Here are the biggest calls on Wall Street on Tuesday: Wells Fargo initiates Rollins as overweight Wells says it’s bullish on shares of the pest control company. “We are initiating coverage on Rollins at Overweight given ever-growing demand for pest control caused by: 1) increasing pest resiliency, 2) climate change, 3) new regulations, 4) southern migration, and 5) a shift from DIY to Pro.” Goldman Sachs reiterates Disney as buy Goldman said it’s sticking with its buy rating following Disney’s biennial D23 fan event in California. ” Disney D23 provided increased visibility into the long-term Experiences and film growth outlook, which includes four new cruise ships from 2027-2031…” UBS initiates Xylem as buy UBS says the water company has an “attractive growth profile.” “We view XYL as the leading pure-play water company, with [mid single digits plus] growth profile that is less cyclical than peers and a ~100bps/year margin opportunity…” JPMorgan reiterates Netflix as overweight JPMorgan says Netflix has macroeconomic resilience. “Across Internet earnings the past few weeks, higher capex spending and the softening consumer have been two major themes. However, we believe NFLX has relatively less exposure on each of these fronts compared to Internet mega-caps.” Mizuho names Palo Alto & CrowdStrike as top ideas The research firm says it’s sticking with its outperform rating on both cybersecurity companies. “Our checks indicate an uptick in PANW demand for the first time in several quarters, and we raise our PT to $380 (was $350). … .Separately, our checks following CRWD’ s infamous IT outage were not as bad as we had feared.” Barclays upgrades Dell to equal weight from underweight Barclays said in its upgrade of Dell that the “AI hype” has been “washed out” from the stock. “Since DELL reported FQ1 earnings May 30th, the stock has dropped ~34% vs SPX +1% and NDX -.1%. We believe much of the share price contraction has been the market coming to terms with these structural issues surrounding the AI business, and with this correction, we move to Equal Weight from Underweight.” Citi upgrades Hormel to buy from neutral Citi said in its upgrade of the maker of Spam that it sees upside potential for Hormel shares. “Upgrading to Buy; Improvements to Retail Sales, Turkey Margin, and Supply Chain Could Drive Upside.” Goldman upgrades Ducommun to buy from neutral Goldman says it sees margin upside for the aerospace and defense company. “We expect DCO to benefit from its exposure to aerospace original equipment as the [original equipment manufacturers] ramp up production significantly to meet strong demand.” Bernstein downgrades Warner Brothers Discovery to market perform from outperform Bernstein said the media company has too many negative catalysts and a longer road to recovery. ” WBD missed on all key financial metrics for Q2, and the stock is trading down > 10% since the Q2 earnings, reaching its lowest point since the WarnerMedia-Discovery merger in April 2022. The stock is down ~70% since then, making it the worst performer among its peers, along with PARA.” Wells Fargo initiates ITeos Therapeutics at overweight Wells said in its initiation of coverage into ITeos that the biotech company has multiple catalysts ahead. “We like the setup for shares, which offers a compelling risk/reward given where the stock is trading.” BTIG names Flutter a top pick BTIG said the gaming and gambling company is a top idea ahead of earnings late Tuesday. ” Flutter remains a BTIG Top Pick.” Bank of America adds Duolingo & Eli Lilly to the US 1 list Bank of America added both stocks to its top ideas list. “We are adding Duolingo (DUOL), Eli Lilly & Co. (LLY), Mid-America Apartment Communities (MAA), and McCormick & Co (MKC) to the US 1 List.” Stifel initiates Littelfuse as buy Stifel says the electronics company has an attractive balance sheet. “We upgrade our investment rating on Littelfuse to Buy from Hold, and raise our 12 month price target to $280 (from $270).” Bank of America reiterates Lyft as buy The bank said the ride sharing company is trading at a “significant discount.” “In our gig economy comp table, Lyft has the lowest 2024E EBITDA margin, but the highest level of revenue growth.” Wells Fargo reiterates Home Depot as overweight Wells says investors should buy the dip in Home Depot shares following earnings Tuesday morning. “This [earnings conference] call will be important, but investors were bracing for a lower bar and w/ bad news out of the way & rate cut coming, we see a pullback getting bought.” Barclays reiterates Amazon as overweight Barclays said it’s standing by shares of the e-commerce platform. “The biggest debate in e-commerce right now is whether Amazon is signaling a bigger investment cycle, or if retail [profit] margins can resume their upward march (albeit at a slower pace than previously expected). In terms of overall growth in the sector, the read-through was somewhat mixed signals.”
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