Palo Alto upgraded, Li Auto downgraded: 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:

• BofA upgraded Palo Alto Networks (PANW) to Buy from Neutral with an unchanged price target of $215 following what the firm calls “impressive performance on all fronts” in fiscal Q4. Guidance was generally above expectations as well and at a high level, the company’s strategy “appears to be working well,” the analyst tells investors.
• Evercore ISI upgraded Caterpillar (CAT) to Outperform from In Line with a $476 price target. The firm cites the company’s resilient construction equipment margins and volume leverage for the upgrade.
• Stifel upgraded Target Hospitality (TH) to Buy from Hold with a price target of $11, up from $7.50. The firm assumes the company will operate 5,000 rooms for data center customers and 3,400 for government services over the next few years. 
• Barclays upgraded Aveanna (AVAH) to Overweight from Equal Weight with a price target of $9.50, up from $5.50. The company reported a “thesis changing quarter” that erased concerns over regulation, the analyst tells investors in a research note. UBS also upgraded Aveanna to Neutral from Sell with a price target of $8, up from $6.75. 
• BMO Capital upgraded Crown Castle (CCI) to Outperform from Market Perform with a price target of $120, up from $115. The company has “done the heavy lifting” with the sale of its fiber business, the analyst tells investors in a research note. 

Top 5 Downgrades:

• Bernstein downgraded Li Auto (LI) to Market Perform from Outperform with a price target of $26, down from $33. The firm sees rising competition in premium electric SUVs and challenges in the “crowded” battery electric vehicle market pressuring the company’s outlook. 
• KeyBanc downgraded EPR Properties (EPR) to Sector Weight from Overweight without a price target. The firm cites valuation for the downgrade.
• Piper Sandler downgraded Prairie Operating (PROP) to Neutral from Overweight with a price target of $3, down from $9. The company reported “disappointing” results and reduced its fiscal 2025 production guidance, the analyst tells investors in a research note.
• Brookline downgraded Rein Therapeutics (RNTX) to Hold from Buy without a price target. The company’s Q2 update was “disappointing” as it is is still waiting for a meeting with the FDA regarding the clinical hold of the Phase 2 RENEW trial, the analyst says.
• Morgan Stanley downgraded Femsa (FMX) to Equal Weight from Overweight with a price target of $97, down from $132. The firm says the Overweight thesis is no longer justified despite the stock’s 25% drop this year following the Q2 miss. 

Top 5 Initiations:

• William Blair initiated coverage of Thermo Fisher (TMO) with an Outperform rating and no price target. The firm believes the company’s “one-stop-shop” pharma partnership strategy will drive multiple expansion. 
• BTIG initiated coverage of Rocket Companies (RKT) with a Buy rating and $25 price target as part of a broader research note launching coverage of Residential Mortgage Finance. The growth and evolution of the industry feeds into the firm’s current thesis, the analyst tells investors in a research note. 
• Piper Sandler initiated coverage of Tango Therapeutics (TNGX) with an Overweight rating and $11 price target. The firm thinks investors are starting to regain confidence in the synthetic lethality space and see potential for Tango’s TNG462 following the positive competitor readthrough presented at ASCO earlier this year.
• Needham initiated coverage of Ondas (ONDS) with a Buy rating and $5 price target, while adding the stock to the Needham Conviction List. The unmanned aerial systems industry is entering a multi-year supercycle, says the analyst, who views Ondas as “one of the best-positioned U.S. based pure-play drone companies.” 
• Needham initiated coverage of AeroVironment (AVAV) with a Buy rating and $300 price target. AeroViroment is “uniquely positioned to see industry leading growth” given continued share gains, increasing manufacturing capacity and a portfolio “strongly aligned with the unprecedented global defense spending initiatives,” the firm says.