Notable analyst calls this week: Microsoft, Starbucks and GM among top picks

The S&P500 (SP500) finished in the red on Friday, while Dow (DJI) notched a record high after an eventful week that saw soft inflation data and encouraging guidance from Micron Technology.

For the week, the Nasdaq (COMP:IND) gained 1.2%.

Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:

Microsoft downgraded on AI competition concern

Microsoft (MSFT) was downgraded by DA Davidson to Neutral from Buy, citing the belief that the competition has caught up to it regarding its artificial intelligence prowess.

"We believe that Microsoft’s lead is now diminished in both the cloud business and code generation business, which will make it hard for MSFT to continue to outperform," said analyst Gil Luria and kept PT of $475 on the stock.

Luria added that AWS is "adding nearly as much cloud business" as Azure after a period of a few quarters, while Google Cloud has also seen accelerating growth in recent quarters.

Starbucks gets rare downgrade by Jefferies; Bernstein bullish on stock

Starbucks (SBUX) was downgraded by Jefferies to Underperform from Hold, with analyst Andy Barish thinking that while new CEO Brian Niccol will make necessary strategic changes to move the coffee chain in the right direction, the execution will be challenged as issues like operations, culture, value perception, and tech take time to fix.

Jefferies has a base case PT of $76 on SBUX and an upside scenario PT of $110.

Meanwhile, Bernstein upgraded the stock to Outperform from Market Perform, as the firm sees Niccol as the perfect CEO to guide a comeback for the brand.

Leerink downgrades Regeneron after Amgen’s court win

Regeneron (REGN) was in focus as Leerink Partners downgraded it to Market Perform from Outperform, after a judge denied the company’s motion for a preliminary injunction against Amgen (AMGN) biosimilar for its blockbuster therapy Eylea.

Leerink analyst David Risinger said that the court ruling “creates uncertainty about prospects for the US Eylea franchise.” The analyst also lowered his PT to $1,077 from $1,175.

Meanwhile, Truist reaffirmed its Buy rating and $1,200 target on the stock, arguing that the stock move was an overreaction to the ruling.

GM downgraded by Bernstein on earnings headwinds; MS downgrades U.S. auto sector

Bernstein lowered its rating on General Motors (GM) to Market Perform from Outperform, citing earnings headwinds.

Analyst Daniel Roeska warned that continued inventory build in the U.S. will lead to pricing headwinds next year, a delayed ramp on electric vehicles, and push Cruise losses into next year. Headwinds in GM's international businesses were also noted to be increasing.

Separately, Morgan Stanley downgraded the entire U.S. auto industry view to an In-Line rating after having the broad sector set at Attractive, saying that U.S. inventories are on an upward slope, with vehicle affordability still unreachable for many households.

MS downgraded Ford Motor (F) to Equal Weight from Overweight, General Motors (GM) to Underweight from Equal Weight, Rivian Automotive (RIVN) to Equal Weight from Overweight, while it kept its Overweight ratings on Tesla (TSLA), Ferrari (RACE), CarMax (KMX), and AutoNation (AN).

Piper Sandler bullish on Salesforce over positive risk-reward opportunity

Piper Sandler upgraded Salesforce (CRM) to Overweight, citing positive risk-reward and its opportunity in artificial intelligence.

Analyst Brent Bracelin also upped his PT to $325 from $268, saying that the company’s new pricing and packaging could boost multi-cloud adoption, while the promise of Agentforce could stabilize demand. Bracelin added that Salesforce also has the additional opportunity to boost margins and buybacks.

Other than the companies mentioned above, there were other analysts’ actions including Oppenheimer downgrading Lowe's Companies (LOW) to Outperform from Market Perform, saying that lower interest rates following the FOMC action last week could help boost the home improvement retailer.

HP (HPQ) was downgraded by BofA to Neutral from Buy amid worries that margins for its printer division will offset any upside in the PC space.

KeyBanc downgraded Bumble (BMBL) to sector weight from overweight, arguing that app store data points remain weak and risks to 2025 financials are high.

Jefferies analysts Rob Dickerson and Scott Marks downgraded Hershey (HSY) to Underperform and cut the price target by 11% to $163, saying that the price disparity between salty snacks and chocolate is resulting in a shift in consumer spending.