Apple, Exxon, McDonald’s, Microsoft, Uber
These are the Wall Street’s top calls Tuesday: UBS reiterates McDonald’s, as UBS stated that McDonald’s “favorable branding should support sales” and increase share resilience. MCD should be seen as a defensive compounder of high quality that can withstand pressured consumer spending. We believe MCD has the potential to sustain its sales momentum given these relative advantages. Evercore ISI upgrade Exxon for outperformance from in line Evercore stated that Exxon has several potential catalysts and is in a good position. Key name when it comes to Energy vs. Market. The path to doubling earnings is likely to continue to be central and achievable. This call is more detailed here. Deutsche Bank buys McKesson from Hold Deutsche stated that McKesson, a medical- and pharmaceutical product company, has a very attractive value. MCK’s medium- and near-term earnings outlook is uncertain. Issues that used to be tailwinds have now become headwinds. Now, they could turn back into tailwinds. Evercore ISI drops Occidental Petroleum from Outperform to Inline. Evercore also downgraded the valuation of this hydrocarbon exploration firm. A quality upstream portfolio that is oil-leveraged with unique growth drivers, is complemented by an extended cycle for OXY’s chemicals company, the cessation midstream headwinds and a growing low carbon enterprise. We believe these tailwinds have been captured by the stock’s strong performance year-to-date. New headwinds, such as the $4/sh annual pref equity cap that caps shareholders’ returns on capital, are expected to emerge. Morgan Stanley maintains Microsoft’s overweight status. Morgan Stanley noted that Microsoft remains very attractive, regardless of its current valuation. “While we continue to see solid demand trends in Microsoft’s commercial segments ( > 65% of gross margin $’s), updated FX guidance and weaker PC data points lead us to clean up our forward forecasts, bringing down our FY23 EPS estimate by $0.09 to $10.84.” Berenberg upgrades Liberty Global, allowing it to be bought from hold Berenberg declared in its update of the telecoms company that the stock was “compelling.” Since 2018, when we began coverage on Liberty Global, this is the first upgrade of Liberty Global. We will Buy (from Hold). Its growth will be boosted by price increases in the short term. In the medium term, the realisation of M & A synergies in the UK and Switzerland will improve profitability.” Wells Fargo makes Lear overweight. We are increasing LEA’s weight from Overweight to Equal Weight. The upgrade reflects 1) compelling valuation, 2) strong EPS growth, and 3) EV tailwinds & optionality.’ Morgan Stanley identifies Alphabet, Uber, and Lyft as overweight. The company’s latest surveys show strong travel demand which is good news for Alphabet. According to the latest AlphaWise data, 58% expect to travel in the next 6 months. Only 81% households of higher income are planning to travel. Inflation concerns should be closely monitored. Travel is the area that people expect to see a decrease in, but overall we still believe it’s OW UBER, EW BKNG, and strategically positive. UBS announces Marqeta. Marqeta continues to be poised for growth in the secular shift towards card-based cash payments. It will also win new high-growth clients and take advantage of Block’s expanding customer base. Jefferies buys Rio Tinto from Hold Jefferies upgraded several mining companies’ on Tuesday. They said Rio Tinto was well-positioned to beat the slowing U.S. economic growth. The company’s defensive features include “Clean balances, low valuations. Strong cash flow. High yields. Structural demand growth. An implicit baked-in inflation hedge. You can read more about the call here. Cowen calls Planet Fitness his best idea. Cowen wrote in a note calling Planet Fitness “a great idea.” He said that Planet Fitness was well-positioned for success in either a better or worse environment. PLNT lies at the nexus powerful secular shifts, that will support growth. The company is further fueled with its $250mm growing ad funds, which are accelerating its flywheel. Citi reiterates Peloton buy Citi indicated that it is bullish about the company’s future after it hired a new CEO. We believe Mrs. Coddington is well-suited to manage Peloton’s next phase of subscription growth, given her extensive experience in software and eCommerce. Morgan Stanley calls Apple overweight. Morgan Stanley stated in a note, Apple’s Worldwide Developer Conference was an “innovation engine at full speed.” Apple’s WWDC 2022 keynote went as expected. The highlights were feature upgrades to iOS 16 iPadOS 16 WatchOS 9 and macOS Ventura. Also, the unveiling of the MacBook Air was well received. Needham reiterates Apple purchase rating. Needham stated that Apple is still a buy, but it was “surprised” by Apple’s silent presentation at the Worldwide Developer’s conference. “The silences at WWDC surprised us the most. AAPL didn’t say anything for nearly two hours about AppleTV, which included no mention of their 2022 Best-Picture winner CODA and the future role sports will play in their content bundle. Neither did they mention any privacy restrictions (); nor did they mention an artificial reality OS. Deutsche Bank reiterates Oracle’s buy rating. Deutsche Bank stated that the bank is bullish going into Oracle’s next week’s earnings report. We reiterate our Buy rating for Oracle’s F4Q results due to increasing fundamental strength as reflected in partner checks.