Wall Street analysts upgrade stocks like Boeing and Home Depot on hopes the market has bottomed

Published Fri, Mar 27 202010:28 AM EDTUpdated Fri, Mar 27 202010:44 AM EDT

Key Points

Deutsche Bank upgraded Qualcomm to buy from hold.
Bank of America downgraded JPMorgan to neutral from buy.
Loop Capital upgraded Home Depot to buy from hold.
JPMorgan upgraded Deere to neutral from underweight.
Bank of America downgraded Caterpillar to neutral from buy.
Berenberg downgraded UPS to hold from buy.
BTIG initiated CrowdStrike as buy.
Morgan Stanley upgraded WW to overweight from equal weight.
Morgan Stanley downgraded Quest Diagnostics to equal weight from overweight.
William Blair upgraded Generac to outperform from market perform.
Evercore ISI downgraded Macy's, Guess, L Brands and Under Armour to in line from outperform .
SunTrust upgraded Constellation Brands to buy from hold.
Argus upgraded Boeing to buy from hold.
Argus upgraded Coca-Cola to buy from hold.
UBS upgraded Lam Research to buy from sell.
New Street upgraded Tesla to buy from neutral.

(This story is for CNBC PRO subscribers only.) The market volatility continues as investors look for a bottom, but Wall Street analysts are still finding buying opportunities. Stocks getting upgrades on Friday include Qualcomm, Tesla, Home Depot, Generac, and more. Here are the biggest calls on Wall Street on Friday: Deutsche Bank upgraded Qualcomm to 'buy' from 'hold' Deutsche Bank said in its upgrade of the stock that it sees an "attractive" risk/reward. "While the semiconductor sector overall has yet to underperform by a magnitude that yields a meaningfully more attractive opportunity, there are names within the sector that have corrected by a significant amount despite possessing positive attributes we highlighted in our recent Semiconductor Sector investment framework report. We believe QCOM is one of those names, even after downwardly revising our near-term estimates and taking a more conservative view on valuation. Consequently, we are upgrading QCOM from a Hold to a Buy rating, with our P/T now at $85." Loop Capital upgraded Home Depot to 'buy' from 'hold' Loop said in its upgrade of the stock that it expects the company to be "less impacted" from the coronavirus than other retailers. "We believe HD will be less impacted than most retailers based on the simple fact that its stores are expected to remain open. Construction is considered an essential industry, and we believe many projects are ongoing despite the spike in unemployment overall. Our expectation for SSS -3% in 2020 only reflects growth YoY in F1Q. Our F2020 EPS estimate of $8.52 would represent a 17% decline." Bank of America downgraded JPMorgan to 'neutral' from 'buy' Bank of America said the company was a "best-in-class" stock which was "reflected in premium valuation." "We lower our PO to $100, after reducing our EPS estimates by 24% in '20 and 34% in '21, reflecting a US recession, followed by a U-shaped recovery – at least two years of challenged EPS. We expect ROTCE to drop to 13.5% in '20 and 12% in '21, implying that JPM 's TBV multiple of 1.6x reflects current fair value and assumes the stock continues to trade with a "best in class" premium relative to ROTCE. And, even in V-shaped recovery scenario, we see peers bouncing back harder than JPM, given average valuation of just 0.92x TBV with little-to-no danger of TBV erosion." JPMorgan upgraded Deere to 'neutral' from 'underweight' JPMorgan upgraded the stock mainly on valuation. "We are upgrading DE from Underweight to Neutral on valuation, though we remain cautious on the structural challenges facing US agriculture (DE's core market), magnified by a strong US dollar and current fundamentals in ethanol Additionally, we are updating our DE, CNHI and AGCO models for the potential impact of COVID-19; we assume substantial cuts to FY'20, particularly in Europe, before a snap back in FY'21." Bank of America downgraded Caterpillar to 'neutral' from 'buy' Bank of America downgraded the stock and said it sees supply side "uncertainty" due to the coronavirus crisis. " Caterpillar has a strong balance sheet and nearly 4% dividend yield, but so do a lot of other companies. CAT has now suspended its 2020 outlook on the back of others like Cummins and Deere doing the same thing, which only underscores the degree of demand and supply side uncertainty emanating from the COVID-19 outbreak. Consensus EPS for 2020 of $8.60 is still above the low end of guidance issued nearly two months ago. We cut estimates materially for the 2nd time since March 11th, and see CAT earning $5.75 in 2020." BTIG initiated CrowdStrike as 'buy' BTIG said the company's growth profile was "unparalleled" in the cybersecurity space. "In fact, at its current scale, CRWD is the most successful security company that has ever existed. In our opinion, the company is in the sweet spot of its growth cycle and has many characteristics that remind us of PANW back in its prime in the 2013 - 2015 timeframe. Specifically, CRWD is dominating the $7B endpoint security space. The company held 6% market share in 2019 and is winning 30% of the market's incremental growth." Morgan Stanley upgraded WW to 'overweight' from 'equal weight' Morgan Stanley said the weight loss company would be a beneficiary once the coronavirus pandemic passes. "However, once the "cocoon" phase ends and shelter in place measures are raised, we see WW as a potential beneficiary of changes in consumer behavior. We anticipate a heightened focus on health, wellness, and weight loss after weeks of gym closures, stress eating, and limited physical activity. Additionally, the extent to which existing subscribers are currently showing greater interest and spending more time engaging with the app during the cocoon phase could lead to better retention curves for these subscribers over the medium term, which we incorporate into our $47 Bull case valuation." Morgan Stanley downgraded Quest Diagnostics to 'equal weight' from 'overweight' Morgan Stanley downgraded the clinical laboratory company and said it sees a more "balanced" risk/reward. "Accordingly, we have updated