Sergey_P
The S&P500 (SP500) closed in the red on Friday, after an eventful week that saw a mixed August jobs report leaving investors worried about economic growth as well as earnings reports from firms including Broadcom.
For the week, the Nasdaq (COMP:IND) fell marginally, while Dow (DJI) lost 0.4%.
Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:
Intel downgraded by Erste on worries over AMD competition
Research firm Erste downgraded semiconductor giant Intel (INTC) from Hold to Sell, citing increased competition from AMD. Erste analysts said that AMD's CPUs have become very competitive compared to Intel's offerings, as Lisa Su-led AMD has made progress in both hardware and software milestones.
Meanwhile, Citi analyst Christopher Danely said Intel should get out of foundry business in the best interest of shareholders.
Barclays downgrades Super Micro Computer over limited AI margin visibility
Super Micro Computer (SMCI) has continued to grab limelight as Barclays downgraded the IT company to Equal-Weight from Overweight, citing uncertainty around its AI margins and visibility on internal controls.
Analyst George Wang highlighted factors, such as “limited visibility on forward AI server gross margin trends, customer erosion, weaker competitive positioning, and higher working capital requirements,” as reasons behind the ratings adjustment. The brokerage also cut PT to $438 from $693.
Hindenburg, last Tuesday, announced its short position and the company said it would not be able to file its annual report on time, leading to downturn in the stock price.
J.P. Morgan cut its rating to Neutral from Overweight on the stock, saying uncertainty of 10K delay and follow-up response is expected to drive a near-term overhang for the shares.
Zscaler’s conservative guidance prompts Wall Street to lower rating, cut PT
Zscaler (ZS) was in focus after cybersecurity company offered up weaker-than-expected guidance, prompting BofA to cut its rating to Neutral from Buy and lower PT to $195 from $265.
“We believe that 1H growth weakness might signal deeper long-term growth issues,” BofA analayst Tal Liani wrote.
Meanwhile, UBS analyst Roger Boyd cut PT to $250 from $270 and said he was "trying to make sense" of what he called a "more conservative guide." J.P. Morgan analyst Brian Essex lowered PT to $220 from $230, saying guidance pointed to weaker than expected 1H25 billings.
UBS sees transition years ahead for ASML, downgrades stock
UBS downgraded ASML (ASML) to Neutral from Buy, as the brokerage sees transition years ahead.
The firm, which lowered the price target on the shares to €900 from €1,050, said whilst there remains some short-term upside potential from the 2025 outlook, the analysts think the narrative will begin to shift to 2026/27, where they see downside to EBIT consensus.
The brokerage expects EPS to grow at a 13% compound annual growth rate, or CAGR, in 2025-30 versus 24% in 2018-25 which they believe justifies the "normalization" of multiples relative to peers and history.
Separately, Morgan Stanley replaced AML with Arm Holdings (ARM) for its top pick in the European semiconductor space.
Freeport McMoRan upgraded by UBS on copper outlook; Wolfe upgrades Alcoa on aluminium outlook
UBS upgraded Freeport McMoRan (FCX) to Buy from Neutral and set $55 price target, with analyst Daniel Major saying FCX is the most liquid global copper pure play stock investment with high correlation to copper price upside.
The analyst acknowledges near-term risks from consensus downgrades, but sees current levels as an attractive medium-term entry point.
Similarly, Wolfe upgraded Alcoa (AA) Outperform from Peer Perform with a $36 price target, citing weakness in the stock during the past month even as aluminum prices have increased ~6%. The upgrade also is partly attributed to Alcoa's increased stake in Alumina.
Nordstrom upgraded by Barclays following take-private deal
Barclays raised its rating on Nordstrom (JWN) to Equal weight from Underweight after an investor group led by the Nordstrom family delivered a non-binding offer to acquire the department store chain for about $3.8 billion.
The brokerage, which set a PT equal to the offer price of $23, views the effort to take the company private as “the right thing for the business long term.”
Other than the companies mentioned above, there were some other analyst actions during the week, including Jefferies downgrading Booking Holding (BKNG) to Hold from Buy, as analysts John Colantuoni and Brent Thill raise doubts whether the company, as well as other names in the space, including Airbnb (ABNB) and Expedia (EXPE), can sustain a level of room night growth to support guidance forecasts and maintain free cash flow.
BofA initiated coverage of Live Nation Entertainment (LYV) with a Buy rating and said several key drivers, like a shift in consumer spending toward experiences, positive supply and demand trends as more artists and events are discovered through social media, the unique value of live events, among other things, should fuel long-term growth for the company.
J.P. Morgan upgraded NIO (NIO) to Overweight from Neutral, saying that it likes the higher visibility with new model initiatives and the pipeline into 2025.
Nasdaq (NDAQ) got a rare double-upgrade from BofA to Buy from Underperform on its wide moat and high-growth software and information service businesses. The brokerage said the company’s trading business is also poised to benefit as BofA forecasts a rebound in IPO listings after the U.S. presidential election.