[ad_1]
(This is CNBC Pro’s live coverage of Thursday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest post.) Thursday started with a rare sell-equivalent rating placed on Tesla. HSBC initiated coverage of the electric vehicle maker with a reduce rating and a price target that implies more than 30% downside from Wednesday’s close. Meanwhile, Evercore ISI placed tactical outperform ratings on Five Below and Target. Analysts also reacted to Disney’s fiscal fourth-quarter results. Goldman Sachs sees more than 40% upside for the media giant. Check out the latest calls and chatter below. 9:28 a.m. ET: Morgan Stanley slashes price target for Lucid: ‘Lower the burn’ Lucid Motors needs to slash costs to slow its cash burn before it is safe for investors to wade into the electric vehicle maker’s stock, according to Morgan Stanley. The bank slashed its price target for Lucid to $4 from $5 as the company is expected to burn through $2.8 billion this year. Lucid’s cash burn rate is expected to improve to $1.7 billion next year, but the electric vehicle maker is still a risky investment, according to the bank. “We think investors need to see execution on costs before wading in,” analyst Adam Jonas wrote. Lucid’s stock closed at $3.95 on Wednesday, down 42% for the year. Lucid slashed its production guidance this week after reporting third-quarter earnings that missed expectations. The company reported a net loss of nearly $631 million. Morgan Stanley lowered its 2024 production forecast for Lucid to 20,000 vehicles, down from 32,500 previously, and slashed delivery estimates to 16,000 from 26,000. — Spencer Kimball 9:12 a.m. ET: JPMorgan, Stephens downgrade Topgolf Callaway Brands after lackluster earnings Analysts downgraded Topgolf Callaway Brands on Thursday after the company slashed its full-year forecast. JPMorgan downgraded the sports equipment manufacturing company to neutral and lowered its price target by $10 to $13, which implies just 4.4% potential upside to the stock. Stephens downgraded the stock to equal weight and also reduced its price target to $13. Shares fell 18.9% in premarket trading. “We see Topgolf same-venue-sales challenged over the next 12-18 months as corporate and consumer demand continues to normalize in a more difficult macro-economic backdrop, while we continue to see a supportive long-term TAM in the golf industry & leading golf club market share at Callaway,” JPMorgan analyst Matthew Boss wrote. Topgolf reported a beat on earnings for the third quarter, but slightly missed expectations on revenue. The company said it expects earnings, excluding items, for the full year to come out between 39 and 43 cents per share, while prior guidance suggested earnings between 63 cents and 69 cents. — Pia Singh 8:51 a.m. ET: Barclays upgrades Unilever, highlights European equity exposure and new CEO Unilever can benefit from new leadership under chief executive Hein Schumacher, according to Barclays. The firm upgraded the consumer multinational to overweight from equal weight in a Thursday note. “Having digested CEO Hein Schumacher’s strategy update and targets for Unilever, we turn more positive on the name,” analyst Warren Ackerman said. “Things might not get better quickly given a weak starting point with only 38% of its global portfolio winning share at present, but we do feel confident that there is urgency and clarity in the new CEO’s plans, even if the content of the plan was not new.” — Brian Evans 8:08 a.m. ET: Oppenheimer stays bullish on Target While near-term headwinds are still in sight for Target , the company’s long-term bull case “remains intact,” according to Oppenheimer. The firm has an outperform rating on shares. It pulled back its price target by $15 to $150 ahead of Target’s third-quarter earnings report on Nov. 15. Analyst Rupesh Parikh cited continued discretionary category headwinds to pressure results going into 2024. “For longer-term players, we view current levels as an attractive entry point and believe a bottom in TGT shares is in around the $100 level. We would continue to take advantage of any dips,” Parikh said. Parikh said looking forward, he sees potential for a multiyear profit recovery and share gains for the company. Target shares have struggled this year, losing more than 26%. TGT YTD mountain TGT in 2023 — Hakyung Kim 7:43 a.m. ET: Here are analyst takeaways after Arm’s fiscal second-quarter results A better-than-expected full-year outlook from Arm Holdings is underpinning analyst optimism on the stock. The company surpassed analyst revenue estimates in the second-quarter and also doubled its licensing business over the past year. “We believe that overall chip design activity for