Wall Street Downgrades and Upgrades in Focus
On Wednesday, RBC made waves by downgrading Starbucks from outperform to sector perform. They noted that the company’s turnaround is taking longer than initially hoped. Back in November 2024, RBC believed a modest, one-time investment would suffice to revitalize the U.S. operations. However, with ongoing workforce challenges and anticipated additional investments, they found it difficult to maintain that optimism.
In contrast, Wolf upgraded NRG Energy to outperform, citing benefits tied to data centers. They think NRG is poised well, especially with over 6 GW of gas construction potential. The company now has a more diversified portfolio and nearly double-digit free cash flow yields make it appealing.
Trust also upgraded Block from hold to buy, seeing promising upside. After a substantial workforce reduction, they feel there’s potential for improved returns on capital as free cash flow generation picks up.
Citi upgraded Constellation Brands to a neutral acquisition rating, anticipating a boost in beer sales. Their assessment shows expectations for top-line acceleration into Q4 2027, as they expect improvements in sales data amidst challenges in the beer segment.
Deutsche Bank upgraded SL Green from hold to buy, expecting solid asset sales and refinancing to reassure investors. They believe that with AI concerns in mind, the capital markets could be a crucial catalyst, particularly since New York remains a robust office market.
On the other hand, UBS downgraded Logitech from buy to neutral. They pointed out that the cycle of positive consensus revisions appears to be slowing down, despite Logitech’s previous ability to pass on costs effectively, enhancing their margins.
RBC is also set to acquire Weatherford, indicating that the oilfield services company’s stock is too appealing to dismiss. They believe the current valuation already factors in various risks, especially related to international tension, and they’re optimistic about Weatherford’s potential performance.
Citi has resumed coverage on Netflix, highlighting a few potential positive catalysts ahead, including room for raising 2026 EBIT guidance, anticipated U.S. price increases, and larger share buybacks, suggesting possible upside of around 5% to 17%.
TD Cowen upgraded Total Energy from hold to buy, explaining that oil and gas companies are currently thriving. They noted TTE’s stellar free cash flow growth and production capacity as key strengths.
Bank of America continues to back NVIDIA, asserting a strong position following an engaging Q&A session at their GTC conference, reaffirming a buy recommendation with a price objective of $300.
UBS also upgraded Knight Swift from neutral to buy, observing favorable conditions for the carrier amidst declining truckloads and rising spot rates that indicate a tighter market.
Meanwhile, Compass Points initiated coverage on Lineage with a buy rating, describing the warehousing company as defensively positioned with a 12-month price target of $47 per share.
Morgan Stanley remains neutral on Tesla, emphasizing that the future of the stock may hinge on the expansion of their unsupervised robotaxi fleet.
Guggenheim is still aiming to buy Disney, albeit with a reduced price target of $115, down from $140, while expressing confidence in the new CEO’s direction.
Oppenheimer began coverage on Graham, describing the defense supplier as compelling at its current price point, particularly for its manufacturing of high-grade stainless steel products.
Lastly, Bernstein reiterated its positive outlook on Micron, raising the price target from $330 to $510 per share ahead of their upcoming earnings report, signaling continued strength in the memory market.
