Analyst Review – 01/22/24

Upgrades

$AAL – American Airlines Group Inc.
Recent News
Wolfe Research upgraded American Airlines from Peer Perform to Outperform, setting a target price of $17 per share. The firm’s analysts recommend increasing investments in airlines due to a slowdown in domestic capacity growth. Despite underperforming compared to the S&P 500 for four years and facing challenges last year, they anticipate a potential positive revenue per available seat mile (RASM) trend later this year. 2024 is seen as a transitional year for airlines, with earnings per share (EPS) expected to reach a low point. American Airlines stands out for meeting its 2023 capacity and cost per available seat mile excluding fuel (CASMx) targets, having no Boeing MAX-9 issues, and facing lesser risks in certain international routes.
Brokerage Firm: Wolfe Research
Rating Change: Peer Perform >> Outperform
Price Target: $17

Downgrades

$AMD – Advanced Micro Devices, Inc
Recent News
Northland Capital Markets has downgraded Advanced Micro Devices from Outperform to Market Perform. This decision comes after observing the growth in the AI chip market in 2023, influenced by the rising popularity of applications like ChatGPT, price hikes, double ordering, and stockpiling by Chinese companies. Looking towards 2027, the analysts predict the AI chip market to reach a revenue of $125 billion, with AMD potentially earning $16 billion and securing a 13% market share. Despite these prospects, the firm believes that AMD’s current stock prices are already factoring in these optimistic revenue projections for 2027.

Brokerage Firm: Northland Capital
Rating Change: Outperform >> Market Perform
Price Target: N/A

$LOW – Lowe’s Companies Inc.
Recent News
Oppenheimer has downgraded both Home Depot and Lowe’s from Outperform to Perform, signaling a cautious stance on the short-term prospects of the home improvement retail sector. Despite holding a favorable view on the sector’s long-term potential, the analysts are concerned about possible market complacency towards these companies. They warn that the current stock prices of Home Depot and Lowe’s might not fully account for the ongoing challenges they could face, particularly in the early part of fiscal 2024. The firm anticipates that the initial 2024 guidance from both companies might negatively impact their stock performance. However, they suggest that later in 2024, as sector trends potentially strengthen, more favorable opportunities for investment in these stocks may arise. Consequently, Oppenheimer has adjusted its price targets for Home Depot and Lowe’s to $345 and $230, down from $360 and $275, respectively.

Brokerage Firm: Oppenheimer
Rating Change: Outperform >> Perform
Price Target: $230 >> $345

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