7 analyst picks of the day: Spotify called a buy, Foot Locker surges | Pro Recap

By Davit Kirakosyan

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

Spotify upped to Buy

Guggenheim today upgraded Spotify (NYSE:SPOT) to Buy from Neutral, with a price target of $155 vs. the prior $120.

The firm said the decision hinges on its estimates of the company's subscription plan price increases and its cost management outlook.

It wrote in its note: "We believe Spotify is positioned to more aggressively manage cost than is currently reflected in the consensus model, as expense growth in these categories exceeded music revenue growth in 2018-22. We believe that fundamentally the music business gained scale and we see Spotify leadership continuing to recognize incremental efficiency as a value-creating strength that the company can disproportionally benefit from, relative to the broader market."

After InvestingPro's real-time alert went out to subscribers, shares popped nearly 3% on the open before retreating to a marginal uptick. Shares were lately changing hands at $129.27.

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Foot Locker shares jump 7% on two upgrades after Q4 earnings

Foot Locker (NYSE:FL) shares gained more than 7% after Evercore ISI and Citi upgraded the company.

Evercore ISI upgraded the stock to Outperform from In Line and raised its price target to $60.00 from $32.00, citing three key reasons behind the upgrade: (1) a positive new strategy, (2) propriety analysis shows the company remains highly relevant for street/lifestyle drops, and (3) inventory/promotionality risk associated with Foot Locker has been misunderstood in the nearer-term.

Citi upgraded the stock to Buy from Neutral and raised its price target to $50.00 from $47.00, noting that the company’s flagship banner is very healthy and its relationship with Nike (NYSE:NKE) seems in much better shape than previously expected. “New CEO Mary Dillon is doing the right things by shifting stores off-mall (while closing many mall stores and shutting weaker businesses) and focusing on loyalty/digital,” added the firm.

Shares fell more than 5% on Monday after the company reported its Q4 results. While both Q4 EPS of $0.97 and revenue of $2.33 billion came in better than expected, the fiscal 2023 outlook was disappointing, with EPS expected in the range of $3.35-$3.65 (vs the consensus of $4.15) and comparable sales falling 3.5%-5.5%, worse than the expected 3.1% decline.

New York Community Bancorp upgraded to Buy after it buys $38B Signature Bank assets

DA Davidson upgraded New York Community Bancorp (NYSE:NYCB) to Buy from Hold.

Shares closed more than 6% higher yesterday followed by a 30% jump on Monday due to the Federal Deposit Insurance announcing its Flagstar Bank unit acquired most of Signature Bank deposits and some loans, excluding $4B of digital deposits. Signature Bank was taken over by regulators a week ago.

Chart Industries resumed at Outperform, well-positioned to benefit from macro tailwinds

Evercore ISI resumed coverage on Chart Industries (NYSE:GTLS) with an Outperform rating and a price target of $217.00, noting that the company is well-positioned to benefit from macro tailwinds, rapidly expanding margins, and global clean energy initiatives.

Despite inflation and supply chain challenges, Evercore ISI noted that the company's positive momentum remains strong due to two main reasons: improving market fundamentals driven by energy security, which continue to build positive momentum for global LNG demand, and the global CO2 shortages driving demand for Earthly Labs' offerings. Although material costs are high, the firm believes strong demand for LNG and hydrogen is expected to offset these costs in 2023.

Shares rose 10% yesterday.

3 more upgrades

Morgan Stanley upgraded Harley-Davidson (NYSE:HOG) to Overweight from Equalweight with a price target of $50.00 given confidence in the Hardwire strategy, 'containment' of electrification risks and attractive valuation.

The firm increased its EBIT margin assumption to 13.3% from 13.0% for fiscal 2026 and beyond.

Shares gained nearly 4% yesterday.

Piper Sandler upgraded Wix.com (NASDAQ:WIX) to Overweight from Neutral and raised its price target to $120.00 from $99.00.

"Post-4Q22, we believe we are entering a new era where 1) growth headwinds for post-COVID subscription cohorts are coming to a close, 2) price increases are fueling growth without sizable offsetting churn, 3) the profitability delta between the top & bottom players in the space is set to compress to a narrower range than ever before," said the firm.

Share surged more than 6% yesterday.

B.Riley upgraded Semtech (NASDAQ:SMTC) to Buy from Neutral and raised its price target to $52.00 from $34.00.