Apple, Tesla, Best Buy, FedEx
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These are the top Wall Street calls for Thursday: UBS Upgrades Tesla to Buy from Neutral UBS stated in UBS’s upgrade that Tesla’s “operational outlook” is better than ever. We upgrade TSLA (from Neutral), with an unchanged $1.100 PT. TSLA fell by 35% ytd in line to other tech stocks. But, the operational outlook remains strong. This call is available here. Credit Suisse raises Freeport-McMoRan from underperform to neutral Credit Suisse stated in the upgrade of this mining company that it is becoming more bullish about copper. “Copper Is a Winner in Stagflation Environment & Soft Landing – Upgrade FCX to Neutral.” You can read more on this call. Atlantic Equities confirms Costco’s overweight status. Atlantic Equities stated that Costco was inflation-resistant. With its limit on margin for item sourcing, stability offered by the membership income and higher income of customers, Costco is better able to withstand inflationary pressures. JPMorgan elevates Take-Two from neutral to overweight. JPMorgan stated in the upgrade of Take-Two that it is well-positioned following its Zynga acquisition. “With Zynga’s acquisition, TTWO has a more extensive portfolio of mobile games than ever before, and a leading console IP as well as a steady stream of new content. This call is available here. KeyBanc keeps Apple overweight KeyBanc maintained its overweight rating for the tech company, but stated that its data checks showed some indications of a softening U.S. market. We recommend that you own AAPL. Our key first look data from credit cards shows that AAPL tracks below historical seasonality. Indexed Spending is -8% m/m for May, compared to the average three-year of +6%. The -8% May data point is the lowest m/m since pre-pandemic. This suggests that there has been a softening in U.S. demand. demand.” Morgan Stanley lowers Silvergate stock to an equivalent weight to overweight Morgan Stanley noted that Silvergate’s stock was highly correlated to Bitcoin volatility. The stock’s correlation to bitcoin and the effect of crypto price movements on deposit growth drive a large skew in possible outcomes. UBS maintains Microsoft’s buy status. UBS cut its estimate on Microsoft on Thursday, however it advised investors to keep their shares of Microsoft. For FY23, we are reducing our revisions estimate to $229.2b from $225.1b. Our EPS estimate to $10.77 from $10.39. We have made additional FX adjustments to our estimates. Microsoft wants to emphasize that “we’re not immune from the macro”, and they are making adjustments accordingly. Loop reiterates Best Buy’s statement that it believes the retailer of electronics chains is more competitive after conducting recent price checks. We’re encouraged by Best Buy’s low prices. This especially given that consumers are likely to be more conscious of their spending habits due to ongoing inflation. Our bullish view is also that founder Dick Schulze has recently purchased stock. Cowen initiated Deere as a market perform Cowen claimed that the stock’s value isn’t compelling enough for an outperform rating. DE is one of the biggest and most innovative companies within a sector that has positive secular trends, as well as an ongoing cycle for replacement. However, we think the intrinsically favorable dynamics of this sector are fully understood. Susquehanna initiates Royal Caribbean and Norwegian. Susquehanna indicated that the industry’s fundamentals are improving. Positively, the industry has a bright future. Liners plan to redeploy all their fleets in the summer. They also have the line of sight for profitability through 2023. JPMorgan reduces Scotts Miracle-Gro’s rating to neutral. This is after it said that the chemical and lawn products manufacturer sees too many potential catalysts. F2022’s earnings will likely be lower than expected because Scotts Miracle-Gro products with higher margins — fertilizers and grass seeds — are having trouble in wet environments. Morgan Stanley states that Home Depot and Lowe’s are overweight. Morgan Stanley stated its survey results show that home improvements are “healthy, moderate and moderation.” The AlphaWise survey shows that business conditions are improving for Home Improvement contractors and they have a moderate decline in peak levels. OW HD and LOW. RBC upgrade Ollie’s after Wednesday’s earnings report. RBC claimed that Ollie’s fundamentals were improving and it expects the retailer to perform better than the sector. OLLI had another difficult quarter but with the easing supply chain pressures, and the contracted freight rates, we feel more confident that OLLI’s fundamentals will improve over the next half of the year and beyond. Citi confirms FedEx is a buy Citi indicated that FedEx will continue to be tactically bullish as it heads into FedEx earnings later in the month. We believe the main question in F4Q22 is not whether the results are just temporary or whether the results and investor day have changed. Or whether the company has a long-term story that is related to CEO changes. Loop cuts Honesty to Buy from Hold Loop expressed concern about the recent statements by major box retailers. Comments from major mass retailers such as TGT, HNST’s largest client are concerning. As we anticipate inflation to be higher than our previous expectations, our PT is impacted by sales reductions and long-term forecasts for lower gross margin.
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