Here are Wednesday's biggest analyst calls: Netflix, Tesla, Visa, Warby Parker, Penn, Disney & more

Published Wed, May 18 20228:40 AM EDTUpdated Wed, May 18 202211:52 AM EDT

Here are Wednesday's biggest calls on Wall Street: Goldman Sachs upgrades Endeavor Group to buy from neutral Goldman said it sees an attractive entry point into the media and talent company. "Shares of Endeavor have traded down 30% since its IPO and 45% YTD driven by i) fundamental concerns that a weakening economy will impact demand for its live events, talent representation services and advertising products as well as ii) technical concerns including higher interest rates, IPO lockups and investor positioning, in our view." Piper Sandler reiterates Tesla as overweight Piper Sandler lowered its price target on Tesla to $1,035 per share from $1,260, but said the stock is still a "cornerstone holding." "We are cutting our estimates and price target to reflect Covid-related weakness in China, as well as a higher WACC (weighted average cost of capital) assumption in our DCF model. However, we still regard TSLA as a cornerstone holding in any 'advanced mobility' portfolio." Goldman Sachs initiates Visa and Mastercard as buy Goldman said it sees more upside on Visa and Mastercard , adding that the stocks are underappreciated. "We are most constructive on V/MA, as we believe these businesses are underearning given cross-border revenues are on recovery trajectories but still depressed, which along with higher inﬂation should provide an idiosyncratic growth impulse and a partial offset to any macro weakness. Read more about this call here. Wells Fargo reiterates Disney as overweight Wells said in a note to clients that it sees more upside in Disney shares as the company continues to add streaming subscribers. "We like the potential for upside to streaming net add estimates for the next couple of quarters, and these two already have some of the highest net add forecasts in our coverage for Q2/Q3. Wells Fargo reiterates Netflix as equal weight Wells said that Netflix shares should come "under further pressure." "While already beaten up, we think NFLX could face more negative estimates revisions in the weeks/months ahead driven by higher staff cash comp, investments into AVOD, restructuring, etc. We think 2022 will be a rebuilding year, with NFLX v2.0 not emerging till sometime next year. If investments drag margins further, we think the stock could come under further pressure." Evercore ISI upgrades Cardinal Health to outperform from in line Evercore said that Cardinal Health's stock is an "underpriced comeback." "While we agree there are meaningful improvements that must be made to the Medical segment in FY'23 and beyond, the business is likely worth more than $0 per share, and our new price target of $68 per share reflects a more appropriate valuation of both businesses, while still accounting for structural differences vs peers." Berenberg initiates US Foods as buy Berenberg said it likes US Foods' "superior front-end technology compared to peers and the differentiated omnichannel presence." " USFD is a large-scale food distributor with national footprint that provides a broad line of products, as well as e-commerce, technology and business solution expertise to a well-diversified customer base. Our upside is driven by scale, superior front-end technology compared to peers and the differentiated omnichannel presence." Guggenheim names Paramount and Meta Platforms top picks Guggenheim said it's bullish on Paramount's margin expansion prospects. The firm also called Meta a top pick, saying it's bullish on its metaverse growth. "At Paramount, we highlight opportunity for greater potential margin expansion than currently reflected in consensus estimates. ... The company [Meta] remains focused on the long term (i.e., exiting 2030s) with further development of its metaverse-focused initiatives though is increasing its discipline around current investments." Bernstein upgrades Monster to outperform from market perform Bernstein said the beverage giant continues to gain share. "We concluded that persistent market share losses in the U.S. were concerning, and that we would like to see an improvement in U.S. market share data before we turned buyers. In the last three months, performance has rapidly improved and MNST actually gained share in the latest period." Baird names Block a fresh pick Baird named the company formerly known as Square a fresh pick and said it's a "long-term large-cap tech winner." "There are still some uncertain characteristics (Afterpay impacts from consumer weakening/ rising rates, Seller hitting law of large numbers, CashApp tough comps), yet this is a long-term large-cap tech winner with likely 20-25%+ revenue growth for years." Wells Fargo initiates ServiceNow as overweight Wells said that it likes ServiceNow's "balanced growth profile." "Furthermore, given the broad-based sell-off, we continue to focus on the highest quality franchises and are tending toward those businesses with strong platform positioning and balanced growth profiles." Jefferies upgrades Penn to buy from hold Jefferies said in its upgrade of the stock that regional gaming is a beneficiary in "uncertain times." "We upgrade PENN to Buy from Hold on the recent weakness, which has reduced the shares to a $30 level that comfortably reflects the stable cash generation of the land-based casino business, while assigning de minimis value for the digital prospects." Goldman Sachs downgrades Warby Parker to neutral from buy Goldman said it sees "less upside potential" for the eyewear company. "While we continue to see several of these drivers as longer-term opportunities, we have fading conﬁdence in the outlook for revenue outperformance and timeline to underlying GAAP proﬁtability following several earnings releases where the revenue growth and proﬁtability outlook have disappointed versus our expectations, driving a more balanced risk/reward with less upside potential to valuation." Read more about this call here. Bank of America downgrades Carrier to neutral from buy Bank of America said in its downgrade of the air conditioning, heating and refrigeration company that it sees residential headwinds. "Out of the HVAC stocks we cover, Carrier has the highest relative exposure to residential HVAC equipment. ... CARR shares (down 26% year-to-date) have already sold off, and valuation is roughly in line with our coverage." UBS reiterates Peloton as sell UBS lowered its price target on Peloton to $13 per share from $30 and said the business is too "capital intensive" and that the company needs to reduce marketing spend. "We are lowering our price target for Peloton to $13, down from $30 previously, driven by lower sales and EBITDA in outer years, and lower than expected Q4 profitability." Roth initiates Five9 as buy Roth said that the valuation for the cloud-contact solutions software company is now more "palatable." "We believe FIVN remains one of the premier publicly traded SaaS (service-as-a-software) players. ... Now, after sidestepping the fireworks of its mid-2021 near-miss acquisition (when we dropped coverage), we view its 9.3x valuation as more palatable." Roth upgrades Salesforce to buy from neutral Roth said in its upgrade of the stock that it sees a buying opportunity and is getting more constructive on the stock. "Given a near 50% sell-off versus their 52-week highs, we believe CRM 's resulting 5.6x run-rate revenue multiple now adequately factors in its less savory operational tendencies."