Image source: PixabayWhat has Wall Street been buzzing about this week? Here are the top 5 buy calls and the top 5 sell calls made by Wall Street’s best analysts during the trading week of April 22-26, 2024. First, here is a look at the top 5 buy calls of the week.
1. Tesla Upgraded to Buy at BofA After Q1 “Clears Deck” of Negative Catalysts
BofA upgraded Tesla (TSLA) to Buy from Neutral with an unchanged price target of $220 after the company reported what the firm says were better-than-expected Q1 results. This, coupled with management commentary, addressed key concerns and “revitalized the growth narrative,” contends the firm, which sees negative catalysts “knocked out” with the Q1 report and positive catalysts building through the rest of the year.
2. Airbnb Upgraded to Buy from Neutral at Mizuho
Mizuho upgraded Airbnb (ABNB) to Buy from Neutral with a price target of $200, up from $150. The potential launch of sponsored listings is expected to generate double-digit EBITDA upside over the long-term, the firm tells investors in a research note.The company’s FY24 consensus room night growth has also been de-risked, leaving limited downside concerns, the firm states. Incremental demand from the Summer Olympics and share gains from elevated hotel pricing should also create opportunities for Airbnb to exceed room night growth estimates, Mizuho added.
3. Benchmark Starts Qualcomm with a Buy, Expects Leadership in AI on Smartphones
Benchmark initiated coverage of Qualcomm (QCOM) with a Buy rating and a $200 price target. As a “wireless industry leader,” the firm believes Qualcomm is “particularly well positioned to capitalize” on the industry’s trends of shifting AI computational inferencing workloads to the very edges of the network.The company is leveraging its strengths in wireless connectivity and computing to “lead the market in the ramp of GenAI smartphones and AI-PCs,” with both likely sparking long-term replacement cycles in their respective markets, Benchmark tells investors.
4. Roblox Upgraded to Overweight at JPMorgan
JPMorgan upgraded Roblox (RBLX) to Overweight from Neutral with a price target of $48, up from $41. Despite addressing concerns about its ability to better monetize users and age up, with 20% bookings growth each of the past four quarters and management committing to 100-300 basis orients of annual margin expansion over the next three to five years, investors remain skeptical around Roblox’s execution, and third-party data has been mixed in recent months, the firm tells investors in a research note.JPMorgan thinks this presents a compelling entry point for a company that is in the process of growing bookings 20%, exiting a heavy investment cycle, and ramping two new revenue streams in advertising commerce in the second half of 2024. The firm believes Roblox has a significant monetization opportunity.
5. Wells Fargo Upgrades Five Below to Overweight, Says Story Not Broken
Wells Fargo upgraded Five Below (FIVE) to Overweight from Equal Weight with an unchanged price target of $180. The company “has had its share of issues and now seems poised to lower guidance against a choppy backdrop,” the firm tells investors in a research note.However, Wells does not believe the story is broken, and says the stock’s risk/reward “looks very good for those with some patience.” Five Below has been outpacing the discretionary comps of most peers, says the firm, which sees the company as an attractive growth name that should get back on track.Next, here are the top 5 sell calls of the week.
1. Monster Beverage Double Downgraded to Sell at Truist
Truist downgraded Monster Beverage (MNST) to Sell from Buy with a price target of $46, down from $65. While the firm still views Monster as “a great company,” it no longer sees it as a high growth story. In addition, Truist believes the Street is too bullish on a gross margin recovery for the company despite structural headwinds, and it sees “no reason why the stock should continue to hold a super premium multiple to its multinational beverage peers.”
2. Wolfe Downgrades Warner Bros. Discovery to Sell on Peak EBITDA Fears
Wolfe Research downgraded Warner Bros. Discovery (WBD) to Underperform from Peer Perform with a $7 price target. The firm says that with 80% of its EBITDA from linear TV and merger synergies done, it fears the company’s EBITDA peaked in 2023.Warner and Max “need fuel to grow, or a new White House to sell.” Wolfe further reduced its 2024E EBITDA forecast by 16% due to weaker studio results, Max’s international investments, and deterioration of linear advertising. It believes Warner Bros. Discovery’s outlook for 2025 and 2026 seems riskier than that of 2023 and 2024.
3. Molson Coors Downgraded to Sell at Citi
Citi downgraded Molson Coors (TAP) to Sell from Neutral with a price target of $56, down from $66. The company is starting to cycle a record year in 2023, which “greatly benefited” from large U.S. market share benefits on the Coors Light and Miller Lite brands from the Bud Light controversy starting in mid-April 2023, the firm tells investors in a research note.Citi says that while Molson has sounded bullish on Q1 trends and spring shelf space resets, it believes cycling a record sales and profit year “could be extremely difficult.” Scanner data for early April suggest sales and volume trends for the company’s beer brands have turned negative, which Citi expects to continue as comparisons get more difficult, the firm notes.
4. Victoria’s Secret Initiated with a Sell at Goldman Sachs
Goldman Sachs initiated coverage of Victoria’s Secret (VSCO) with a Sell rating and a $14 price target. The firm views Victoria’s as a market leader within the intimates category with “several idiosyncratic initiatives” that should help to improve its positioning in the long-term.However, Goldman sees a less attractive risk/reward relative to other companies in the brands and apparel sector over the near-term. The company’s core customer is more price sensitive in comparison to other brands, and it is a relative market share loser to fast-growing competitors, contends the firm.
5. Altice USA Resumed with an Underperform at BofA
BofA resumed coverage of Altice USA (ATUS) with an Underperform rating and a price target of $1.50. Merger speculation initially reported by Bloomberg in late February “has subsided,” and the firm is reassessing the company’s fundamental outlook. BofA believes that Altice USA “remains fundamentally challenged,” and does not believe a sale to Charter (CHTR) is likely in the near-term.More By This Author:Here’s What Wall Street Is Saying About Intel Ahead Of EarningsHere’s What Wall Street Is Saying About Snap Ahead Of Earnings What Wall Street Is Saying About Meta Ahead Of Earnings
