McDonald’s downgraded on GLP-1 drug worries: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly. 

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Top 5 Upgrades: 

• Lake Street upgraded Limoneira (LMNR) to Buy from Hold with an unchanged price target of $23. Q2 results came in “modestly below” the firm’s estimates behind an especially weak lemon market, but the highlight was a major agreement to merge a portion of Limoneira’s operations into Sunkist, which will “meaningfully” reduce Limoneira’s fixed costs and operating expenses while improving the revenue mix to higher margin businesses, the firm tells investors.
• Janney Montgomery Scott upgraded Eagle Bancorp (EGBN) to Buy from Neutral with a $24 fair value estimate. Investors have “ignored” Eagle shares in recent months as the stock has drifted from $24 to sub-$17 recently, notes the firm, which encourages investors to “do more homework on the EGBN story” with the stock still trading at a less than the 66% average price-to-tangible book value ratio since December 2022.
• BofA upgraded ArcBest (ARCB) to Neutral from Underperform with a price target of $74, up from $63. The firm sees momentum in the company’s share gains with core customers mitigating core yield pressure.
• Raymond James upgraded Atlantic Union Bankshares (AUB) to Strong Buy from Outperform with a price target of $41, up from $37. The firm sees an attractive valuation for a “desirable franchise that is likely to show a significant improvement in financial performance over the next twelve months.”
• Mizuho upgraded Macerich (MAC) to Outperform from Neutral with a price target of $18, down from $22. The firm believes the stock offers an attractive risk/reward profile and that its underperformance year-to-date “offers an intriguing entry point for risk-tolerant investors to gain exposure to a highly productive mall portfolio with substantial long-term earnings upside.”

Top 5 Downgrades:

• Redburn Atlantic double downgraded McDonald’s (MCD) to Sell from Buy with a price target of $260, down from $319. The firm sees the GLP-1 weight-loss drugs suppressing consumer appetites and presenting an underappreciated longer-term threat for McDonald’s.
• JPMorgan downgraded Informa TechTarget (TTGT) to Underweight from Neutral with a price target of $8, down from $18. After more than two months of delay, the company released its fiscal 2024 results, which were worse than expected, the firm tells investors in a research note.
• BofA downgraded Keros Therapeutics (KROS) to Neutral from Buy with a price target of $18, down from $32. The company announced the conclusion of its strategic review, with the board opting to move forward with KER-065 for Duchenne muscular dystrophy and to return $375M in excess capital to shareholders, the firm tells investors in a research note.
• Redburn Atlantic downgraded Manhattan Associates (MANH) to Neutral from Buy with a price target of $200, down from $270. The firm says the company remains highly exposed to discretionary professional services, and three factors will sustain pressure on the services, namely Manhattan’s cloud product that should require less support than on-premise, system integrators that are more familiar with the company’s products and offer cheaper rates, and the customer base that will continue to be prudent on discretionary spend given macro uncertainty.
• Jefferies downgraded Arch Capital (ACGL) to Hold from Buy with a price target of $100, down from $106. The firm anticipates mid-year softening of catastrophe pricing to temper Arch’s growth and compress returns.

Top 5 Initiations: 

• KeyBanc initiated coverage of Dynatrace (DT) with an Overweight rating and $69 price target. The firm is positive on Dynatrace’s leadership in application performance monitoring and in the enterprise segment.
• KeyBanc initiated coverage of Elastic (ESTC) with a Sector Weight rating and no price target. The firm says that while the company’s platform supports several use cases, it is not as differentiated in observability and SIEM.
• Goldman Sachs reinstated coverage of Kontoor Brands (KTB) with a Buy rating and $85 price target, implying 25% upside. The company recently completed the acquisition of the Helly Hansen brand, which diversifies and strengthens Kontoor’s portfolio expansion into global markets and new categories, and provides meaningful accretion opportunity over time, the firm tells investors in a research note.
• BofA initiated coverage of Amentum (AMTM) with a Neutral rating and $24 price target. Amentum is a top 10 provider of advanced engineering, technology solutions, and facility operations to U.S. and international governments which boasts a $45B-plus backlog supported by diversified customers, contracts and capabilities, but high leverage and a slow award environment limit their growth opportunities, the firm tells investors
• Northland initiated coverage of Savers Value Village (SVV) with an Outperform rating and $15 price target. The for-profit thrift retailer offers secondhand clothing, accessories, and household goods through “a unique circular economy model,” notes the firm, which sees the company having a “rare mix of white space, margin, and mission.”