Kratos, CVS Health 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:

• Baird upgraded CVS Health (CVS) to Outperform from Neutral with a price target of $82, up from $71. The firm has growing confidence in a turnaround at the company’s Health Care Benefits segment following the Q2 report.
• BofA upgraded Sherwin-Williams (SHW) to Neutral from Underperform with a price target of $375, up from $296. Same-store sales growth has declined to 0.8%, while Q2 results and guidance fell short of expectations, but from here, BofA does not see anything that would make shares materially underperform.
• BTIG upgraded Kratos Defense (KTOS) to Buy from Neutral with an $80 price target. With the company having been down selected for the Marine Corps’ MUX TACAIR program, the firm has conviction that Kratos could see significant growth at Unmanned Systems in the coming year given funding currently earmarked for the program in FY26 and the broader, roughly $8.8B unmanned request, the firm tells investors.
• BofA upgraded Dow Inc. (DOW) to Neutral from Underperform with an unchanged price target of $25. When the firm previously downgraded Dow in April it had been concerned about downside to earnings forecasts and risk to the dividend, but Street estimates have moved lower since then, Q2 results reflected the tougher market conditions and Dow has also cut its dividend to “a more manageable level,” the firm tells investors.
• BofA upgraded RPM (RPM) to Neutral from Underperform with a price target of $128, up from $110, following a fiscal Q4 beat and “strong” sales and margin outlook. While the firm’s prior Underperform thesis was predicated on fears of a slowing macro and a pullback of industrial capital investment on the back of new government tariffs, this “did not present itself as an issue” for the quarter ended May 31, the firm tells investors.

Top 5 Downgrades:

• Argus downgraded eBay (EBAY) to Hold from Buy with no price target. The stock is up nearly 30% since the company reported 7% growth in net income and 6% increase in revenue in Q2 as it continues to roll out new and enhanced tech solutions, including those underpinned by new generative AI models, the firm tells investors in a research note.
• Erste Group downgraded IBM (IBM) to Hold from Buy. Sales growth is “well below” the sector average, which is not expected to change this year, and the current valuation is “high in view of the below-average growth prospects,” the firm tells investors.
• BofA downgraded Ibotta (IBTA) to Underperform from Neutral with a price target of $24, down from $57. Ibotta reported “significantly weaker-than-expected” Q2 results and Q3 revenue guidance due to the decision by two clients testing the company’s new performance marketing model to pause spend in the program as well as tough industry conditions constraining promotional supply, the firm tells investors. Goldman Sachs, Citizens JMP, Evercore ISI and Wells Fargo also downgraded the stock but to Neutral-equivalent ratings.
• Erste Group downgraded Fortinet (FTNT) to Hold from Buy. Sales growth in the coming year will be lower than this year and the operating margin is below that of the peer group, which is not expected to change in the next two years, the firm tells investors.
• BofA downgraded Coherent (COHR) to Neutral from Buy with a price target of $105, up from $92, citing decelerating growth in its data center business as well as “modest” gross margin trends despite multiple restructuring actions.

Top 5 Initiations:

• Erste Group resumed coverage of Micron (MU) with a Buy rating after having the stock Under Review. Micron’s positive update to Q4 guidance was “a significantly better development than previously expected,” says the firm, which adds that the stock is “valued favorably in view of the good growth prospects.”
• Erste Group resumed coverage of Lam Research (LRCX) with a Buy rating after having the stock Under Review. Lam is benefiting from the growing market for special machines for the manufacture of semiconductor wafers, while the company has a higher return on equity and also a higher operating margin than its peer group, the firm tells investors.
• UBS initiated coverage of SiTime (SITM) with a Buy rating and $260 price target. The firm expects SiTime will be one of the fastest growing semiconductor companies over the next few years, led by artificial intelligence and its new silicon-based solutions.
• Piper Sandler analyst John Barnidge assumed coverage of Lemonade (LMND) with a Neutral rating and $55 price target. Piper believes the valuation is reflective of meaningful improvement in the leading direct-to-consumer provider of personal lines products in the U.S.
• Morgan Stanley resumed coverage of Rocket Companies (RKT) with an Equal Weight rating and $16 price target. The firm sees a less compelling risk/reward following the stock’s 50% rally.