Analysts are starting to say it's time to buy defensive stocks like Walmart, P&G & more in Tuesday's calls of the day

Published Tue, Mar 17 202010:08 AM EDTUpdated Tue, Mar 17 202010:41 AM EDT

Key Points

Oppenheimer upgraded Walmart to outperform from perform.
Deutsche Bank upgraded Procter & Gamble to buy from hold.
Needham initiated Zoom as buy.
Evercore ISI upgraded Pepsi to outperform from in line.
Bernstein upgraded JD.com to outperform from market perform.
MKM upgraded Boston Beer to buy from neutral.
MKM upgraded Electronic Arts to buy from neutral.
Cowen upgraded Square to outperform from market perform.
Bank of America downgraded Royal Caribbean to underperform from neutral.
Wedbush added Facebook, Amazon and Peloton to the best ideas list.

(This story is for CNBC PRO subscribers only.) Wall Street analysts are recommending staple stocks as uncertainty from the coronavirus pandemic continues to grip the market. A slew of companies received upgrades on Tuesday including Walmart, Procter & Gamble and more. Here are the biggest calls on Wall Street on Tuesday: Oppenheimer upgraded Walmart to 'outperform' from 'perform' Oppenheimer said the company is well-positioned in an uncertain economic backdrop. "Given shares now pulling back 11% since March 10th (vs. a 17% decline in the S & P 500), we view a slightly more accommodative valuation coupled with the potential for still attractive relative financial delivery to drive outperformance from here. As we look forward, we believe the company is well positioned to still deliver on financial targets, and shares could benefit from money flows shorter-term as investors likely continue to seek safety in a more uncertain global economic backdrop. As we have written about previously, grocers have clearly benefited from consumer stock-up activities lately. In our updated food retailing/discounter coverage, we rank COST and DG as our top picks followed by WMT ." Deutsche Bank upgraded Procter & Gamble to 'buy' from 'hold' Deutsche upgraded the stock and said it's attractively defensive. "We upgrade PG to Buy today (estimates and price target of $130 unchanged— noting multiple prior EPS tweaks over the past month1 ) for several reasons. For one thing, the stock remains attractively defensive in a still-volatile and uncertain market (PG down -14% over the past month vs. the S & P 500 -29%). However, we also see PG as highly capable of outperforming investors' fundamental expectations over the next 12 months—driving compelling absolute upside (+20% base case)." Needham initiated Zoom as 'buy' Needham initiated the teleconferencing company as a buy said the coronavirus is driving an "enduring acceleration" towards working from home. "We think Zoom's exceptionally easy to use Meetings product has both enabled and benefited from a LT secular shift towards WFH. We think COVID-19 is driving an enduring acceleration of this shift. In the near-term, our checks confirm significant increases in business activity, esp. in COVID hotspots, which admittedly could be mitigated by delays in closing larger enterprise deals. Independent of COVID, we foresee an inflection in ZM 's Phone business in F'21, as ZM embraces the channel and standalone sales of Phone. Net, we think ZM will see upside results throughout the COVID-driven downturn, while being a meaningful beneficiary longer term." Evercore ISI upgraded Pepsi to 'outperform' from 'in line' Evercore said in its upgrade of the stock that it believes the stock is defensive with a strong balance sheet. "With PEP 's shares down ~22% since February 21 highs vs 18% decline for the XLP, we believe investors under-appreciate the firm's relatively defensive business model vs the rest of the staples group. As we discuss in greater detail below, investors looking for "quarantine" names within staples should consider PEP due to the firm's strong balance sheet, attractive 3.6% dividend yield, geographic mix, low on-premise exposure, relatively defensive portfolio, and relatively high exposure to lower input cost from firm's ownership of bottling and DSD networks in the U.S." Bernstein upgraded JD.com to 'outperform' from 'market perform' Bernstein called the China e-commerce company a "100% China play" and said the company continues to outperform peers. "Near-term COVID-19 impact has already peaked in China. JD is a 100% China play. In the worst period of COVID-19 in China, JD outperformed peers. Now while the rest of the world is experiencing what China had 2 months ago, things in China are already turning the other direction. We raise JD's revenue growth to 18% this year and 20% next year, and net margin to expand to 2.4% by 2021. We estimate that EPS doubles in the next three years. Our new TP of US$52/share represents 31% upside potential as of Mar 13th close." MKM upgraded Boston Beer to 'buy' from 'neutral' MKM said in its upgrade of the stock that the beer industry should hold up "remarkably well" in a weaker economic period. "During a period when the fundamental uncertainty plagues valuations, we believe Boston Beer will not experience much operational volatility: 1) The Beer industry holds up remarkably well during weak economic periods; 2) Boston Beer grew every quarter during the recession; 3) Boston Beer is under-indexed (relative to the industry) to on-premise bars/restaurants; 4) Off-premise consumption offers an earnings-neutral substitute to lost on-premise sales; 5) Boston Beer is effectively debt free; and 6) Boston Beer has an available repurchase program. The largest risk to the upgrade would be disruption at company-owned or third-party production facilities." MKM upgraded Electronic Arts to 'buy' from 'neutral' MKM said in its upgrade that video game makers are among the "least impacted businesses" to the coronavirus and "beneficiaries" of a quarantine. "In our view, EA and its video game peers are among the least impacted businesses to the coronavirus and in fact are likely beneficiaries of a quarantine. As such, we remain confident our 3%-4% revenue growth forecast in FY21 is reasonable and potentially conservative. In addition, we not only anticipate accelerating growth in FY22 but also a return to MSD revenue growth and LDD EPS growth. Our confidence in this view is built on the consistency from a strong core of games in FIFA, Madden, The Sims and Apex Legends." Cowen upgraded Square to 'outperform' from 'market perform' Cowen said in its upgrade of the stock that the near-term pull-back has created a "compelling" entry point. "We are upgrading the shares of SQ to Outperform as the precipitous near-term pull-back has created the most compelling entry point in the stock in over three years, in our view. Despite likely near-term COVID-19 impacts we are comfortable that SQ's TAM is expanding, long-term revenue growth can exceed 20% and the company has ample levers to improve profitability." Bank of America downgraded Royal Caribbean to 'underperform' from 'neutral' Bank of America downgraded the stock and said it sees a "long recovery ahead" due to the coronavirus. "We estimate negative 2020 EPS with EBITDA down over -50% this year, taking into account 60 days of shut down, longer term demand impairment, and a long recovery period. The impact of this virus is clearly unprecedented across all of travel and with the cruise industry closed, we believe covenant/dividend risk is rising at RCL. While we are clearly late, we lower NCLH to Neutral from Buy (PO to $18) and RCL to Underperform from Neutral (PO to $25; dividend rating to stable/lower)." Wedbush added Facebook, Amazon & Peloton to the 'best ideas list' Wedbush added Facebook, Amazon, and Peloton to its best ideas list and said it sees the stocks as safe-havens during the coronvirus. "We view Amazon as uniquely positioned to gain meaningful market share across a number of verticals in a multitude of countries driven by coronavirus-related changes in consumer behavior. ... Facebook has likely seen significant upticks in user engagement and hence ad impression growth across multiple properties driven by coronavirus fears. ... Additionally, not only is PTON arguably the company in our coverage best insulated from the current coronavirus pandemic, but increasingly we see PTON as a potential beneficiary of widespread social distancing efforts, accelerating what we believe is already an inevitable shift.

