Nvidia downgraded, Tesla upgraded: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly.

Top Calls:

• New Street downgraded Nvidia (NVDA) to Neutral from Buy with a one-year price target of $135. The firm says the shares are “getting fully valued for the base case.” Share upside will only materialize in a bull case, in which the outlook beyond 2025 increases materially, and New Street does not have the conviction on this scenario playing out yet, the analyst tells investors in a research note. The firm says the “quality of the franchise is nevertheless intact,” and it would be buyers again of Nvidia, “but only on prolonged weakness.” Among the artificial intelligence stocks, New Street views AMD (AMD) and TSMC (TSM) as the most attractive, the firm noted.

• China Renaissance upgraded Tesla (TSLA) to Buy from Hold with a price target of $282.13, up from $151.31. The analyst increased estimates to reflect the “substantial expansion” of Tesla’s energy storage business in Q2. The firm sees “re-rating opportunities” for the shares from an improving electric vehicle business and new products from Full-Self Driving, Robotaxi, and the company’s robot segments.

• Raymond James downgraded Spirit Airlines (SAVE) to Underperform, a sell-equivalent rating, from Market Perform without a price target. The downgrade reflects a slightly lower fuel outlook and weaker fare trends, the analyst tells investors in a research note. The firm says the budget airline setup into Q3 is “clear as mud” given the “rapid market and product modifications and potential headwinds. The risks are greatest at Frontier and Spirit despite the “already weak share price and investor sentiment,” adds Raymond James. The firm does not believe a bankruptcy filing is a foregone conclusion for Spirit, and says the GTF engine compensation has been good. However, it does not fully offset the earnings impacts from aircraft on ground, which is a materially greater issue for Spirit than any other U.S. airline and expected to get worse in 2025, the firm adds.

• Raymond James downgraded Frontier Group (ULCC) to Underperform from Market Perform without a price target. The downgrade reflects a slightly lower fuel outlook and weaker fare trends, the analyst tells investors in a research note. The firm says the budget airline setup into Q3 is “clear as mud” given the “rapid market and product modifications” and potential headwinds. The risks are greatest at Frontier and Spirit despite the “already weak share price and investor sentiment,” adds Raymond James. The firm says that despite network changes to improve operations, Frontier’s completion factor lags that of most U.S. peers both on an absolute and year-over-year basis. Raymond views the airline’s adjustments to August schedules as a “Band-Aid” to its longer-term concerns around Frontier’s planned growth with 240-seat A321s.

• Exane BNP Paribas upgraded Lloyds Banking (LYG) to Outperform from Neutral with a 72 GBp price target. The analyst replaced NatWest Group (NWG) with Lloyds as the firm’s top pick in UK banks. Confirmation of a Labour party majority add visibility for equity investors, the analyst tells investors in a research note. The firm believes the banks will largely stay out of the political headlines in the coming weeks, which is welcome. The focus can now shift back to improving operating trends, according to Exane.