Barclays Downgrades Airbnb and Expedia
Barclays has downgraded Airbnb and Expedia due to a cautious travel outlook. The bank anticipates that the “pent-up travel demand” will eventually be exhausted, leading to a softer demand environment and decreased leisure spending budgets. Analyst Trevor Young downgraded Airbnb to underweight from equal weight, citing indications of slowing demand and increasing pressure from hotel peers. His price target for the stock suggests a 30% downside. Young also downgraded Expedia to equal weight from overweight, with a price target indicating just over 1% potential gain. Both stocks have seen significant gains this year.
JPMorgan Upgrades Rio Tinto
JPMorgan analyst Patrick Jones upgraded global mining group Rio Tinto to overweight from neutral. The upgrade is based on the firm’s positive medium-term outlook for commodities and fixed income, particularly in iron ore. Jones expects the market for iron ore to remain relatively balanced. He also noted Rio Tinto’s strong balance sheet and expectations for a more balanced deployment of capital between cash returns and organic growth in the medium-term.
Goldman Sachs’ Top Picks
Goldman Sachs named Target as its “best long idea” for fiscal year 2024. The investment bank also upgraded Dollar Tree and Best Buy to buy. Analyst Kate McShane cited several catalysts for optimism, including a constructive outlook on consumer health, a potential sales inflection point in 2024 for retailers, and a favorable sales backdrop with improved supply chains and advancements in technology.
JMP Upgrades Zillow Group
Analyst Nicholas Jones upgraded Zillow Group to market outperform from market perform, calling it a compelling opportunity. He assigned a price target implying a nearly 37% gain from the previous close. Jones believes that consensus estimates for Zillow are too low for 2025 and 2026, given the pent-up residential real estate demand and expectations of lower rates in the second half of next year. He expects the stock price to benefit from multiple expansion as Zillow scales its newer solutions.
Morgan Stanley Upgrades HP Inc.
Morgan Stanley upgraded HP Inc. to overweight from equal weight and raised its price target on the stock. Analyst Erik Woodring cited an improving tech hardware market, particularly for PCs, as the reason for the upgrade. Woodring believes that HP Inc. is an underappreciated play on the PC market recovery and expects it to benefit from capital returns and operational efficiency. The stock has underperformed this year due to weaker demand, concerns about the print business, and Berkshire Hathaway selling down its ownership stake.
Hot Take: Analyst Calls and Upgrades
Analysts have made several calls and upgrades in various sectors. Barclays downgraded Airbnb and Expedia due to a cautious travel outlook, while JPMorgan upgraded Rio Tinto based on positive commodity outlook. Goldman Sachs named Target as its top pick for fiscal year 2024, and JMP upgraded Zillow Group, citing low consensus estimates. Morgan Stanley upgraded HP Inc., expecting it to benefit from the recovery in the PC market. These analyst moves reflect their assessments of market trends and potential future performance.
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