Here are the biggest calls on Wall Street on Friday. MKM names Uber a top pick MKM named the ride-sharing company as a top pick and said Uber finally had a "line-of-sight" for profitability. "However, we are incrementally bullish on Uber shares because: (1) Potential catalysts could lead to upward revisions to the Street's estimates and an improvement in investor sentiment; and (2) We expect an upward re-rating on Uber shares once investors have a direct line-of-sight into an inflection in profitability." JPMorgan reiterates Royal Caribbean and Norwegian as overweight JPMorgan said the sell-off in stocks like Royal Caribbean and Norwegian was "overdone." "We don't see the recent inflection in global COVID-19 case counts materially impacting the industry's ongoing restart mainly given the well-documented lack of incremental severity of the delta strain, and yet cruise shares now sit ~10% below early December 2020 levels on average, a time when the realization of vaccinated masses was still a long way off, more equity capital raising was on the come, and visibility was low for a resumption of U.S. revenue sailings as well as a significant recovery in bookings." Goldman Sachs adds Textron to its conviction buy list Goldman added the stock to its conviction buy list and said the strength of the business jet market is here to stay. "The business jet market continues to strengthen, in a way that increasingly looks long-term sustainable, particularly in Cessna's categories of the market; while the rest of TXT also has upside drivers. Yet shares still trade at a sizable valuation discount to other aerospace companies, including those with business jet exposure; and consensus estimates look too low. Morgan Stanley reiterates Netflix as overweight Morgan Stanley confirmed its overweight rating on the streaming company ahead of its earnings report next week and said it sees Netflix adding more subscribers as content increases. "A reopening consumer and the lingering effects of 2020's production delays suggest risk to consensus 2Q/3Q estimates. However, more content is on the way, supporting an increase in net additions in 4Q21/'22." Bank of America names Eli Lilly a top pick Bank of America expects Eli Lilly 's earnings to be strong as patient visits increase and said the company has a "peer-leading combination of commercial strength and exciting slate of late-stage programs." "2Q21 should bring favorable y/y comps and tailwinds from normalizing patient visits from COVID-19, with full-year 2021 guidance likely reiterated." Morgan Stanley downgrades Tencent Music Entertainment to equal weight from overweight Morgan Stanley said in its downgrade of Tencent that it was concerned about revenue growth due to new Chinese regulations. "The Ministry of Culture and Tourism issued guidelines on July 12 to prohibit streamers/talent agencies from inducing virtual gifting on live streaming platforms, effective January 1, 2022. Hence, revenue growth could turn negative in 2022. Profit could fall further due to higher revenue sharing." Read more about this call here. Baird upgrades Cintas to outperform from neutral Baird said in its upgrade of the business supply company that it has balance sheet upside. "Investors rarely get quality growth stocks at the basis they really desire; such is the case with Cintas today. Yet with YTD underperformance, a view toward conservative guidance, and a balance sheet flush with optionality, we're getting behind shares again with a view to the long term." Morgan Stanley initiates coverage of Maxar Technologies as overweight In its initiation of coverage, Morgan Stanley said it sees a "margin expansion opportunity" for the space technology company. "Initiate coverage on MAXR at OW with ~47% upside to PT. We see revenue growth accelerating as the company launches its Legion constellation of satellites. Margin expansion opportunity is evident as its Space Infrastructure business stabilizes and diversifies into the U.S. government market." Wedbush reiterates McDonald's as outperform Wedbush kept its outperform rating on shares of the fast-food company and said it sees same-store sales growth upside. "Checks point to U.S. same store sales growth upside in Q2. We believe U.S. SSS growth is likely to exceed Q2 consensus of 23.5% based on our checks. We increase our Q2 SSS growth estimate to 25% from 22%." Bank of America downgrades Dow to underweight from neutral Bank of America said in its downgrade of the chemical company that commodity inflation "looks to be peaking." "Commodity margins continued to inflect through 2Q, with many markets outpacing the underlying crude backdrop. We see this as a risk for a number of chemical chains as China slows, production recovers, and spending shifts from goods to services. … This is leading to a downgrade of LYB to Neutral, and DOW to Underperform." Read more about this call here. Mizuho names Microsoft a top pick Mizuho said Microsoft was one of the firm's favorite stocks to own right now. "We contend that Azure is becoming more powerful, and that MSFT has assembled an impressive collection of cloud assets that will continue to drive strong overall growth for a company its size. MSFT also benefits from its alignment with a number of important trends in software, including digital transformation, AI, DevOps, and security." Loop upgrades The Honest Company to buy from hold Loop said in its upgrade of Honest that investors should buy any weakness in the stock. "After the recent pullback in shares, we think potential destocking pressures in Q2 are more than adequately priced in at the current valuation of approximately 3x 2022 sales. Management has recently maintained that retail demand is strong, and any destocking-related weakness in Q2 should be made up in H2." Goldman Sachs initiates coverage of Live Nation as buy Goldman said the live-events company is best positioned to benefit from the economy reopening. "As the world's largest concert promoter and ticketing platform Live Nation is well positioned to beneﬁt from an expected surge in concert activity following the COVID-19 pandemic (over the near-term) and strong secular growth in the global live events' industry (over the long-term)." Read more about this call here. Goldman Sachs initiates coverage of iHeartMedia as buy Goldman said the media company is well positioned to make the transition from radio broadcasting to digital. "As the leading multi-platform audio media company in the U.S., we believe that IHRT is well-positioned to make the shift from a legacy terrestrial radio broadcaster to a digitally driven audio-media company." Baird reiterates Caterpillar as a top pick Baird said it sees a good setup for Caterpillar through the rest of 2021. "We are in the early stages of positive price inflection which couple with good demand and lower investor sentiment creating good set-up in 2H." Oppenheimer reiterates Starbucks as outperform Oppenheimer restated its outperform rating on the coffee chain and said it sees further upside ahead of the company's earnings report later this month. " SBUX holds a superior setup that keeps us upbeat, and we raise our price target to $140 ahead of 7/27 results. Bottom line: our updated analysis identifies further upside to Street's financial forecasts through 2022." Wells Fargo reiterates Western Digital as overweight Wells confirmed its overweight rating on the disk drive manufacturer and data storage company and said it expects another quarter of earnings per share upside from the stock. "We reiterate our Overweight rating and $100 PT on shares of WDC ahead of the company's F4Q21 results. Our checks point to continued strength in cloud-driven nearline hard disk drive's, an expectation of sustained client solid state drives demand, and slightly higher pricing expectations (HDDs and Flash), we think WD can report another quarter of EPS upside with revenue at or slightly ahead of the high-end of the company's $4.4-$4.6B guide." Stephens reiterates First Solar as overweight Stephens kept its buy rating on First Solar and said it sees more growth. "Ultimately, we believe the world is committed to cleaner energy, which should underpin healthy growth in the solar industry for the foreseeable future."
A Starbucks employee wipes the protective screen as the coffe shop chain operates take away service in Battersea, south-west London on 21 May, 2020 in London, England.
Wiktor Szymanowicz | NurPhoto | Getty Images
Here are the biggest calls on Wall Street on Friday.