Here are Tuesday’s biggest calls on Wall Street: Northcoast upgrades Costco to buy on hold Northcoast said it sees more upside for the wholesale retailer. “Costco’s performance for its 2QF23 (ended Feb. 12) of $3.30 per share exceeded expectations and set the stage for a strong second half of fiscal 2023 despite the challenges of high inflation and the reluctance of many consumers to buy discretionary goods. Goldman Sachs Lists Arista Networks and Juniper as Buyer Goldman launched several networking gear stocks, noting they are attractively valued. “We are launching coverage of US communications technology stocks, including Arista Networks (ANET, Buy), Juniper Networks (JNPR, Buy), Cisco Systems (CSCO, Neutral) and F5 Networks (FFIV, Neutral). Learn more about this call here. UBS Reiterates Apple as Buyer UBS said its audits show App Store revenue tending to stagnate. “Two months into the March quarter, we estimate that Apple App Store revenue growth is trending flat, up only ~31 bps YoY (Sensor Tower), a modest improvement from a drop of ~68 bps YoY at Q4:22.” Deutsche Bank downgrades Joby to sell pending Deutsche said it sees too much risk for the airline. “We are downgrading Joby from Hold to Sell, believing that significant risks are being overlooked by the market and that Joby’s valuation is too lopsided relative to its Archer counterpart.” Learn more about this call here. UBS reiterates BJ buy UBS said it was bullish on BJ entering earnings later this week. “We expect BJ’s to report strong fourth quarter results. We believe BJ’s will likely end the year on a positive note.” Wells Fargo Reiterates Bank of America as Overweight Wells said the banking giant has “technology advantages”. “Technology advantages should help BAC post the best revenue mix against expense growth in 2023, leading to higher incremental profit margins for consumer banks.” Goldman Sachs Reiterates Amazon as Buyer Goldman said the e-commerce giant is now a solid top pick. AMZN (now solidly our top pick for the rest of 2023 at current trading levels) with discussions focusing on the potential downturn in AWS, the way forward on NA e-commerce operating margins, healthcare global consumer AMZN and all visibility on international e-commerce loss trajectory in the years to come.” Baird initiates bluebird’s bio as it surpasses Baird said bluebird’s bio will “surpass” expectations. “Looking ahead, management appears poised to launch lovocel into the sickle cell market, which represents a larger orphan disease opportunity, in late 2023.” Credit Suisse Launches Mineralys Therapeutics Credit Suisse has called the biopharmaceutical company, which develops drugs for hypertension, best in class. “We are launching the Mineralys Therapeutics (MLYS) hedge with an outperform rating and a target price of $40.” Learn more about this call here. Evercore ISI initiates tactical outperformance on Vivid Seats Evercore said it was bullish on the seat ticketing company ahead of turning a profit on Tuesday. “We are adding SEAT to our list of tactical OPs ahead of print. We see no significant risk to Street’s current estimates, and SEAT shares have traded down 9% year-to-date and up around 18% since the company’s third-quarter EPS call in November.” Morgan Stanley Launches Overweight Hesai Group Morgan Stanley said the lidar solutions company is an “enabler of an empowered future.” “Hesai, a leader in LiDAR solutions, stands to benefit from accelerating LiDAR adoption in China amid growing smart electric vehicle penetration, in our view, despite its nascent.” Morgan Stanley Reiterates Walmart as Overweight Morgan Stanley has stated its stance on Walmart stock as the retail giant continues to recruit new members for its Walmart+. “The latest survey indicates ~18.5 million Walmart+ members (~14.5% penetration), another modest uptick. TAM dipped to nearly 30 million members, a record high of ~3.5 million, suggesting further growth to come.” Loop reiterates Netflix as hold Loop said its investigative checks show that charging for password sharing increases Netflix’s revenue. “We conducted a survey of over 500 domestic Netflix users to help gauge the impact of Netflix charging for password sharing. Password sharing charging and limiting the number of accounts shares directionally increase ARPU, revenue and churn.” Jefferies reiterates Oracle as a buyer Jefferies said he sees more tailwinds than headwinds for Oracle shares. “ORCL remains our tactical value pick in large-cap software.” Canaccord launches Perrigo as buy Canaccord said it was bullish on the maker of over-the-counter health products. “We are launching coverage of Perrigo, a consumer health company focused on selling self-care products, including over-the-counter. PRGO primarily sells private label products in the United States and branded products in Europe.” Atlantic Equities reiterates Charles Schwab as overweight Atlantic Equities said it expects a 30% uptick in growth initiatives for the financial services firm. “We believe the substantial upside potential of Schwab’s growth initiatives remains undervalued by the market.” Argus upgrades DraftKings to buy pending Argus said he’s optimistic for the sports betting company as more states legalize gambling. “As more states legalize online sports betting and consumers allocate more of their income to wagering, we expect DKNG revenues to grow from $323 million in 2019 to $3.1 billion. in 2023.” Evercore ISI Improves Delta to Outperform Versus Line Evercore said it sees several positive catalysts ahead for Delta and investors should buy the dip. “The recent ratification of the pilot contract reduces the uncertainty of Delta’s cost outlook relative to its peers. The Investor Day scheduled for June at its Atlanta headquarters is a good opportunity to refine financial targets and segments such than Tech Ops.”
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Wall Street analysts’ biggest calls on Tuesday include Costco and Amazon
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