Analysts see buying opportunities in stocks like Johnson & Johnson and Snap as earnings season continues

Published Wed, Apr 22 20209:56 AM EDTUpdated Wed, Apr 22 202010:06 AM EDT

Key Points

Wells Fargo upgraded Netflix to equal weight from underweight.
Bank of America downgraded Tesla to underperform from neutral.
Bank of America upgraded Johnson & Johnson to buy from neutral.
Guggenheim downgraded Visa to neutral from buy.
Bank of America downgraded Zynga to underperform from neutral.
Stifel downgraded Netflix to hold from buy.
Oppenheimer upgraded Snap to outperform from perform.

(This story is for CNBC PRO subscribers only.) Wall Street analysts upgraded a bunch of stocks on Wednesday as earnings season continues. Wednesday's calls of the day include Snap, Johnson & Johnson, Netflix and more. Here are the biggest calls on Wall Street on Wednesday: Wells Fargo upgraded Netflix to 'equal weight' from 'underweight' Wells said the streaming giant had outstanding execution after the company reported record subscriber additions in its earnings report on Tuesday after the bell. "Q1 net adds surged to ~16mm vs buyside expectations for 10-11mm. Q2's outlook for 7.5mm notes variability due to coronavirus confinement, and we'd guess management is erring on the conservative side. Guidance implies H1 net adds of 23mm vs ~28mm for all of 2019. Management notes that some of this could be simply pull-forward from the longer organic profile. Regardless, it demonstrates the unique value of Netflix in these even more unique times. As long as hand sanitizer is sold out, NFLX should outperform, and execution is outstanding. Upgrade to Equal Weight from Underweight." Read more here . Bank of America downgraded Tesla to 'underperform' from 'neutral' Bank of America downgraded Tesla mainly on valuation. "While we were initially ahead of the Street, it appears consensus has recently become more realistic. As the macro backdrop has deteriorated so rapidly/ severely with the COVID-19 pandemic, quarantines and business shutdowns implemented, along with what we expect to be a tepid U-shaped recovery as economies are reopened, we are once again cutting our global volume forecasts, and lowering estimates/POs across our coverage to reflect lower volumes, as well as revolver draws and capital raises by companies. Nevertheless, we continue to believe that stocks are more than pricing in an earnings implosion in 2020E, but will start to price in recovery in 2021-22E, as companies prove themselves and survive the downturn/trough." Read more about this call here . Bank of America upgraded Johnson & Johnson to 'buy' from 'neutral' Bank of America said the stock was defensive and should continue to outperform. "We are upgrading Johnson & Johnson to Buy from Neutral and raising our PO to $175 from $150. We are upgrading JNJ due to our belief that in the current unprecedented environment the most defensive names will continue to outperform. JNJ has a long history of outperforming during difficult times, and JNJ's strong Q1 results and dividend raise suggest JNJ should deliver solid results through these challenging times as well. We also think risks around pharma pricing are now lower due to Covid-19, and we view JNJ's decision to distribute their Covid-19 vaccine (should it prove successful) on a non-for-profit basis as a master stroke." Guggenheim downgraded Visa to 'neutral' from 'buy' Guggenheim said in its downgrade of the stock that it thinks the domestic market is going to continue to be challenging. "Downgrading V to Neutral from Buy for largely the same reasons as motivated our downgrade of MA last week. We believe the worst will soon be behind us - but, net-net, we see COVID-19 as a paradigm-changing event for payments companies, and we're generally less positive about the sector's outlook than in past years (due to higher unemployment, changing consumer behaviors, business defaults, etc)." Bank of America downgraded Zynga to 'underperform' from 'neutral' Bank of America said it sees less relative upside in the social game developer compared to peers in the firm's coverage area. "Given greater relative upside elsewhere in our coverage, our ZNGA rating moves to Underperform from Neutral. Our thesis is based on the following: 1) potential for a sharp deceleration in mobile advertising bookings; 2) tougher Y/Y growth comps ahead w/o more M & A; 3) greater multiple compression risk vs. peers; and 4) potential to lag the broader market in macro recovery. Risks to our downgrade are 1) sustained strong engagement trends; 2) new game launches in 2H20 re-accelerate bookings growth; and 3) greater margin expansion due to lower user acquisition costs." Stifel downgraded Netflix to 'hold' from 'buy' Stifel said in its downgrade of the stock that it sees a more balanced risk/reward. " Netflix added an impressive 15.8mm paid subscribers in 1Q and the current environment remains positive for near-term subscriber growth. While the timing of a potential return to normalcy remains unknown, we expect some form of trend reversal to materialize as lockdowns are lifted and a portion of recent demand proves to have been pulled forward. At current valuation levels, we see a more balanced risk/reward profile in NFLX shares with limited visibility to 2H numbers as lockdown-related demand may diminish and churn potentially accelerates. We continue to support the long-term story and would revisit our view in the high $300s." Read more about this here . Oppenheimer upgraded Snap to 'outperform' from 'perform' Oppenheimer upgraded the stock after the company's strong earnings report and said it is "executing on all metrics." "We're establishing a 12-18 month price target of $18 and upgrading SNAP shares from Perform to Outperform, as the company is executing on all metrics. While we previously expected 2Q revenue growth to remain nicely positive (+12% estimate vs. +15% through April 19), pre-COVID-19 revenue +58% y/y in Jan/Feb suggests SNAP has overcome its monetization issues. Moreover, SNAP 's revenue/hour gap vs. peers remains 55%, suggesting a multi-year tailwind if user metrics remain stable."