our models for LabCorp and Quest Diagnostics to reflect a more challenging environment, and in conjunction we are lowering our rating for Quest Diagnostics to EW from OW. While we continue to see Quest Diagnostics as a longer term beneficiary from industry consolidation to the national labs, with only 7% upside to our base case price target, we view risk-reward as balanced for DGX shares." William Blair upgraded Generac to 'outperform' from 'market perform' William Blair said it sees an attractive entry point for the manufacturer of backup power generation products "Although the coronavirus outbreak will weigh on Generac 's near-term performance in both residential and industrial markets, we believe the roughly 20% decline in the share price from the recent high offers an attractive entry point for long-term investors. In the last year, Generac has rapidly evolved from a generator company whose financial performance was largely tied to major weather events, to a company with a broader set of growth opportunities, including supporting the rollout of 5G infrastructure, battling power outages in California, supplying solar energy to residences, and offering whole-home energy management solutions." Evercore ISI downgraded Macy's, Guess, L Brands and Under Armour to 'in line' from 'outperform' Evercore downgraded several retailers due to "lack of visibility" and "significant near-term earnings risk." "On the flip side, though not reflective of a change in our view of their pre-coronavirus underlying franchise values, we are downgrading M , GES , LB , and UAA to In Line from Outperform and closing the associated long positions in our model portfolio. We believe these shares will remain range-bound given the lack of visibility plus significant near-term earnings risk from the infamous coronavirus's disruptive effect on global demand, already pressured margin structure, potential for significant operating deleverage on fixed costs, and in some cases added financial leverage (see table below). We hope to revisit these ideas as we gain more clarity regarding the timing and nature of a global recovery from this unprecedented pandemic." SunTrust upgraded Constellation Brands to 'buy' from 'hold' SunTrust said in its upgrade of the beverage maker that it saw an attractive entry point. "We are upgrading STZ to Buy from Hold and raising our 12-month PT to$200 from $150. In our opinion, the COVID-19 related pullback has created an attractive entry point for a company with a resilient portfolio and strong FCF generation. Second, we believe investor expectations for STZ's beer portfolio growth (ex. COVID-19), new product launches, and potential return from its investment in Canopy are now realistic. Third, we believe STZ's ~$2B of annual FCF generation potential will be clearer to investors in FY21 as it "bends the curve" on its 7 year $4B Beer capacity expansion." Argus upgraded Boeing to 'buy' from 'hold' Argus upgraded the stock mainly on valuation. BA shares have underperformed over the past quarter, declining 45% compared to a 23% drop by the S & P 500. In the past month, the shares have been on an even wilder ride, falling as low as $89 before doubling in recent days. Investors have responded to numerous developments, both positive and negative. Given the production developments as well as the value now present after the sharp stock price decline, we think a BUY rating is warranted. Our 12-month target price is $220, or 13-times our 2021 EPS estimate. Argus upgraded Coca-Cola to 'buy' from 'hold' Argus said in its upgrade of the stock that it's a high-quality company. "In this turbulent environment, Argus is recommending that investors dollar-average into existing long-term positions in the highest-quality stocks. Investors may also consider initiating new positions at discounted prices, while being aware of the risks of future volatility in individual positions. Historically, periods of severe stock-market turbulence have proven to be good times for investors with a longer-term time horizon to focus on the highest-quality and financially strongest names. We believe Coca-Cola is one of these companies." UBS upgraded Lam Research to 'buy' from 'sell' UBS said in its double upgrade of the stock that it sees a buying opportunity for the designer and manufacturer of semiconductor processing equipment. "Now though, equipment suppliers face supply constraints that are much more acute than on the semis side. We think these are worse for LRCX given its Livermore CA assembly location and its generally heavier reliance on key suppliers which themselves rely heavily on Malaysia. For these reasons, we should see a significant reset across the equipment universe for CQ2 revenue. To us, this removes a lot of our concerns around revenue trajectory and should enable the market to once again focus on solid underpinnings for WFE intensity over the longer-term. Specific to LRCX, as we start to look into 2021, the outlook for memory is bright and we remain bullish on MU for example. We think that the supply side equipment constraints will enable memory suppliers to even better manage the ramp in supply such that the memory industry could force its customer to commit more firmly to product." New Street upgraded Tesla to 'buy' from 'neutral' New Street said in its upgrade of the company that it has "industry-leading" profitability and a strong premium brand. " Tesla cars are such a desirable innovation that demand exceeds the scope of the traditional premium market. 60% of trade-ins for the Model 3 in the U.S. are non-premium, which, extrapolated globally, means Tesla's full portfolio will address a 20m+ unit market. This leaves ample room for Tesla to grow as fast as production capacity can grow. Multi-year lead on competition on technology and industry-leading profitability. In the last 7 years, Tesla has improved its electric powertrain performance by 40%, and today, competition is still behind the first Model S. This gives Tesla years to build a leading market share and a strong premium brand. In addition the firm already demonstrates industry-leading profitability."

