Notable analyst calls this week: AMD, UPS and Devon Energy stocks among top picks
Jan. 18, 2025 9:37 AM ET
By: Tiyashi Datta, SA News Editor
 Mikko Lemola
The S&P500 ( SP500) closed in the green on Friday, after solid quarterly earnings from major U.S. banks, as well as cooler-than-expected inflation data, gave hope to investors.
For the week, Nasdaq ( COMP:IND) gained 1.3%, while Dow ( DJI) rose over 2%.
Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:
Wolfe expects slower data GPU revenue growth from AMD
AMD (NASDAQ: AMD) was in focus after Wolfe Research downgraded it to Peer Perform from Outperform, citing slower data GPU revenue growth than previously expected.
Analyst Chris Caso said he expects slow PC seasonality, continued weakness in gaming and essentially no recovery in embedded, at least in the first-half of the year. "As we highlighted following our visit to Asia last month, we think the set-up into earnings is difficult for AMD," Caso added.
On the other hand, Loop Capital initiated coverage on the stock with a Buy rating and a PT of $175, with analyst Gary Mobley saying that it is possible for AMD to generate $55-$60 billion in FY28 revenue.
BofA sees challenge for Canada’s top telcos, downgrades Rogers and BCE
BofA downgraded Canada's Rogers (NYSE: RCI) to Neutral from Buy, citing reasons like outsized exposure to government-led downward reset in immigration levels, uncertainty around investment in its sports assets, and a higher than originally forecast leverage.
The brokerage also downgraded BCE (NYSE: BCE) to Underperform from Neutral on growth headwinds along with high leverage.
"It is difficult to see pricing improving in the short term," BofA said while commenting on the landscape for wireless.
Wall Street analysts positive EQT, Devon Energy
EQT (NYSE: EQT) and Devon Energy (NYSE: DVN) was upgraded by Bernstein to Outperform from Market Perform with respective $73 and $45 price targets, as the brokerage sees an undersupplied natural gas market driving prices above $5/mcf starting this year and continuing to 2030 as providing a unique opportunity for long-term value creation.
Devon Energy was also upgraded by Benchmark to Buy from Hold with a $44 price target, with analyst Subash Chandra expects operational beats and share buybacks will better reflect in the stock's performance without the M&A distraction.
Citi gets bearish on Southwest Airlines over earnings, FCF concern
Citi downgraded Southwest Airline Co. (NYSE: LUV) to Sell from Neutral on concerns over the quality of earnings and free cash flow conversion. The brokerage assigned a PT of $29.50 on the stock.
Analyst Stephen Trent noted that Southwest Airlines has not kept up with peers in those areas and sees the valuation as stretched. "As US network airlines enjoy positive earnings quality and FCF trajectories, these carriers have overtaken Southwest on these fronts," he warned.
BofA sees potential end to freight recession, upgrades UPS
Bank of America upgraded United Parcel Service (NYSE: UPS) to Buy from Neutral, as it sees a potential end to the freight recession in 2025, as well as benefits from the company’s dynamic pricing model and cost initiatives.
"We believe these gains will work to offset potential volume losses as it insources the remainder of its SurePost last mile volumes from the US Postal Service, continued Amazon revenue glide down, and its high-cost Teamster laborcontract," highlighted analyst Ken Hoexter.
Hoexter expects UPS to top Q4 EPS expectations and set favorable guidance.
STMicroelectronics (NYSE: STM) was downgraded by TD Cowen to Hold from Buy and cut PT to $25 from $32, citing "broad-based semis cyclical headwinds."
Morgan Stanley upgraded e.l.f. Beauty (NYSE: ELF) to Overweight from Equal Weight, citing an upbeat outlook for international growth, U.S. share gains, and expansion opportunity for the Naturium business. Another reason for the upgrade also included the upside potential in revenue in the second half of this year.
Morgan Stanley downgraded Datadog (NASDAQ: DDOG) to Equal-Weight from Overweight, citing expectation of slower growth in the first half of the year.
Evercore has added Apple (NASDAQ: AAPL) to Tactical Outperform noting that the company is well positioned with lowered expectations heading into its earnings results later this month. |
