Here are Friday’s biggest calls on Wall Street: Citi initiates McKesson as a buyer Citi said McKesson has “transformed into an agile healthcare services company.” “And while we expect MCK to maintain its dominance in U.S. distribution, our buy rating is based on the margin expansion MCK will realize as it expands its oncology services franchises and biopharmaceuticals.” Atlantic Equities reiterates Netflix as overweight Atlantic Equities said it is bullish on Netflix’s paid-sharing platform. “We are now seeing a 9% increase in subscribers over time through the initiative, as disgruntled subscribers who disconnect are more than offset by dislocated sharers who get their own subscriptions, while we are seeing a overall increase in ARPU of around 3%, for a combined effect of 13%.” Piper Sandler Reiterates Overweight Alphabet Piper said AI is a “real risk” to Alphabet’s search revenue. “Google’s market share is undeniable, and we believe its control over distribution is even more impressive. That said, AI poses a real risk to Google search revenue, and we estimate around $15 billion dollars are “at risk” by 2025E, or about 7% Barclays reiterated that FedEx is overweight Barclays said it is maintaining its buy rating on the stock, but investors expect more from the stock management.” FedEx’s management cost reduction goals sound plausible on a high level, but digging deeper, we suspect investors will be looking for a specific ability to reduce and be quick to brush aside management platitudes, which have been a hallmark of ruined past plans.” UBS reiterates Wells Fargo and Bank of America as a buy UBS said it is considering a revaluation of banking stocks such as Wells and Bank of America “As such, we flag two stocks where revaluation may continue beyond first-quarter earnings: BAC, where the relative valuation to JPM looks too wide, and WFC, whose valuation near TBV (tangible book value) suggests recessionary levels.” Bernstein reiterates Tesla as under -performing Bernstein said he is maintaining his underperforming rating on the stock as competition remains fierce. “We believe the primary driver of Tesla’s stock losses has been intense competition.” Loop Launches Jack in the Box as Buyer Loop called the fast food company “an improving growth profile at an attractive price.” “For the company’s Jack in the Box brand, we model system-wide comparable store sales growth of 6.2% in 2Q23, 5.0% in FY23 and 3. 1% in FY24.” Morgan Stanley names Mercadolibre among top picks Morgan Stanley said it sees several growth drivers for e-commerce company LatAm. “Multiple Sources of Earnings on the Rise With new EBIT builds for eight MELI business lines, we see a sustainable base of profitable growth drivers. Read more about this call here. stay down short term.” We are downgrading JD from Buy to Hold and lowering our PT to $49 per share (from $82 previously). We continue to believe the company is undervalued and see significant long-term upside, but we no longer see the valuation conditions unblocking in the near term. said it is maintaining its buy rating on Charles Schwab shares.” much stronger EPS growth over the next 2-3 years than trusted banks, although the outlook for 2023 is now much more subdued.” Cowen is improving restaurant brands to outperform the market. US SSS at upside down under a new chairman and new CEO as a capable brand chairman is granted autonomy to turn the brand around Outperform, based on their long-term trajectories and the likelihood of them turning the corner of the supply chain.” Bank of America downgrades Generac to underperform relative to neutral Bank of America said in its downgrade of the battery backup company that it worries about lack of recovery. “After GNRC’s precipitous fall as S&P’s second-worst performing stock in 2022, we argued that stocks had largely flushed out in 2023. However, GNRC’s ambitious guidance for FY23 seems to us to increasingly out of reach, as pressures mount in the residential segment.” UBS Reiterates Disney as Buyer UBS said it believes Disney will take a 100% stake in Hulu and roll it into Disney+. “Our base case is that Disney gets Comcast’s stake and takes 100% of it.” Morgan Stanley reiterates overweight elf Beauty Morgan Stanley said it sees a long-term growth opportunity for the beauty business. “We are reiterating our OW on ELF as our preferred SMID cap name, with increased confidence behind our call for a significant revenue upside from consensus, supported by accelerating US scanner data sales. United in the first quarter, which confirms the near-term upside and greater opportunity for LT growth that the market expects.”
