| | | Notable analyst calls this week: WBD, Medtronic and Dell among top picks
Aug. 17, 2024 2:31 PM ET
By: Tiyashi Datta, SA News Editor
 Supatman
The S&P500 ( SP500) closed in the green on Friday, after an eventful week that saw some encouraging economic data as well as earnings reports from companies including Walmart, Alibaba and Applied Materials.
For the week, the Nasdaq ( COMP:IND) gained 4.9%, while Dow ( DJI) advanced 3%.
Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:
Bernstein downgrades Warner Bros. Discovery after ‘disappointing’ quarter
Bernstein downgraded rating on Warner Bros. Discovery ( WBD) to "market perform" from "outperform," citing a long road to recovery following a "disappointing" second quarter report.
“This is quite disappointing given the quality of WBD’s IPs and studios,” it said.
The brokerage, which also PT was lowered by $2 to $8, called it the worst performer among its peers, along with Paramount Global. The stock has lost 6% since its Q2 results.
Dell in spotlight ahead of quarterly results
Barclays upgraded Dell Technologies ( DELL) to Equal-Weight, saying AI should benefit the company's overall top-line growth. However, analyst Tim Long has some concerns about the enterprise server and storage businesses.
J.P. Morgan also reiterated its Overweight rating on Dell and placed the stock on its Analyst Focus List as a value pick, ahead of quarterly results on August 29.
Wells Fargo noted that AI server monetization and backlog expansion, versus margin concerns, would be a key focus in Dell’s quarterly results. The firm kept its Overweight rating on Dell but reduced PT to $150 from $175.
Bernstein analyst led by Toni Sacconaghi, Jr. also said even though the company’s Q1 results were disappointing, they continue to think that Dell's near term AI server revenues could significantly exceed expectations. The firm has an Outperform rating on the stock.
Cisco gets upgraded after strong quarter
Cisco System ( CSCO) was upgraded by New Street and HSBC, following its fourth quarter results, which surpassed Wall Street estimates.
New Street upgraded the stock to Buy from Neutral and set a PT of $57, noting that cyclical headwinds are now behind and Cisco is returning to growth.
HSBC has upgraded Cisco to Buy from Hold and raised PT to $58 from $46. The firm expects Cisco's non-GAAP EPS to rise at a Compound annual growth rate, or CAGR, of 11.6% over CY24-27.
Deutsche Bank calls Eli Lilly ‘high growth unicorn’
Deutsche Bank raised its recommendation on Eli Lilly ( LLY) to Buy from Hold, calling the drugmaker a “high growth unicorn” following its Q2 beat-and-raise results.
DB analyst James said the earnings beat “helped settle some nerves in a volatile macro backdrop,” with the stock set to outperform for its “high growth outlook and low beta.”
JPM turns bullish on Sea Ltd on solid results
J.P. Morgan upgraded ratings on Sea Ltd ( SE) to overweight from neutral, saying all three major business segments are likely to drive positive earnings revisions and anticipate material improvement in e-commerce profitability. JPM also hiked PT by $24 to $90.
Stifel not convinced with Medtronic’s growth outlook; UBS is bullish
Stifel has downgraded from Medtronic ( MDT) to Hold, saying innovation-pipeline opportunities were taking longer than expected, while many divisions faced “growth-limiting competitive challenges. The firm lowered PT for the stock to $85 from $100.
Meanwhile, UBS upgraded the MedTech giant to Neutral from its previous rating of Sell, citing a potential turnaround in the company's diabetes segment.
Wall Steet analysts positive after Alibaba’s earnings
Alibaba ( BABA) was in the spotlight after the Chinese e-commerce giant posted mixed quarterly results. Bernstein rated the stock Market-Perform and raised PT to $85 from $80, noting that the first quarter was "a mixed bag."
BofA Securities also maintained Buy rating, citing improving growth outlook entering into the second half of fiscal 2025, attractive valuation and solid investor return execution.
Truist maintained Buy rating but lowered PT by $10 to $100, saying Q1 results showed sustained operational execution against a tough macro environment.
Other than the companies mentioned above, there were other analysts actions including Lumen Technologies ( LUMN), which was downgraded by Wells Fargo from Equal Weight to Underweight, saying that it does not expect a favorable risk/reward tradeoff when compared to the peers.
Piper Sandler upgraded Robinhood Markets ( HOOD) to Overweight from Neutral, calling the stock's 27% pullback since its 52-week high on July 16 an "attractive entry point into an innovative, fast-growing brokerage platform."
BofA’s Bryan Spillane downgraded Estée Lauder ( EL) to Neutral and reduced PT by 28% to $100, anticipating a sequentially slowing category in the company’s most important market, China. |
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