datacenter /accelerated compute has been accelerating and that AI is penetrating across multiple end markets, which is benefitting Arm,” JPMorgan analyst Harlan Sur wrote in Thursday note. The firm reiterated an overweight rating on Arm stock and maintained a $70 per share price target, or nearly 29% upside from Wednesday’s $54.40 close. “We continue to expect further improvement in FY25/26 driven primarily by the shift toward dedicated product by end market and the rapid growth in silicon content in a number of those end markets,” Citi analyst Andrew Gardiner said. The firm restated a buy rating on Arm stock and left its $65 per share price target unchanged, which implies roughly 19% upside. — Brian Evans 7:38 a.m. ET: Apellis Pharmaceuticals can rise more than 50% Apellis Pharmaceuticals is due for a big rebound, according to Goldman Sachs. Shares are down 9% year to date due to a steep fall in July that came after the company disclosed some risk events associated with one of its key drugs, Syfovre. However, analyst Salveen Richter said that the selloff appears to be an overreaction and initiated coverage of the stock with a buy rating. “While we anticipate additional retinal vasculitis events will occur, if the profile of the drug is intact over time, we would anticipate an inflection in Syfovre uptake,” the note said. There is a competitor drug for Syfovre in geographic atrophy, a condition that can cause vision loss. However, the Apellis product is in strong position, Goldman said. “Syfovre continues to support an increasing treatment effect over time, and is in our view the more compelling asset in GA given this clinical data,” the note said. Goldman set a price target of $74 per share for Apellis. That is about 57% above where shares closed on Wednesday. — Jesse Pound 7:19 a.m. ET: Citi upgrades Wish, highlights balanced risk-to-reward skew ContextLogic, which does business as Wish , can still find growth with a strong roster of assets despite higher competition, according to Citi. The firm upgraded shares to neutral from sell in a Wednesday note, and slightly increased its target price to $5.50 from $5. Citi’s forecast implies roughly 4% upside from Wednesday’s $5.28 close. “WISH still has a lot of operational improvements to make on a stand-alone basis. While management has worked to improve the user experience and merchant base on the platform, the pullback in advertising to help profitability has led to a significant decline in users,” analyst Ygal Arounian said. “That said, we do see some value in assets, particularly in logistical operations, particularly in a world where cross-border trade from China is growing in importance.” Shares have struggled in 2023, losing more than 63%. However, they’re up 23% this week on the back of a smaller-than-expected loss for the third quarter. — Brian Evans 7:11 a.m. ET: HSBC upgrades Anheuser-Busch InBev HSBC thinks Anheuser-Busch InBev can still grow in a smaller U.S. market. The firm upgraded the Bud Light maker to buy from hold. “Investors don’t need the US to work for the stock to rerate as the market seems to have fully priced in US softness for Bud Light. What we like is that the Middle America division has stepped up and supplanted North America as the group’s largest growing business unit,” analyst Carlos Laboy said. AB InBev shares are down more than 1% for the year. However, the stock is up more than 12% over the past month. BUD 1M mountain BUD 1-month chart — Brian Evans 6:52 a.m. ET: JPMorgan upgrades Montrose Environmental, highlights ‘pure-play’ on ESG JPMorgan is stepping up its outlook on Montrose Environmental after third-quarter results. The firm upgraded the environmental services stock to overweight from neutral in a Thursday note, albeit with a $41 per share price target down from $46. “We are increasing our 2023E adj. EBITDA to $81M from $78M to reflect the company’s performance in 3Q23,” analyst Stephanie Yee said. “We are also increasing our 2024E adj. EBITDA to $90M from $89M to reflect our higher margin expectation, while we are maintaining our 2025E adj. EBITDA at $98M.” “Montrose can be considered a pure-play ESG company as MEGs services are directed toward improving the environment,” the analyst said. “The company was founded in 2012 and has grown at a 20%+ CAGR over the years, with annual organic revenue growth of high single digits and considerable M & A.” 6:37 a.m. ET: Deutsche Bank upgrades Parker Hannifin, highlights maneuverability Deutsche Banks thinks Parker Hannifin’s ability to navigate macroeconomic headwinds will help boost the stock. The bank upgraded shares of the motion and control stock to buy from hold in a Wednesday note, and raised