Here are Wednesday's biggest analyst calls of the day: Netflix, Amazon, FedEx, McDonald's & more

Published Wed, Jun 23 20218:22 AM EDTUpdated Wed, Jun 23 202110:49 AM EDT

Key Points

JPMorgan downgrades Carvana to neutral from overweight.
Citi upgrades United Rentals to buy from neutral.
Citi opens a positive catalyst watch on Verizon.
Wells Fargo reiterates Netflix as overweight.
Wells Fargo reiterates McDonald's as overweight.
Morgan Stanley names Alcoa a top pick.
Telsey reiterates Amazon as overweight.
Canaccord downgrades Plug Power to hold from buy.
KeyBanc upgrades Parker-Hannifin to overweight from sector weight.
Deutsche Bank initiates Carrier as buy.
Cowen names Under Armour a best idea.
Goldman Sachs adds Intercontinental Exchange to the conviction buy list.
Barclays reiterates FedEx as overweight.
Jefferies reiterates Charles Schwab as buy.
Telsey reiterates Peloton as outperform.
Goldman Sachs reiterates Micron as buy.
R5 initiates Five Below as buy.

Here are the biggest calls on Wall Street on Wednesday: JPMorgan downgrades Carvana to neutral from overweight JPMorgan said in its downgrade of the auto retailer that the risk/reward is "less favorable." "While we continue to like CVNA 's disruptive business model and related L-T growth potential, we believe the recent rebound in shares coupled with a meaningful pull back in brick & mortar auto retailers, makes the near-term relative risk-reward less favorable." Read more about this call here . Citi upgrades United Rentals to buy from neutral Citi said in its upgrade of the equipment rental company that it saw "further upside." "Our outlook has become more balanced, but we conclude it is too early to call for an end of the upcycle and would be selectively leaning in to the sector on the back of this sharp pullback. We add URI to our list of Buys as we think positive estimate revisions can support further upside to the stock." Citi opens a positive catalyst watch on Verizon Citi reiterated its neutral rating on shares of Verizon but said it has a "positive view" of the company's next earnings report. "Net-net, we believe the potential for Verizon to exceed the current consensus on phone net adds and EPS should provide a positive catalyst for VZ shares over the near-term. We are adding the stock to Citi's positive catalyst watch list (30-days). We maintain our Neutral view on a 12-month basis, largely on valuation." Wells Fargo reiterates Netflix as overweight Wells Fargo restated its overweight rating on shares of the streaming giant, saying it's at an attractive entry point. "We see NFLX transitioning from Growth to GARP as the stock sheds its net add past and reemerges as an earnings growth company. We think bottom-line performance is becoming steady enough that the company could even provide longer-term EPS growth guidance." Wells Fargo reiterates McDonald's as overweight Wells Fargo said Europe's reopening could be "dynamite" for McDonald's stock. "With shares trading at 1.1x the S & P 500's EV/EBITDA, or near the 5-year floor, we see little room to absorb positive estimate revisions without moving higher, and we continue to view the stock's next twelve months risk-reward favorably at current levels. On the back of accelerating vaccinations, key international operated markets are rapidly reducing restrictions, and consumers are quickly responding." Morgan Stanley names Alcoa a top pick Morgan Stanley named the industrial aluminum producer a top pick and said it had an "attractive" valuation. " AA is our top pick... as we expect the company to benefit from a structural shift in the aluminum market led by China's decarbonization policies (~5% of country's carbon emissions) and the 45Mt capacity cap leading demand to outpace supply by 2023. AA is trading at 2.7x EV/EBITDA on our new 2022 estimates well below its historical average of 7.5x, and we see material upside risk to consensus estimates." Telsey reiterates Amazon as overweight Telsey restated its overweight rating on shares of Amazon and said the e-commerce company's Prime Day was a success. "We believe Amazon had a solid Prime Day, likely in line with our sales forecast of $11B-$12B, up 6%-16% over Prime Day 2020, with US sales of $8.0B- $8.5B. We believe the 2021 Prime Day benefited from a favorable macro environment, including the ongoing shift toward online, strong discretionary demand, a larger global Prime member base, a wider product assortment, particularly private brands, and an increase in participation by small businesses." Canaccord downgrades Plug Power to hold from buy Canaccord downgraded the hydrogen fuel cell company mainly on valuation. "We believe PLUG is transitioning to more of an operational phase and will need to demonstrate profitability improvements to justify its healthy valuation. Given the dynamics, we are moving to a HOLD rating and $31 price target, which is