Amazon, Apple, Salesforce, Costco, Block
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These are the top Wall Street calls of Friday: Baird Upgrades Comerica from Neutral Baird stated in an upgrade to Comerica that it views Comerica as an attractive entry point. CMA upgraded to Outperform; bank sale-off creating opportunities. Banks and related rate trades have benefited from the trendy January/February call and now the air is clearing out of the bank group and we’re starting to see opportunities. Bank of America upgrade Ollie’s to Buy from Underperform Bank of America stated that it believes there is an improvement in the sourcing environment of discount retailers. According to recent industry research, OLLI is being upgraded to Buy. This upgrade comes as a result of the increased availability of closeout products over the past few months. Morgan Stanley lowers Wix.Com from an overweight status to equal weight Morgan Stanley claimed that the Israel-based cloud computing company was a “show-me story”. We downgraded to EW because investors won’t give credit for a “show-me” story given the environment, which restricts upside catalysts in the near term. Wedbush Reaffirms Apple Outperform Wedbush stated in a Friday note that Apple was a “compelling Name to Ride out the Storm.” As of right now, Wedbush believes that iPhone demand is stronger than we expected. This is despite numerous supply issues which have plagued Apple as well as the rest of tech. And the trends are better than what management has predicted for this quarter. This call is available here. Oppenheimer says Costco is outperform Oppenheimer stated that investors should purchase the dip before Costco earnings next Tuesday. The prints have always been tough for COST shares. We are prepared to capitalize on any weakness. While the current environment plays to COST’s strengths, we expect positive catalysts to emerge later in the year. Atlantic Equities drops Freshpet from overweight to neutral. Atlantic Equities stated that it does not see too many immediate challenges for the pet food manufacturer. We believe that FRPT is able to finance its capital plan as it stands, however we question whether the company should be so bold. At current levels, the risk/reward ratio for shares is not attractive to us. Our near term view is more volatile as FRPT seeks to improve pricing, increase production and add new capacity. JPMorgan calls Salesforce stock overweight. JPMorgan believes Salesforce stock “too expensive to ignore” going into earnings. We see suboptimal tactical configurations after a fantastic Q4 (Jan), which was everything we expected. However, the stock is trading down with the wider tape heading into earnings later this month. This will be followed by a slower FQ1 that seems less likely. You can read more on this call. Bank of America reaffirms Best Buy as a buy. Bank of America believes the stock will be undervalued when it reports earnings next week. Best Buy continues to be the leading consumer electronics retailer. We expect Best Buy to maintain a greater percentage of wallet shares than before the pandemic. Hybrid work schedules require constant investment in mobile and at home technology. Telsey lowers Ross’ market performance to outperform. Telsey stated in its downgrade Ross following Thursday’s earnings report that too many “execution mistakes”. ROST has reduced its annual outlook because of ROST’s soft first quarter results and a conservativeer view of the FY22 balance, which reflect the insufficient visibility regarding current geopolitical and macro-economic pressures. Bank of America lowers Hewlett Packard Enterprise’s rating to neutral. This is because it believes there are too many problems in the supply chain for HPE. We expect to see negative revisions in estimates and are increasingly concerned about the order slowdown, due to a worsening supply-chain situation resulting from recent China lockdowns. JPMorgan creates Bill.com. Bill.com is an overweight JPMorgan has initiated Bill.com with a payables-and receivables company and a rating of buy. JPMorgan says that it is a “category leading” software company. BILL built a platform for solving the long-standing problem SMBs (small- and medium-sized businesses) face in paying their bills. It has been recognized as the leader and expects to grow quickly. You can read more about the call here. Citi pulls Amazon stock from focus list. However, Citi retained its buy rating. Citi said that Amazon shares were overvalued at the moment. Citi has removed Amazon from its NAM Focus List due to macro uncertainty and the lack of short-term catalysts. However, shares are down 26% from earnings, and they trade at 10x our ’23E EBITDA/EV, so we think that much of this risk has been priced in. This is especially true for long-term investors. This call is more detailed here. Piper Sandler reaffirms Signature Bank’s overweight status. Piper Sandler wrote in a note that Signature Bank shares look “cheap” even if there is some crypto-phobia. According to the company digital deposits totaled $29 billion as of the 1Q22 end (a breakdown can be found below). The company has seen a significant increase in its deposits over the last 2 years, which led to a substantial improvement in the stock price and dividends. As the cryptospace melts, it’s only fair that shares of SBNY will also be under pressure. JMP confirms Meta Platforms is market outperform JMP wrote Friday in a note for clients that the firm still sees attractive risk-reward prospects despite all regulatory risks. We maintain our Market Overperform rating of Meta Platforms and the $265 price target because we believe Meta can reaccelerate its revenue while it builds social commerce tools, and as advertisers adjust to Reels to reflect engagement’s increasing scale, they will. JPMorgan’s Block is a top choice JPMorgan stated that Block, formerly Square, does not get enough credit for its earnings power. The market is not appreciating the earnings power of individual ecosystems or the synergies that result from scaling cohesion. We reiterated our OW rating on Square as our top growth choice, despite it trading at 7x the ’23 Gross Profit. The key points and risks are discussed in this article.
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