Wall Street's Top 10 Stock Calls This Week - Saturday, April 20

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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 15-19, 2024. First, here are the top 5 buy calls of the past week.


1. Maxim Sees Amazon Exploiting Consumer Internet Trends, Starts at Buy

Maxim initiated coverage of Amazon.com (AMZN) with a Buy rating and a $218 price target. The firm believes the company will be able to exploit consumer internet trends that include advertising, artificial intelligence, cloud computing, healthcare, logistics, and over-the-top, or OTT, video. Maxim projects a compound annual sales growth rate of 6.5% from 2023-2026, which it notes compares to 14.2% in the prior three-year period.


2. Nvidia Initiated with an Outperform at Evercore ISI

Evercore ISI initiated coverage of Nvidia (NVDA) with an Outperform rating and a price target of $1,160. The firm thinks investors underestimate the importance of the chip, hardware, and software ecosystem that Nvidia has created, and it contends that computing eras last 15-20 years and are "typically dominated by a single vertically integrated ecosystem company, whose returns are measured in 100-to-1000 bagger range."


3. eBay Upgraded to Overweight from Underweight at Morgan Stanley

Morgan Stanley double upgraded eBay (EBAY) to Overweight from Underweight with a price target of $62, up from $35.

Morgan Stanley expects eBay's greater emphasis on site-wide innovation and generative artificial intelligence features to flip gross merchandise volume growth from negative to positive while maintaining or expanding adjusted EBIT margin. The firm believes eBay is best positioned to capture upside from generative AI in 2024 to the extent its seller-focused features drive listing velocity and quality.


4. AMD Initiated with an Outperform at Evercore ISI

Evercore ISI initiated coverage of AMD (AMD) with an Outperform rating and a $200 price target. The firm views AMD as a beneficiary of "the Tectonic Shift in Computing to Parallel Processing Era," as it captures greater share of server CPUs as well as share in the merchant accelerator market with its Mi300 series products.

Evercore believes AMD is establishing itself as a solid second source to Nvidia in merchant accelerators, and that such a position could accelerate with progress on its chip, hardware, and software ecosystem.


5. Reddit Initiated with an Overweight at Piper Sandler

Piper Sandler initiated coverage of Reddit (RDDT) with an Overweight rating and a $50 price target. The firm views Reddit as an "iconic internet asset likely to grow users and revenues rapidly in coming years."

In advertising, reaching peer monetization levels should drive sales growth while new revenue streams will also contribute, Piper tells investors in a research note. The firm says the stock's valuation looks undemanding given upside potential and a pivot to profitability on the horizon.

JMP Securities, Roth MKM, Needham, Deutsche Bank, and Citi also started the name with Buy-equivalent ratings, while Goldman Sachs, Morgan Stanley, BofA, and JPMorgan initiated the stock with Neutral-equivalent ratings.

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


1. Northcoast Cuts Boeing to Sell in Anticipation of Structural Issues

Northcoast downgraded Boeing (BA) to Sell from Neutral with a price target of $140. The firm expects Boeing's quarterly earnings report in two weeks to prompt concerns about the company's underlying fundamentals and ultimately shift investor focus to liquidity and acquisition concerns. Negative expectations are embedded in the lower share price, but investors may not be discounting structural issues, such as Boeing's balance sheet stability or future cash liabilities, Northcoast tells investors in a research note.

The firm believes the 787 production challenges and the Federal Aviation Administration investigation uncertainties do not appear to be reflected in consensus estimates. Northcoast's channel checks confirm unexpected changes were already made to the Dreamliner production schedule "that would normally indicate some type of problem not yet been communicated to The Street." Its survey results point to a 787 program build rate of two jets per month, as opposed to Boeing's claim of five.


2. Etsy Downgraded to Underweight at Morgan Stanley

Morgan Stanley downgraded Etsy (ETSY) to Underweight from Equal Weight with a price target of $55, down from $64. Morgan Stanley says Etsy's limited frequency growth makes it increasingly bearish on the company's medium-term growth trajectory.

In addition, Etsy's margin expansion may be constrained as increased marketing spend is needed to attract and retain incremental buyers, contends the firm. Morgan Stanley sees a pair trade with Overweight eBay and Underweight Etsy, saying the growth profiles of the businesses "seem to be converging."


3. Urban Outfitters Downgraded to Underperform at Jefferies

Jefferies downgraded Urban Outfitters (URBN) to Underperform from Hold with a price target of $32, down from $42. The firm's latest data shows a "notable deceleration" in rolling three-month foot traffic to all three of Urban's brands.

Double digit traffic growth at year-end at Anthro and Free People appears to be slowing to low single digits, while the turnaround at Urban "also appears vulnerable," the firm tells investors in a research note. Jefferies sees potential for the shares to de-rate due slowing to foot traffic data, promotional headwinds, and increased competition.


4. Logitech Downgraded to Underweight at Morgan Stanley

Morgan Stanley downgraded Logitech (LOGI) to Underweight from Equal Weight with a price target of $75, down from $85. Following an analysis, the firm forecasts "just" 3% annual revenue growth for the company through fiscal 2027, 200 basis points below consensus and 500-700 basis points below what it believes is priced into the shares today.

Logitech's earnings on April 30 can be the first catalyst to drive a de-rating of the shares, Morgan Stanley tells investors in a research note. The firm cites the "growing divergence" between Logitech's revenue growth and valuation, along with an upcoming catalyst, for the downgrade.


5. Tenaris Downgraded to Underweight from Overweight at Morgan Stanley

Morgan Stanley double downgraded Tenaris (TS) to Underweight from Overweight with a $40 price target. The firm says the stock screens less favorably versus its global peers on key drivers. Shareholder returns upside represents a less meaningful catalyst at this point relative to the last 12 months, the analyst tells investors in a research note.


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