6 analyst picks weekly: Taiwan Semi upgraded to Positive | Pro Recap

By Davit Kirakosyan

Investing.com -- Here is your Pro Recap of the biggest analyst picks you may have missed since last week.

Taiwan Semi upgraded at Susquehanna following weak March sales report

Susquehanna upgraded Taiwan Semiconductor Manufacturing (NYSE:TSM) to Positive from Neutral today and raised the price target to $126 from $76, noting that the worst case is dialed into the firm's estimates and investor expectations.

As always, InvestingPro subscribers got this news first. Start your free 7-day trial to get on board.

According to Susquehanna, the introduction of new products has led to a moderate increase in revenue in H2/23, after a significant decline in wafer shipments and revenue in H1. Additionally, the utilization rate (UR) is expected to bounce back in Q3/23, following a decline of more than 30 points in H1. This is anticipated to result in a faster recovery of quarterly EPS compared to revenues, with the trend expected to gain momentum into 2024 as new products are introduced at N3/5 nodes.

Last week, the company reported weaker-than-expected sales for March. Revenue of NT$145.41 billion (US$4.77B) was down 15.4% year-over-year and down 10.9% month-over-month. Overall, Q1 sales came in at NT$508.63B, rising 3.6% year-over-year, but missing the consensus estimate of NT$525.5B.

Costco initiated with Outperform at William Blair

William Blair initiated coverage on Costco Wholesale (NASDAQ:COST) with an Outperform rating, noting the company is well-positioned in an uncertain environment.

The firm believes that Costco's strong value proposition, engaged membership, efficient operations, and growth potential will drive further market share expansion. According to William Blair's pricing analysis, the average product savings deliver an 11-fold return on the annual membership fee, and the firm's proprietary survey ranks Costco as the best among its peers in terms of product price, quality, brand trust, and experience.

Additionally, the analyst cited member loyalty, Costco's low-touchpoint operating model, and long-term potential for top-line growth and margin expansion as other reasons for their bullish outlook on the stock.

HP upgraded at JPMorgan, shares gain 3%

JPMorgan upgraded HP (NYSE:HPQ) to Overweight from Neutral and raised its price target to $35.00 from $30.00, highlighting a strong Personal Systems (PS) recovery. Shares closed more than 3% higher today.

According to the firm, the latest data points indicate downstream PC shipments in Q1 progressed in line with seasonality despite a challenging Q4/22. Furthermore, upstream data points from component suppliers and ODMs point to the likelihood of above seasonal trends in the coming quarters.

3 more upgrades

World Wrestling Entertainment (NYSE:WWE) was upgraded to Overweight from Equalweight at Morgan Stanley with a new price target of $120.00 (from $105.00).

According to the analysts, the pending deal between UFC's parent company Endeavor Group (NYSE:EDR) and WWE, which will create a new public company TKO worth $21B, creates value by making pure-play sports and entertainment equity.

WWE shares closed more than 5% last week.

Goldman Sachs upgraded VF (NYSE:VFC) to Buy from Sell and raised its price target to $27.00 from $26.00.

While the company's revenue and earnings have lagged behind the market, Goldman Sachs anticipates an upswing as positive catalysts outweigh negative ones. Issues like Vans' weakness and wholesale inventory rebalancing have been addressed, and wholesale inventory rebalancing, a right-sized dividend, and unexpected CEO/management turnover are increasingly in the rearview mirror.

Shares rose more than 5% last week.

JMP Securities upgraded Shopify (NYSE:SHOP) to Market Outperform from Market Perform with a price target of $65.00. The firm said that Shopify continues to take share after analyzing the OpEx structure across the website builders, assessing third-party website traffic data, and speaking to professional website developers across these platforms.

Shares were up nearly 7% last week.