A customer pays for her groceries after shopping at a Walmart store ahead of the Thanksgiving holiday in Chicago.

Kamil Krzaczynski | Reuters

(This story is for CNBC PRO subscribers only.)

Wall Street analysts are recommending staple stocks as uncertainty from the coronavirus pandemic continues to grip the market. A slew of companies received upgrades on Tuesday including Walmart, Procter & Gamble and more.

Here are the biggest calls on Wall Street on Tuesday:

Oppenheimer upgraded Walmart to 'outperform' from 'perform'

Oppenheimer said the company is well-positioned in an uncertain economic backdrop.

"Given shares now pulling back 11% since March 10th (vs. a 17% decline in the S&P 500), we view a slightly more accommodative valuation coupled with the potential for still attractive relative financial delivery to drive outperformance from here. As we look forward, we believe the company is well positioned to still deliver on financial targets, and shares could benefit from money flows shorter-term as investors likely continue to seek safety in a more uncertain global economic backdrop. As we have written about previously, grocers have clearly benefited from consumer stock-up activities lately. In our updated food retailing/discounter coverage, we rank COST and DG as our top picks followed by WMT."

Deutsche Bank upgraded Procter & Gamble to 'buy' from 'hold'

Deutsche upgraded the stock and said it's attractively defensive.

"We upgrade PG to Buy today (estimates and price target of $130 unchanged— noting multiple prior EPS tweaks over the past month1 ) for several reasons. For one thing, the stock remains attractively defensive in a still-volatile and uncertain market (PG down -14% over the past month vs. the S&P 500 -29%). However, we also see PG as highly capable of outperforming investors' fundamental expectations over the next 12 months—driving compelling absolute upside (+20% base case)."

Needham initiated Zoom as 'buy'

Needham initiated the teleconferencing company as a buy said the coronavirus is driving an "enduring acceleration" towards working from home.

"We think Zoom's exceptionally easy to use Meetings product has both enabled and benefited from a LT secular shift towards WFH. We think COVID-19 is driving an enduring acceleration of this shift. In the near-term, our checks confirm significant increases in business activity, esp. in COVID hotspots, which admittedly could be mitigated by delays in closing larger enterprise deals. Independent of COVID, we foresee an inflection in ZM's Phone business in F'21, as ZM embraces the channel and standalone sales of Phone. Net, we think ZM will see upside results throughout the COVID-driven downturn, while being a meaningful beneficiary longer term."