Scott Glenn is in charge of asset protection for Home Depot.

Source: CNBC

(This story is for CNBC PRO subscribers only.)

The market volatility continues as investors look for a bottom, but Wall Street analysts are still finding buying opportunities. Stocks getting upgrades on Friday include Qualcomm, Tesla, Home Depot, Generac, and more.

Here are the biggest calls on Wall Street on Friday:

Deutsche Bank upgraded Qualcomm to 'buy' from 'hold'

Deutsche Bank said in its upgrade of the stock that it sees an "attractive" risk/reward.

"While the semiconductor sector overall has yet to underperform by a magnitude that yields a meaningfully more attractive opportunity, there are names within the sector that have corrected by a significant amount despite possessing positive attributes we highlighted in our recent Semiconductor Sector investment framework report. We believe QCOM is one of those names, even after downwardly revising our near-term estimates and taking a more conservative view on valuation. Consequently, we are upgrading QCOM from a Hold to a Buy rating, with our P/T now at $85."

Loop Capital upgraded Home Depot to 'buy' from 'hold'

Loop said in its upgrade of the stock that it expects the company to be "less impacted" from the coronavirus than other retailers.

"We believe HD will be less impacted than most retailers based on the simple fact that its stores are expected to remain open. Construction is considered an essential industry, and we believe many projects are ongoing despite the spike in unemployment overall. Our expectation for SSS -3% in 2020 only reflects growth YoY in F1Q. Our F2020 EPS estimate of $8.52 would represent a 17% decline."