Calls of the day: 9th July 2024

The latest calls from Wall Street analysts.

[.custom-color]Domino's Pizza[.custom-color] was upgraded to Outperform from Neutral by Baird. It was given a price target of $580, representing a 16% upside on the current share price. Analyst David Tarantino was excited about Domino's "Hungry For MORE" strategy, an acronym that stands for (M) Most delicious food, (O) Operational excellence, (R) Renowned value, and (E) Enhanced franchisee experience. "Specifically, we are optimistic the company's Hungry for MORE strategy can fuel a multi-year stretch of standout top-line performance."

On top of this strategy, Tarantino thinks Domino's has a solid advertising approach, a strong product pipeline, strong operations, rising penetration, and a good value proposition. All of this has convinced him that Domino's is:

"the type of business we think is attractive to own amid ongoing uncertainties about the health of consumer spending."

[.custom-color]Gilead[.custom-color], a biopharmaceutical company headquartered in California, was upgraded to Outperform by Raymond James. The price target given was $93, which is a 40% increase from the current price. Their proprietary drug Lenacapavir is being seen as a potential game-changer in HIV treatment due to its long-acting formulation. Raymond James highlighted the recent outstanding results of a test named PURPOSE-1 for HIV pre-exposure prophylaxis (i.e., taking the drug before you are exposed to HIV as a preventative measure). There is also anticipated approval of Gilead's drug Seladelpar which can be used to treat primary biliary cholangitis (PBC).

[.custom-color-downgrade]Bumble[.custom-color-downgrade] was downgraded by Wells Fargo to Equal Weight from Overweight with a price target of just $10. The company thinks the recent bump from redesigning its app will only be temporary:

"In our view, another estimate reset is likely needed, and investors will have to recalibrate reacceleration timing expectations to 2025. Tinder is still struggling with top-of-funnel challenges, ~18 months after initially highlighting challenges vs. ~3 months for BMBL. As such, we believe attractive valuation no longer merits OW rating."

[.custom-color-downgrade]ServiceNow[.custom-color-downgrade] was downgraded to Sell by Guggenheim. Analyst John DiFucci gave the firm a $640 price target (it currently sits at $766). He writes:

"[ServiceNow] seems to be expecting an uptick in GenAI business in the second half of 2024, but our fieldwork indicates this is not likely until 2025, if ever."

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