Disney, MicroStrategy 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:

• UBS upgraded Cloudflare (NET) to Neutral from Sell with a price target of $82, up from $76. The firm sees a more balanced risk/reward for the shares given the company’s go-to-market momentum, better secure access service edge checks, the Q1 guide-down and the stock’s valuation de-rating.
• Wells Fargo upgraded Capri Holdings (CPRI) to Overweight from Equal Weight with a price target of $43, down from $57. With concern around the Federal Trade Commission’s challenge to the proposed acquisition of Capri by Tapestry (TPR), investors have lost sight of the value in the Capri portfolio, the analyst says.
• Jefferies upgraded Comtech (CMTL) to Hold from Underperform with an unchanged price target of $3.50. The company last week announced a new credit facility, which takes the near-term balance sheet risk off the table, the analyst tells investors in a research note.
• TD Cowen upgraded Gap (GPS) to Buy from Hold with a price target of $30, up from $28. The firm says Gap is in the “early innings” of a transformation across all four of its brands and its growth potential is underappreciated.
• Loop Capital upgraded Honest Company (HNST) to Buy from Hold with an unchanged price target of $3. The shares have declined 26% year-to-date despite “healthy” Q1 sales growth, profitability improvements, and a solid balance sheet, says the firm.

Top 5 Downgrades:

• Raymond James downgraded Penn Entertainment (PENN) to Market Perform from Outperform without a price target. The analyst cites valuation for the downgrade, saying recent activist pressure and takeover rumors have pushed shares up 21% since May 20.
• Oppenheimer downgraded ResMed (RMD) to Perform from Outperform without a price target. The firm envisions an “airpocket” for the shares following the SURMOUNT-OSA dataset.
• Morgan Stanley downgraded DoubleVerify (DV) to Equal Weight from Overweight with a price target of $21, down from $40. The company’s “disappointing” Q1 results and fiscal 2024 guidance raise questions about its growth outlook, says the firm.
• Evercore ISI downgraded Hub Group (HUBG) to In Line from Outperform with a $44 price target. The firm’s estimates for Hub are broadly unchanged and the firm still forecasts material EPS growth next year, but after material relative outperformance over the last three months, the stock is nearing the firm’s price target.
• Evercore ISI downgraded Old Dominion (ODFL) to In Line from Outperform with a price target of $196, down from $225. Even though the demand prospects are likely better for the next 12 months than they were 13 months ago, the firm recommends moving back to the sidelines, citing its belief that estimates are “far too high” for Q3 and Q4.

Top 5 Initiations:

• Goldman Sachs initiated coverage of Disney (DIS) with a Buy rating and $125 price target as part of a broader research note on U.S. Media names. The U.S. media industry is in a state of transition given increasing content competition from streaming, social, and mega tech as well as technology disruptions in distribution, and the firm prefers U.S. media stocks with deep competitive moats that should provide better visibility into growth, the analyst tells investors in a research note.
• Maxim initiated coverage of MicroStrategy (MSTR) with a Buy rating and $1,835 price target. MicroStrategy’s long-standing position delivering analytics software to enterprises makes it “a unique platform” to integrate artificial intelligence, while the company has also accumulated 226,331 bitcoin as of June 20, currently valued at about $13.4B and representing 55% of the stock’s value, the analyst tells investors.
• Guggenheim initiated coverage of Rivian Automotive (RIVN) with a Buy rating and $18 price target. The firm sees a “credible path” to breakeven gross margin in Q4 and believes an inflection in financials should support the stock in the near term.
• JPMorgan reinstated coverage of eBay (EBAY) with an unchanged Neutral rating and price target of $60, up from $48, following a period of restriction. The company continues to execute against its strategy to deliver relevant experiences, scalable solutions, and product innovations, and its gross merchandise volume growth has improved to flattish year-over-year in the last three quarters, the analyst tells investors in a research note.
• Oppenheimer initiated coverage of Clearside Biomedical (CLSD) with an Outperform rating and $5 price target. The firm calls Clearside “a pioneer in suprachoroidal delivery” via its suprachoroidal Microinjector that improves delivery of therapies for retinal diseases.