with a Buy rating and $7.50 price target. The firm expects beauty growth in developed markets to revert to the 3%-3.5% range, China to stabilize in the first half of 2025 and return to growth in the second half, and emerging markets to grow by 8% this year.
• Redburn Atlantic initiated coverage of Aon plc (AON) with a Neutral rating and $445 price target, offering 14% potential upside. Redburn’s positive structural industry outlook is offset by caution regarding the company’s sensitivity to pricing and its historical performance in commercial risk, which has consistently underperformed that of its closest peer Marsh, the firm tells investors in a research note.
• Redburn Atlantic initiated coverage of Arthur J. Gallagher (AJG) with a Neutral rating and $352 price target, offering 8% potential upside. Gallagher has emerged as one of the most compelling success stories in the insurance brokerage industry over the past decade, the firm tells investors in a research note.
• Evercore ISI initiated coverage of OneMain (OMF) with an In Line rating and $58 price target and added the stock to the firm’s “Tactical Underperform” list. OneMain is “on a path of improvement after several years of elevated losses,” but the road ahead is not without risk given the sensitivity of OneMain’s lower income customers to economic stress, the firm tells investors.