[ad_1]
(This is CNBC Pro’s live coverage of Monday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest post.) The new week kicked off with a downgrade to the world’s largest lithium producer and an upgrade to one of the best-known car brands in the world. UBS lowered its rating on Albemarle to neutral from buy, slashing its price target by more than 40%. The bank cited uncertainty around the company heading into the new year. Meanwhile, Barclays raised Ferrari to overweight from equal weight following a strong third-quarter report. A slew of shops also initiated coverage of Birkenstock , while Bank of America said it was optimistic on Nvidia ahead of the company’s quarterly report this week. Check out the latest calls and chatter below. 7:29 a.m. ET: Lower interest rates can help Bank of America, KBW says Bank of America could get a boost as bond yields recede, according to KBW. Analyst David Konrad upgraded shares of the well-known bank to market perform from underperform. The upgrade is tied in part to a pullback in interest rates after some U.S. Treasury yields recently hit multiyear highs. “We believe the lower rates may drive favorable positioning in the stock,” Konrad said. Konrad also raised his price target by $1 to $30. His new target implies shares could rise 5.6% in the next year. That would mark a reprieve for the stock, which has fallen more than 14% so far in 2023. BAC YTD mountain BAC in 2023 — Alex Harring 7:19 a.m. ET: Buy Confluent as data becomes increasingly important with AI, RBC says RBC Capital Markets sees an opportunity for Confluent as data plays key role in generative artificial intelligence. Analyst Matthew Hedberg initiated coverage of the data stock at an outperform rating with a $22 target price for shares. Hedberg’s price target implies shares could climb 23.9% over the next year from Friday’s close. “We believe having access to real-time data will be more important in a GenAI world and think that Confluent, which acts as the plumbing layer for data, is in a good position to aid the growing cloud application ecosystem,” he said. Hedberg added that Confluent’s focuses on data streaming and processing should help the company be profitable in the long term. Shares advanced 1.4% in Monday premarket trading. The stock has struggled in 2023, losing more than 20% on a year-to-date basis. — Alex Harring 7:08 a.m. ET: What Citi is looking for in Disney earnings Analyst Jason Bazinet kept his buy rating on Disney but cut his price target by $10 to $110 ahead of the industry titan’s fiscal fourth-quarter report on Wednesday. Still, Bazinet’s new target implies shares can climb 29.3% over the next year. Part of the focus on 2024 will be Disney+, as the company has previously said the streaming service should be profitable by the end of the fiscal year. Bazinet said that target will likely be reiterated when Disney reports earnings. — Alex Harring 6:54 a.m. ET: Jefferies sees Amazon as positioned to ‘win’ holiday shopping season amid broader strength in e-commerce While data analyzed by Jefferies showed American holiday shopping should increase at a slower clip this year, the firm sees e-commerce as a standout area. Analyst Brent Thill said third-party data shows U.S. holiday sales growth should cool to 4% in 2023, down from 6% a year prior. But e-commerce sales specifically should grow 9% this year, up from 7% in 2022. Firm data also bodes well for online shopping, Thill said. The data shows 38% plan to spend more online this year, while just 11% plan to shell out less. As e-commerce bucks the trend, Thill recommended Amazon shares. “We see AMZN as well positioned to win this holiday,” he said, adding that the company has “unmatched assortment, fast delivery and broad consumer reach.” — Alex Harring 6:53 a.m. ET: BofA double downgrades Paramount due to dearth of sales opportunities Bank of America double-downgraded Paramount Global to underperform from buy, citing a lack of notable opportunities to sell parts of the business in the near term. In addition to the downgrade, analyst Jessica Reif Ehrlich slashed her price target on the stock to $9 from $32. Reif Ehrlich’s new price target reflects downside potential of 34.6%. “Our prior bullish thesis and valuation methodology was predicated on PARA’s inherent asset value in a potential sale,” she told clients Monday. “Despite receiving credible bids for several different assets … it does not appear any significant asset sales are on the horizon.” Shares slid 5.1% in Monday premarket trading. The stock has underperformed in 2023, losing about 18.5% year to date. PARA 1D mountain PARA falls — Alex Harring 6:37 a.m. ET: Export restrictions and 2025 will be central to Nvidia’s earnings report, Bank of America says Bank of America is optimistic heading into Nvidia earnings and said investors will be focused on two key themes that can help decide the direction of the stock going forward. Analyst Vivek Arya said the company should beat quarterly expectations and improve its outlook for future performance when reporting later this month. It has already been a banner year for the company, as the artificial intelligence craze has helped propel shares up more than 200% in 2023. Beyond that, Arya said investors will look for insights into how U.S. restrictions on the shipping of advanced artificial intelligence products to China has impacted the businesses. They will also be watching for any 