Here are Wednesday’s biggest calls on Wall Street: Morgan Stanley adds Blackstone to the financials’ finest list Morgan Stanley added the investment bank and private equity firm to its top pick list and said it sees a compelling entry point. “We add BX to our Financials’ Finest list, given attractive entry point on a longer term view with shares trading at a low teens P/E multiple on normalized earnings, for a best-in-class franchise with unrivaled product breadth and distribution capabilities that can grow faster than the market expects.” Read more about this call here. Bank of America downgrades Carvana to neutral from buy Bank of America said it has “liquidity and cash burn concerns.” ” Carvana has been struggling to turn profitable, and with ~$600mn in annual interest expense is burning through cash quickly.” Read more about this call here . Baird upgrades Cooper Companies to outperform from neutral Baird upgraded the medical-device company on Wednesday and said it sees double-digits earnings per share growth. “We believe FX and interest rate risks will also prove more manageable for the company in FY’23, and with double-digit EPS growth likely resuming in the back half of next year, we now see a path to improving sentiment and share price outperformance over coming quarters.” Read more about this call here . Baird reiterates Apple as outperform Baird said it’s sticking with its outperform rating on the stock, but that “continued lockdown risks could force AAPL to accelerate any plans to diversify assembly away from China, though likely gradual.” “Following AAPL’s November 6 comments and ongoing iPhone 14 Pro assembly challenges in China, we are lowering our December quarter iPhone forecast by 8 million units, reducing total FQ1 revenue by 5.6%.” Atlantic Equities reiterates Disney as neutral Atlantic Equities said there’s “no easy fix” for Disney after Bob Iger returned as the media giant’s chief executive. “Morale needs to be improved. Iger changed the company’s structure on his first day back, moving from a streaming-first approach and returning power (and profits) into the hands of key content executives.” Citi downgrades XPO Logistics to neutral from buy Citi resumed coverage of the shipping and logistics company and says it sees too many macro headwinds. “We are reinstating coverage of XPO with a Neutral rating following a period of restriction. While valuation remains compelling, we think macro headwinds will likely dampen tonnage growth, even with easier comps than peers.” KeyBanc reiterates Netflix as sector weight KeyBanc said it’s standing by its sector weight rating on shares of Netflix, but that the company’s new Addams Family show, “Wednesday,” appears to be a hit. ” Netflix’s successful launch of ‘Wednesday’ (most viewed debut ever at 341M hours) screens as an incremental positive against rather underwhelming viewership for ‘The Crown’ (consistent w/w declines) and perceived viewership competition from World Cup.” Citi reiterates General Motors as buy Citi said it sees several positive catalysts ahead for GM. “The recent Investor Day affirmed our conviction, and we still see several potential future catalysts: (1) Strong Q4E FCF should accommodate a healthy pace of buybacks. (2) Expected U.S. Treasury IRA guidelines could bolster GM’s EV margin upside case and peer advantages.” Bank of America reiterates Amazon as buy Bank of America attended Amazon’s AWS Re:Invent conference and said Amazon Web Services ecosystem “remains strong.” “On Tuesday, AWS CEO Adam Selipsky gave his second keynote address at AWS Re:Invent. The keynote started with a focus on cost savings and sustainability, and then had a heavy focus on data management & new technology.” Morgan Stanley reiterates Lowe’s as overweight Morgan Stanley said the home-improvement retailer is in a “strong fundamental position.” “14%-15% long-term EBIT margin framework potentially on tap. Constructive on LOW’s margin ascent, cautious on slowing housing metrics.” UBS reiterates Tesla as buy UBS predicted Tesla will be at the forefront in the rise of automotive software. The firm sees a “~$700bn opportunity by 2030.” ” Tesla , GM and Mercedes-Benz stand out positively in our global OEM coverage whereas smaller mass-market OEMs and legacy tier-1 auto suppliers are at risk of being left behind.” Evercore ISI initiates Fisker as outperform Evercore said the electric vehicle company has a “unique business model.” “While questions will center around ’25 volume & margins, FSR has the lowest market cap, largest TAM, and an attractive SUV, giving belief management goals for ’23 are attainable.” Stifel downgrades CrowdStrike to hold from buy Stifel downgraded CrowdStrike after the cybersecurity company’s earnings report on Tuesday. “The poor performance was driven by macro headwinds that contributed to elongated smaller customer sales cycles (worst new customer acquisition quarter since F3Q21), as well as a greater portion of enterprise clients moving to multi-phase subscription start dates.” Read more about this call here. Jefferies reiterates Amazon and Microsoft as buy Jefferies said in its bear case scenario analysis that Microsoft is insulated, but Amazon has the “most downside.” “1) AMZN has the most downside, with MSFT most insulated in a bear case scenario; 2) META has the least downside in Internet in a bear case scenario; 3) AMZN & GOOGL bottomed 3 months prior to the overall market during the last downturn in ’08/09.” Redburn initiates Marriott as sell Redburn initiated the hotel giant with a sell rating, noting it’s having trouble differentiating itself. “While the Starwood deal moved Marriott’s chain scale mix significantly higher, in most other ways Marriott now struggles to differentiate itself from the broader dynamics for the franchisors, and it has amongst the highest EBITDA conversions of any group, leaving little upside to profitability.”