its price target to $506 per share from $462. Deutsche’s forecast implies more than 23% upside from Wednesday’s $410.66 close. “We believe Parker Hannifin is increasingly becoming a core holding within Industrials for PMs, and rightfully so – the company has proven its ability to deliver superior operational execution in many macro environments,” analyst Nicole DeBlase said. “This can certainly be attributed to the company’s Win Strategy, but also to significant portfolio change over the past decade, which has created better balance in PH’s revenue profile (and brought greater secular growth potential).” Parker Hannifin shares have outperformed this year, rallying 41%. PH YTD mountain PH year to date — Brian Evans 6:30 a.m. ET: Barclays upgrades Valaris after third-quarter results Barclays likes what it’s seeing from Valaris after the company’s third-quarter earnings print. The firm upgraded the offshore drilling company to overweight from equal weight in a Thursday note and raised its price target to $106 from $84. Barclays’ forecast implies nearly 60% upside from Wednesday’s $66.40 close. Despite missing estimates on the top and bottom line in the third-quarter, Barclays raised its full-year EBITDA forecast for 2023 and 2024 to $131 million and $549 million, respectively. “Our investment case is based on a DCF-based valuation which assumes that leading-edge day rates in the GOM are at $450k/d today, which increases to $500k/d by mid-2025,” analyst Eddie Kim wrote. — Brian Evans 5:55 a.m. ET: Here’s what some analysts are saying after Disney’s fourth quarter results Analysts on Wall Street are striking an optimistic tone following Disney’s fourth-quarter results. Questions surrounding both direct-to-consumer as well as ESPN’s full integration into streaming loomed large ahead of the report. Analysts are largely sticking by Disney stock and say they’ve seen adequate progress to continue growing the business, however. “Our key takeaway from the report and call is the same as last quarter, which is that DIS is making progress against management’s lengthy to-do list. The most notable area of traction, in our view, is against DIS’s cost savings initiatives,” Goldman Sachs analyst Brett Feldman wrote. The bank reiterated a buy rating on Disney with a $120 per share price target, or about 42% upside from Wednesday’s $84.50 close. Bank of America’s Jessica Reif Ehrlich also reiterated a buy rating on Disney, albeit with a $110 per share price target, which implies more than 30% upside. “While several strategic questions remain, we remain confident in Bob Iger’s ability to navigate the company through this transition period,” she said. — Brian Evans 5:49 a.m. ET: Evercore ISI says buy Five Below and Target ahead of earnings Evercore ISI added Five Below and Target to its tactical outperform list ahead the companies’ earnings reports: On regarding Five Below, analyst Michael Montani said the company has “been able to buck the industry moderation trend, with positive traffic, comps and a constructive outlook likely for its discretionary core business into the all important holiday season (35% of CY22 Sales, 65% of profit).” Meanwhile, analyst Greg Melich said Target’s “near term comp pressures are well understood, while Target’s ability to manage earnings can drive EPS upside.” “With TGT trading near pre-pandemic levels and down 28% YTD, we believe that the stock reflects much of the bad news of a softer consumer backdrop, mix headwinds, and operational missteps over the course of the past year and a half,” he said. Target reports earnings next week. Five Below is slated to post results in December. — Fred Imbert 5:49 a.m. ET: HSBC initiates Tesla coverage at reduce HSBC says Tesla may have gotten ahead of itself. The bank initiated coverage of the electric vehicle giant with a reduce rating accompanied by a $146 per share price target. HSBC’s forecast implies more than 34% downside from Wednesday’s close. “As outsiders, we struggle to challenge the feasibility of the group’s ideas. So, our caution stems from the uncertainty around the timing and commercialisation of its varied ideas,” HSBC head of European automotive Michael Tyndall said. “We see considerable potential in Tesla’s prospects and ideas, but we think the timeline is likely to be longer than the market and valuation is reflecting.” “Tesla delivers but rarely adhering to the promised timelines,” he said. “Whether it is a function of overly ambitious timelines … or delays with Gigafactory licenses and applications, production delays appear to be becoming the norm.” Tesla shares have surged more than 80% this year. TSLA YTD mountain TSLA in 2023 — Brian Evans
[ad_2]
Source link