based on applying a 12.5x multiple (previously 25x) to our '24 sales estimates of $1.7B." KeyBanc upgrades Parker-Hannifin to overweight from sector weight KeyBanc said in its upgrade of the motion and control tech company that the share underperformance was "overdone." "In short, we still believe PH is early in a multiyear upcycle, with continued room to push margins more clearly into the top quartile of its peer group, further supported by additional value-creating acquisitions that improve PH's profitability mix while balancing cyclicality." Deutsche Bank initiates Carrier as buy Deutsche Bank began coverage of the multinational home appliance company and said it had an "improving" balance sheet. " Carrier ticks a lot of the boxes that investors care about right now: 1) Significant non-residential construction exposure, 2) Exposed to the secular theme of indoor air quality/decarbonization, 3) Self-help margin story, as management executes on Carrier 700, 4) Portfolio change, and 5) An improving balance sheet that creates increasing optionality in future years." Read more about this call here. Cowen names Under Armour a best idea Cowen called the sports apparel and equipment company a top idea and said it sees upside to consensus. "The sector's recent valuation contraction creates an improved risk/reward opportunity, particularly for UAA which is down 20% since beating Q1 earnings. We see upside to management's guidance and consensus estimates into FY23. Improved marketing and go to market processes create a path to significant improvement in growth and returns on capital." Read more about this call here. Goldman Sachs adds Intercontinental Exchange to the conviction buy list Goldman added the stock to its conviction buy list and said it sees "upside" from current levels. "Based on ICE's business mix, today's valuation is at a record 24% discount to the implied SOTP, which we think (a) overly discounts risks from decline in mortgage refi activity (b) ignores momentum in the rest of ICE – particularly in Energy trading amid structural tailwinds in clean energy markets, and (c) doesn't reflect increasing likelihood of resumptions in share repurchases in the next 2-3 quarters." Barclays reiterates FedEx as overweight Barclays confirmed its overweight rating on shares of the shipping giant ahead of its earnings report and said it sees a "post-pandemic opportunity." "We expect strong results and a likely resumption of favorable forward guidance should help lift FedEx shares later this week. ... .Nonetheless, with UPS committing to improving pricing and customer mix in the US package business along with a lower capital spending outlook, we see favorable market dynamics for the more growth- oriented FedEx." Jefferies reiterates Charles Schwab as buy Jefferies kept its buy rating on the financial services company and said it sees healthy retail engagement continuing. "We recently surveyed ~500 individuals in the US regarding their brokerage activity (stocks, crypto, etc). The results confirm our view that retail engagement is likely to remain well above pre-pandemic levels. Recent weekly data from SCHW indicates some stabilization of engagement. While regulatory scrutiny has grown with the record retail activity, any changes we believe will still favor scale players like IBKR and SCHW in the long run." Telsey reiterates Peloton as outperform Telsey said it was bullish on the company' corporate wellness program, which it announced on Tuesday. " Peloton's commercial business has been a small percentage of sales at 1% and has largely consisted of sales of bikes and memberships to hotels. With the acquisition of Precor, Peloton also gained access to Precor's commercial customers in hospitality (e.g., hotels), education (e.g., universities), and other industries. The corporate program is another way to acquire new members and increase the affordability of its products." Goldman Sachs reiterates Micron as buy Goldman Sachs lowered its price target on shares of Micron to $108 from $122 but said it was bullish on the stock ahead of its third-quarter earnings report. "Consistent with the company's positive pre-announcement on May 25, we expect FY3Q (May) revenue to come in marginally above the company's original guided range." R5 initiates Five Below as buy R5 began coverage of the discount retail store and said it sees continuing "sales strength." "As we look at the back half of 2021, higher marketing spending, more of the chain having the Five Beyond offering and a still-strong economy are likely to combine to drive a nicely positive comp, despite the harder compares. The sales strength, in our view, will lead to expense leverage, which will be aided by the move to self-checkout."

A McDonald's restaurant is pictured in Encinitas, California.

Mike Blake | Reuters

Here are the biggest calls on Wall Street on Wednesday: