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

Published Wed, Mar 30 20228:39 AM EDT

Here are Wednesday's biggest calls on Wall Street: Goldman Sachs initiates PayPal as buy Goldman said PayPal has an attractive valuation after falling more than 35% to start the year. "We expect PYPL to return to EPS growth in excess of 20% beyond 2022, which could drive a re-rating of its valuation multiple, driven by secular tailwinds from the digitization of payments and ecommerce growth, abating headwinds after 2022, and product initiatives to improve monetization & market share at Venmo and Paypal." Read more about this call here . Goldman Sachs initiates Block as buy Goldman Sachs said the company formerly known as Square has the tools to "empower businesses and consumers." " SQ is well positioned to benefit from Cash App's growing monetization from new product features (e.g., tax preparation, card spending, cash management, stock investing, Bitcoin) while enjoying ongoing user growth from the network effects of P2P payments, as well as Square's continued share gains within SMB acquiring." Read more about this call here . Morgan Stanley initiates Robinhood as equal weight Morgan Stanley it sees competition weighing on user growth for Robinhood. "Our AlphaWise survey gives us confidence in existing customers expanding their relationship with HOOD, but competition likely weighs on user growth." JPMorgan reiterates Netflix as overweight JPMorgan said in a note to clients on Wednesday that it sees "further global subscriber penetration" for the streaming giant. "We believe NFLX is currently 29% penetrated among the 776M global broadband subscribers, 33% penetrated among the 675M current global Pay TV subscribers, & 31% penetrated among the 712M maximum (or peak) global Pay TV subscribers." Morgan Stanley reiterates Unity Software as overweight Morgan Stanley said it sees the video game software company's non-gaming business as a $25 billion dollar opportunity for Unity . "We See Non-Gaming Create Becoming Larger than Gaming By '27, As It Addresses a $25bn Opportunity." Goldman downgrades Bank of New York Mellon to neutral from buy, upgrades Northern Trust to buy from neutral Goldman said in its downgrade of Bank of New York Mellon that it sees less upside compared to Northern Trust. "We are downgrading BK to Neutral from Buy and upgrading NTRS to Buy from Neutral. We see both stocks offering EPS upside over the near-term from a rapid rise in short-term interest rates; however, we see NTRS's balance sheet position and its deposit mix offering a more sustained case for NII (net interest income) upside relative to BK beyond 2022 – a theme we expect to become a larger driver for the stocks." Bank of America reiterates Apple as buy Bank of America said in a note to clients on Wednesday that iPhone demand remains strong. "Recent media articles suggest Apple plans to produce 20% fewer iPhone SE next quarter given weaker demand as a result of the war in Ukraine. The articles also suggest some order cuts for the entire iPhone 13 range, and some order cuts for AirPods. While these articles might lead some investors to think there is risk to demand, we believe demand for iPhones remains strong based on our analysis of iPhone trade-in prices." Goldman Sachs upgrades Freshpet to buy from neutral Goldman said in its upgrade of the pet food company that the stock is at an inflection point. "We upgrade shares of FRPT to Buy (from Neutral) with a new $136, 12-month price target, as we believe the cold-state pet food market is on the cusp of an inﬂection." Read more about this call here. RBC reiterates Rivian as outperform RBC said the firm's checks show that Rivian's production ramp is improving. "RBC Elements powered data shows improving production ramp, gives us confidence in our 1Q22 delivery forecast." Bernstein reiterates Tesla as underperform Bernstein said that Tesla 's pricing power won't last forever. "Yes, innovation can allow leaders such as Tesla to take price – but only for so long. Ultimately, over time, key innovative features are replicated across all competitors at lower and lower price points." Loop downgrades Wayfair to sell from hold Loop said in its downgrade of Wayfair that direct-to-consumer sales are slowing. "The organic sales trend is naturally slowing for DTC companies as people venture out of their homes and into businesses more often." Jefferies upgrades RH to buy from hold Jefferies said in its upgrade of RH that it has "unmatched pricing power" and a "rare entry point." "With RH trading closer to aspirational brands vs. true luxury brands, we see minimal downside, and investors should feel comforted by its unmatched pricing power across Consumer Discretionary. PT implies > 40% upside." Loop reiterates McDonald's as buy Loop said that its survey checks show McDonald's comps are exceeding expectations again. "Per our contacts, same-store sales were up approximately 5.0% in 1Q including 4.0-5.0% growth over the last five weeks despite facing a significantly more challenging comparison during mid/late March." JPMorgan downgrades Procter & Gamble to neutral from overweight JPMorgan downgraded the stock due to rising costs and FX headwinds. "While we remain positive on P & G's ability to continue to gain share and benefit from reopening in its beauty, shaving, and deodorant categories, we are taking a pause and downgrading PG to Neutral given recent increase in costs, FX headwinds and potential downside risk to consensus." Read more about this call here. UBS initiates Mondelez and Kellogg's as buy UBS said in its initiation of several food stocks that it sees accelerating top and bottom line growth. "In this context, our seven active ratings demonstrate/lack these core tenets: Buy-rated MDLZ , NOMD, K, SMPL and SOVO have reinvested and cut costs to drive accelerated top and bottom line growth, while structural changes in category growth should drive upside for SMPL." Wells Fargo initiates Norwegian and Royal Caribbean as overweight and Carnival as underweight Wells initiated several cruise stocks, noting that "cruise stocks will likely move together as the sector recovers." "We like RCL for its ability to balance yield and capacity growth, get premium pricing for its newer ships and relatively high N. America exposure (both sourcing and as a destination). We like NCLH (PT $27) for its nimble fleet (smallest of group), track record of EBITDA growth via capacity expansion/higher pricing, N. America exposure (80%+ of 2019 revs from U.S.), and skew toward premium customers." Read more about this call here. Deutsche Bank initiates S & P Global as buy Deutsche said in its initiation of the stock that it's a "crown jewel at a discount." "We view SPGI as a high quality asset benefiting from significant recurring revenues (75%), pricing power, and secular market trends around data/analytics, risk management, index-based investing, and ESG that position the company for long-term growth." UBS reiterates FedEx as buy UBS said that it sees upside for FedEx in light of the company's management changes. "The management transition at FDX points to opportunity for FDX to follow a more favorable path of margin improvement in Ground and Express. However, we recognise it is likely necessary for FDX to execute and provide visibility to the potential improvement in order for the stock to reflect stronger EPS potential."

Robinhood CEO and co-founder Vlad Tenev and co-founder Baiju Bhatt pose with Robinhood signage on Wall Street after the company's initial public offering in New York City, July 29, 2021.

Andrew Kelly | Reuters

Here are Wednesday's biggest calls on Wall Street: