Wall Street's Mixed Signals: Upgrades and Downgrades Abound

Key Takeaway

Morgan Stanley, Bank of America, and JPMorgan issue bullish calls on Disney, General Electric, and Amazon among others; while HSBC downgrades Ferrari on valuation concerns and Citi downgrades Church & Dwight to sell. Analysts highlight top picks across various sectors for 2024 with a focus on growth potential and earnings power.

Morgan Stanley Reiterates Disney as Overweight

• Morgan Stanley raised its price target for Disney to $110 per share from $105 and maintains an overweight rating.
• The firm sees opportunities for the company to improve and unlock value in its Media businesses, with Parks assets limiting downside risk.

Bank of America Names General Electric a Top Pick

• GE is considered a "pure-play aviation stock" for 2024 by Bank of America.
• The upcoming spin-off of Vernova (GE’s Renewable Energy & Power segments) in April is seen as beneficial, with competitors’ distractions at both Aerospace and Vernova providing further advantages.

KBW Upgrades D.R. Horton to Outperform

• KBW upgraded D.R. Horton due to positive earnings and book value growth, healthy liquidity, and a track record of delivering value to shareholders via stock buybacks.

Morgan Stanley Initiates DoubleVerify as Overweight

• DoubleVerify is labeled innovative by Morgan Stanley, addressing significant industry challenges with leading product offerings driving sales/EBITDA CAGRs through ’27.

Bank of America Reiterates Apple as Neutral

• Apple's balanced risk/reward is cited by Bank of America, highlighting concerns about weaker iPhone 15 cycle on consumer spending and China risk.

Wolfe Initiates Thermo Fisher as Outperform

• Wolfe expects Thermo Fisher shares will outperform the peer group over the next year due to confidence in revenue growth outlook and sustained margin improvement.

JPMorgan Initiates Kanzhun as Overweight

• Kanzhun has emerged as a disruptive leader in China’s online recruitment market according to JPMorgan due to its innovative matching model, scale advantages, and strong network effect.

HSBC Downgrades Ferrari; Names Clorox a Top 2024 Pick

HSBC downgraded Ferrari mainly on valuation but named Clorox a top pick for 2024 citing inflecting results post temporary issues or multinational names with higher growth potential.

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The news provides insights into various analyst calls on Wall Street regarding different companies across sectors such as technology, healthcare, finance, retail among others. These calls range from reiterations of ratings on well-known companies like Disney and Apple to upgrades like General Electric being named a top pick for 2024. Each call reflects the analysts' views on specific stocks based on their performance or future prospects within their respective industries.

STREET VIEWS

• Morgan Stanley (Overweight): "We remain OW as we see its Parks assets limiting downside risk, and see opportunities for the company to improve and unlock value in its Media businesses."
• Bank of America (Top Pick): "GE is on track to spin-off Vernova (GE’s Renewable Energy & Power segments) in April. We see GE as benefiting from competitors’ distractions at both Aerospace and Vernova. We view the cancelation of one of three of GE’s offshore wind projects as a positive, as it allows GE to avoid a loss-making contract."
• KBW (Outperform): "We upgraded DHI to Outperform (OP) due to positive earnings and book value growth, healthy liquidity, and track record of delivering value to shareholders via stock buybacks."
• Morgan Stanley (Overweight): "DV addresses a significant industry challenge and $215bn of total digital ad spend. We see its leading product offering and innovation pipeline driving 22% sales/23% EBITDA