Wall Street's Top 10 Stock Calls This Week - Saturday, April 13

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What has Wall Street been buzzing about this week? Here are the top 5 buy calls and the top 5 sell calls made by Wall Street's best analysts during the week of April 8-12, 2024. First, here are the top 5 buy calls of the week.

1. MoffettNathanson Upgrades DoorDash to Buy after Risk Failed to Materialize

MoffettNathanson upgraded DoorDash (DASH) to Buy from Neutral with a price target of $164, up from $118. The impetus behind the firm's previous DoorDash downgrade, student loan risks, has failed to materialize.

MoffettNathanson, which says it has "always loved DoorDash's longer-term growth story," had been worried about short-term headwinds, but admits that in retrospect, it was "too cute by half." As grocer selection improves on DoorDash, the company should capture growing consumer demand, the firm tells investors in a research note.

2. Disney Reinstated with an Overweight at JPMorgan

JPMorgan reinstated coverage of Disney (DIS) with an Overweight rating and price target of $140, up from $120, following a period of restriction. While cautious on the media landscape due to pay TV subscriber losses and advertising headwinds, Disney is the firm's favorite in the group due to the company's "unique" content, improving streaming financials, and parks operation "which provides an avenue to attractively deploy capital."

Challenges remain on the legacy side of business, though Disney can navigate this through a more substantial cost restructuring at its linear networks, JPMorgan tells investors in a research note. The firm is also encouraged by ESPN's strategy of deploying its content across flagship and the sports joint venture, with a potential assist from a strategic partner.

3. Nike upgraded to Buy at BofA with expectations

BofA upgraded Nike (NKE) to Buy from Neutral with a price target of $113, up from $110. Estimates are bottoming and "finally look achievable," contends the firm, which also notes that the stock's multiple has compressed. Meanwhile, BofA cites upcoming potential catalysts that include the Olympics and the company's analyst day meeting this fall.

4. Benchmark Rolls Out Buy on Airbnb due to Top Market Position

Benchmark initiated coverage of Airbnb (ABNB) with a Buy rating and a price target of $190. Even as competition increases in alternative accommodations within the broader travel market, research shows that Airbnb has retained its number one position with consumers, hosts, and unaffiliated travel experts, the firm tells investors in a research note.

Benchmark views the shares as a "sound momentum play, with potentially material upside to fundamentals over the next 12-36 months" due to market expansion and growth in service fees.

5. Broadcom Reinstated with a Buy at Deutsche Bank 

Deutsche Bank reinstated coverage of Broadcom (AVGO) with a Buy rating and a price target of $1,500.

The firm continues to see three positive drivers to the shares: artificial intelligence catalysts, mainly custom processing opportunities and AI focused connectivity solutions, accretion potential presented by the recently acquired VMware, and an eventual rebound in the company's "already de-risked" cyclically levered segments. Deutsche cites these positive catalysts and the market's favorable outlook on AI-related names for the Buy rating.

Next, here are the top 5 sell calls of the week.

1. Kroger Downgraded to Underperform at Exane BNP Paribas

Exane BNP Paribas downgraded Kroger (KR) to Underperform from Neutral with a $48 price target. After a period of strong earnings growth, the outlook for the U.S. grocery space is "tougher," the firm tells investors in a research note.

With the Federal Trade Commission highlighting how much earnings have increased, the industry will be keen to "take the sting out of the conversation and competition will partially reverse," Exane says. The firm sees a more challenging outlook for Kroger.

2. Robinhood Downgraded to Sell at Citi

Citi downgraded Robinhood (HOOD) to Sell from Neutral with a price target of $16, up from $13. The shares are off to a strong start to 2024, up 44% year-to-date, but this appears largely due to rising Bitcoin prices, the firm tells investors in a research note.

Given the increase in stock price, Citi believes Robinhood's valuation levels "have disconnected from the fundamental outlook." It sees risks to the stock here on any material pullback in Bitcoin prices, slower retail activity, or a market pullback given current valuations.

3. Altice USA Downgraded to Underweight at JPMorgan

JPMorgan downgraded Altice USA (ATUS) to Underweight from Neutral without a price target. The firm cites the company's "lengthy" turnaround story as broadband momentum remains weak, elevated competition persists, its leverage profile is elevated, cash flow generation is limited, and the likelihood of an acquisition in the near-term is low.

JPMorgan believes an eventual inflection in the business will take time. Meanwhile, it expects weak EBITDA, rising interest expense, and still elevated capex to pressure cash flow and leverage.

Altice USA Downgraded to Underperform at Exane BNP Paribas with $1 Target

Additionally, Exane BNP Paribas downgraded Altice USA to Underperform from Neutral with a price target of $1. The firm, which notes it had recently upgraded shares to Neutral on the upside risk of a buyout by Charter (CHTR), sees this upside risk as reduced following its new work on the headwinds facing both companies this year.

4. Kenvue Initiated with an Underperform at Bernstein

Bernstein initiated coverage of Kenvue (KVUE) with an Underperform rating and a price target of $18. Kenvue - the former Johnson & Johnson (JNJ) Consumer Health business - has consistently lost market share across the majority of its business for the past several years, says the firm, which expects FY24 investment to prove "inadequate," and struggles to see "a path to share stabilization absent significant further re-investment."

5. Arista Networks Double Downgraded to Sell at Rosenblatt on AI Boost Skepticism

Rosenblatt downgraded Arista Networks (ANET) to Sell from Buy with a $210 price target. The stock trades at its current valuation because most people believe Arista will be a large AI beneficiary, but the firm's view is that while Ethernet is "a long-term winning technology," Arista may not benefit as much as would be needed to support the current stock price or higher, the analyst tells investors.

Though the firm thinks Ethernet is a winning technology, it also thinks most of the spoils will go to Nvidia (NVDA), and worries that Arista's multiple may shrink as investors realize its AI opportunity is smaller than most expect.

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