Check out today's top analyst calls from around Wall Street, compiled by The Fly.
MOVING TO THE SIDELINES: KeyBanc analyst Edward Yruma downgraded Stitch Fix (SFIX) to Sector Weight from Overweight without a price target. The analyst sees limited visibility following the company's fiscal first quarter results. Freestyle remains the key total addressable market "unlock" for the business, but it will take time and effort to ramp, Yruma told investors in a research note. He views Stitch Fix's 15,000 quarter-over-quarter net additions as disappointing saying they will likely to act as a headwind.
Evercore ISI analyst Mark Mahaney also downgraded Stitch Fix to In Line from Outperform with a price target of $24, down from $68, following the company's fiscal first quarter results. The 15,000 new additions marked the weakest customer growth quarter outside of the April 2020 COVID quarter, and the company's second quarter guidance implies a material quarter-over-quarter decline in active customers, Mahaney told investors in a research note. The analyst believes the core Fix offering has likely "matured out its U.S. market" and that the Freestyle offering has taken longer than expected to kick in.
APPROPRIATE VALUATION: KeyBanc analyst Tyler Parker initiated coverage of Roblox (RBLX) with a Sector Weight rating and no price target. The analyst believes Roblox has a "potent platform particularly strong in attracting a younger demographic." However, aging up the platform remains a key opportunity, but may prove challenging, Parker told investors in a research note. The analyst views Roblox as a "strong growth story at an appropriate valuation."
BUY VIZIO: Craig-Hallum analyst Jason Kreyer initiated coverage of Vizio (VZIO) with a Buy rating and $28 price target. The analyst believes Vizio installed base is a "Trojan horse" driving rapid adoption of ad solutions in SmartCast. Kreyer also thinks valuation metrics reflect conservatism given Vizio's position as the #3 TV manufacturer, #1 sound bar manufacturer, and its industry-leading growth in Platform+.
LACK OF PRICING POWER: Guggenheim analyst Laurent Grandet downgraded Kraft Heinz (KHC) to Neutral from Buy with a price target of $33, down from $46, stating that he was "too optimistic" when he upgraded shares a year ago after the company revealed its new strategic plan and its divestment from commoditized Planters and the Kraft Cheese businesses. Amid inflationary pressures, the portfolio's "lack of pricing power is getting more apparent as weeks pass," said Grandet, who sees this as having consequences not only on near-term top- and bottom-line growth, but also longer-term in altering the implementation of the strategic plan revealed a year ago. In the context of continued severe cost inflation, management will have no other options than to lower EBITDA expansion, the analyst said.
EV ADOPTION TREND: Tiger Securities analyst Bo Pei initiated coverage of Nio (NIO) with a Buy rating and $45 price target. The company is well positioned to "ride the global smart" electric vehicle adoption trend in the coming decade and "become a major player in the field," Pei told investors in a research note. The analyst believes Nio has "successfully established a first-class brand image with superior performance, elegant design, leading services, and a unique user community."
The analyst also started coverage of XPeng (XPEV) with a Hold rating and $50 price target, saying current traffic laws do not allow XPeng models to fully unlock its autonomous driving power and that other players "might have enough time to catch up."
Additionally, he initiated coverage of Li Auto (LI) with a Buy rating and $40 price target as the analyst believes extended-range electric vehicles offer an attractive value proposition to buyers, which should help Li "obtain a reasonable market share."
