Here are Tuesday’s biggest analyst calls: Apple, Netflix, Affirm, Micron, Ollie’s, Gap & more

Here are Tuesday’s biggest calls on Wall Street: Morgan Stanley reiterates Apple as overweight Morgan Stanley said Apple shares are “underappreciated” and under-owned by institutional investors. ” Apple is our Top IT Hardware Pick in 2022, as we believe investors underappreciate the defensibility of Apple’s product portfolio (namely the iPhone) and sustainability/durability of Services growth.” Morgan Stanley reiterates Netflix as equal weight Morgan Stanley said it’s bullish on Netflix’s launch of an ad supported tier for subscribers. “We see the launch of an ad supported tier as beneficial to long-term revenue growth, enabling ARPU growth without depending wholly on consumer price increases. As details emerge, we consider the unit economics and what is and is not priced into shares.” JPMorgan upgrades Arco to overweight from neutral JPMorgan said it sees an attractive entry point for the Brazilian education company. “We upgrade Arco to Overweight, from Neutral, with a $20 Dec-23 PT, as we see (1) the company well positioned to ride the uncertain macroeconomic scenario, given strong inflation pass-through capabilities of the private K12 market; and (2) the weakness in shares being an attractive entry point, given significant underperformance versus the broader education sector.” Read more about this call here. RBC initiates Northrop Grumman as outperform RBC said in its initiation of Northrop Grumman that it’s a top large cap defense stock. “Best exposure to growth in space markets (~20% of company sales), well positioned within nuclear triad as China support elevated funding, core large cap defense stock.” Read more about this call here. Citi opens a negative catalyst watch on Ollie’s Citi opened a negative catalyst watch on the discount retailer and noting that earnings expectations are too high. “We are cautious on OLLI going into 2Q EPS this week and are issuing a negative catalyst watch for several reasons: (1) Expectations have become more elevated since 1Q earnings, (2) Off-pricers are still not benefitting from a trade down customer.” JPMorgan initiates Bowlero as overweight JPMorgan said in its initiation of the bowling center company that the bowling industry is “economically-attractive.” “We are initiating coverage of Bowlero with an Overweight rating and $17 December 2023 price target (~11x our CY23E EBITDA) based on: (1) market leadership and scale in the economically-attractive bowling industry, (2) a balanced multiyear financial profile (~10% revenue and EBITDA growth base case) with potential P/L upside.” Read more about this call here . HSBC upgrades Pinduoduo to buy from hold HSBC said it’s turning more constructive on shares of the agriculture technology company. “After another strong beat in 2Q22, we turn constructive on PDD . 1) Its focus on agricultural products has helped to drive and sustain strong user engagement, especially during the COVID-19 disruptions; 2) value for money proposition has helped to boost resilience in top-line growth amid macro uncertainty.” B. Riley upgrades American Outdoor Brands to buy from neutral RIley said in its upgrade of the outdoor sports and recreation company that it sees a “less bad” quarter when American Outdoor reports earnings next week. “This upgrade to Buy is not necessarily a view on the quarter (with our 1Q23 estimates below consensus estimates), but we could also have a ‘less bad than expected’ situation brewing–especially an expectation that “healthy” retail inventory levels will drive normalized re-stocking patterns into the holiday season.” Read more about this call here . Bank of America reiterates Affirm as buy Bank of America called the fintech company a long-term share-taker. “AFRM is a share-taker and long-term beneficiary in the high growth buy-now-pay-later (BNPL) sector, It is navigating the macro backdrop well and the longer-term risk/reward is attractive.” Barclays upgrades Gap to equal weight from underweight Barclays said in its upgrade of Gap that the risks are now built in to the stock. “On the back of GPS ‘s 2Q22 earnings, we upgrade shares to Equal Weight from Underweight. We believe the major risk factors to the story are now well known and there is neutral-to-positive headline risk, at least through year-end as Gap takes measures to turn the business.” Citi reiterates Analog Devices and Micron as buy Citi said stocks like Analog Devices and Micron were its favorite ways to play the semiconductor downturn. “We reiterate our belief that every company/end market will correct. We continue to believe we are entering the worst semiconductor downturn in at least a decade, and possibly since 2001 given the recession and inventory build. We expect every company in our coverage universe and every end market to experience a correction.”

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