2025 expectations more broadly to see if the booming demand experienced in 2023 can remain. The analyst has a buy rating on Nvidia and a price target of $650 per share. That forecast implies upside of more than 44%. — Alex Harring 6:19 a.m. ET: Barclays upgrades Dominion Energy after strong earnings Dominion Energy’s days of underperforming may soon be behind it — and investors should buy in now, according to Barclays. Analyst Nicholas Campanella upgraded the stock to overweight from equal weight and raised his price target by $2 to $47. Campanella’s price target reflects a 7.8% upside over Friday’s close. Campanella called the company’s third-quarter earnings call last week a “positive inflection point.” He specifically pointed to the fact that earnings per share revisions are likely going to hit a bottom in the next quarter. That comes amid a difficult year for the stock. Shares have tumbled nearly 29% since 2023 began, while the S & P 500’s utilities sector has lost just around 12.5% in the same period. D YTD mountain D in 2023 “D is currently in the 8th inning of a wider restructuring story which has driven … underperformance vs. UTY peers,” Campanella said, adding that it has been a “painful review” for the company. Despite the recent challenges, Campanella said Dominion’s execution on a gas distribution sale and progress toward finding an equity partner for a key project can help the company repay debt while keeping its dividend. — Alex Harring 6:10 a.m. ET: Wall Street firms initiate Birkenstock shares The Wall Street initiations are rolling in for Birkenstock nearly a month after the iconic clog shoemaker went public. Banks such as Citi, Goldman Sachs and JPMorgan initiated the stock with buy-equivalent rating. “Birkenstock is a one-of-a-kind brand that sells (using a scarcity model) comfort footwear that is also ergonomically as intended by nature to provide the correct support for the foot,” said Citi’s Paul Lejuez. “BIRK is one of the fastest growing companies in retail and has industry leading EBIT margins.” Baird also initiated the stock with an outperform rating, referencing the movie “Happy Feet.” “Birkenstock is an iconic brand with a storied history that has endured though decades/generations of fashion cycles,” Baird analyst Mark Altschwager said. “The company is unlocking the potential of the brand through disciplined channel management, compelling product innovation, and investments in production capacity, together supporting growth even in a weaker macro spending backdrop.” But not everyone was ready to name the stock a buy. Morgan Stanley analyst Edouard Aubin, for example, gave Birkenstock an equal-weight rating. “Birkenstock’s equity story possesses a number of attractions from a financial standpoint,” Aubin said. “However, we see these as largely priced in.” Shares added 1.2% before the bell on Monday. — Alex Harring 5:37 a.m. ET: Barclays upgrades Ferrari, says there’s a buying opportunity in the luxury automaker Barclays has turned more bullish on Ferrari , saying there’s finally an opportunity to buy into the carmaker. Analyst Henning Cosman upgraded the stock to overweight from equal weight.. It has already been a strong year for the stock, with U.S. shares up more than 54% in 2023. RACE YTD mountain RACE year to date Cosman called the company’s third-quarter earnings report last week “very strong,” though he noted full-year guidance was left “undemanding” despite being raised. He added that commentary around pricing, mix, the personalization business and order book pffered positive signals for performance between 2024 and 2026. Ultimately, he said investors should “take the plunge” and buy the stock off earnings. “Like many, we have always liked Ferrari for its impressive execution, unique earnings visibility and strong insulation from macro factors thanks to its UHNWI target audience,” Cosman said, using the acronym for ultra-high-net-worth individuals. “However, also like many, we were hoping for a better entry point, as factors like its EURO STOXX 50 inclusion, a priced-in guidance increase and all-time low discount to Hermes … all made Ferrari’s valuation seem pretty full. We are pivoting from this view today.” — Alex Harring 5:37 a.m. ET: UBS downgrades beat-down lithium stock Albemarle as demand slides UBS is moving to sidelines on Albemarle as the firm said it saw increased uncertainty for the chemical stock. Analyst Joshua Spector downgraded the stock to neutral from buy and slashed his price target to $140 from $253. Still, Spector’s new target still implies an upside of 9.4% over Friday’s closing, underscoring how much shares have struggled in 2023 with the stock down about 41% year to date. “We see a greater risk to lithium volume growth and more downside earnings risk to 2024,” Spector told clients on Monday. ALB YTD mountain ALB in 2023 Spector pointed to the fact that the price of lithium, one of Albemarle’s main focus areas, has turned down in recent weeks after beginning to move positive as one reason for concern. Others include less optimistic growth expectations for the electric vehicle market and worse spodumene prices. After the stock’s selloff this year, Spector said the stock could be undervalued if prices rise if there’s a more normalized environment in 2025. But he said he’d need more visibility into demand, pricing and capital expenditure trends to get more optimistic. — Alex Harring
[ad_2]
Source link