(This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A closely watched electric vehicle maker and a cloud software company were among the talked stocks by analysts on Tuesday. Analysts gave their thoughts on Rivian’s latest quarterly results, with noting there’s still uncertainty looming around the company. Meanwhile, Baird upgraded Datadog to outperform after a sell-off in the previous session. Check out the latest calls and chatter below. All times ET. 7:19 a.m.: JPMorgan upgrades International Flavors & Fragrances, cites year-ahead performance JPMorgan is bracing for a strong year for shares of International Flavors & Fragrances . “Investor momentum has pivoted towards growth and IFF is turning a corner after reporting (~7%) lower volumes last year,” wrote analyst Jeffrey Zekauskas, noting that shares have rallied about 17% this year. The upgrade comes on the heels of a strong first-quarter earnings report from the flavors ingredient company and cosmetics maker earlier this week. Along with these strong results, Zekauskas cited improving volume trends and heightened confidence in the company’s new CEO among his reasons for the upgrade. Zekauskas also lifted his price target to $100 from $75 a share to reflect the recent share appreciation, higher EBIDTA estimates and strong consumer trends. The updated target implies 6% upside from Tuesday’s close. “We seem to be in a market in which investors are envisioning stronger rates of future growth,” he wrote. Shares rose 1% before the bell, following a 6% jump during Tuesday’s session. – Samantha Subin 6:37 a.m.: Goldman Sachs downgrades ZoomInfo Technologies, cites difficult hiring backdrop Goldman Sachs is bailing on shares of ZoomInfo Technologies as the company grapples with a softer rebound in tech hiring and a slower path to growth. “We move to Sell given the increased lack of visibility around an inflection in the aforementioned trends,” said analyst Kash Rangan. Shares of the software company shed nearly 23% before the bell on the back of its quarterly print. ZoomInfo beat top-and-bottom line expectations but offered weaker-than-expected guidance for the current quarter. Rangan is waiting for signs of a recovering hiring backdrop and improving execution to turn more constructive on shares. He lowered his price target to $12, implying 25% downside from Tuesday’s close. “Amid a challenged spending backdrop, softer macro signals and after working through two large renewal quarters in 4Q/1Q, the lack of upcoming catalysts that can support revenue re-acceleration leads us to expect a more gradual top-line re-acceleration story,” Rangan wrote. – Samantha Subin 6:19 a.m.: Wall Street reacts to Reddit’s first earnings print as a public company Reddit’s first earnings report since hitting the public markets in March is garnering some mixed responses from Wall Street analysts. The social media stock jumped more than 14% in the premarket after the company reported stronger-than-expected quarterly results and showed significant digital advertising growth. The company also reported 82.7 million daily active users, surpassing estimates. RDDT 1D mountain RDDT pops Bernstein analyst Mark Shmulik called the print a “solid start” but retained his underperform rating, anticipating some difficult comparisons following the second quarter. “Reddit appears to be reaping the benefits of a strong digital ad market, buoyed by some ‘free’ IPO-marketing, alongside increased traffic courtesy of their new favorite AI partner Google,” he wrote. “Now, can they keep the good times rolling?” JPMorgan’s Doug Anmuth boosted his target to $57 from $47 a share, reflecting, but retained his neutral rating as he awaits “greater confidence” in the company’s daily active user trajectory over the long run. “Strong quarter out of the gate as product momentum & ad market recovery drive upside,” he wrote, saying that shares look fairly valued at 7 times 2025 revenues. Bank of America’s Justin Post also highlighted the company’s strong first-quarter execution but said most of the upside already appears priced in. He also expects some volatility going forward following an “exceptionally strong” quarter for online advertising. Elsewhere, Citi’s Ronald Josey viewed the results as a sign of the company’s mounting profitability and monetization growth, lifting his price target to $65 from $53 and retaining his buy rating. The target price reflects about 32% upside from Tuesday’s close. “We believe Reddit’s user base can continue to grow at accelerated growth rates given investments across its web platform, improved AI/ML integrations across its Feeds, newer onboarding flow, and an evolving UX,” he said, noting that Reddit is one of the largest Internet platforms with one of the most significant core total addressable advertising markets. – Samantha Subin 5:47 a.m.: Wall Street remains cautious on Rivian, call EV maker a ‘show me story’ A handful of Wall Street firms are keeping to the sidelines on shares of Rivian in the wake of the electric vehicle maker’s quarterly print. “We maintain our Neutral rating on the stock given the high degree of competition in the EV market, which we believe could limit overall profitability/FCF growth,” wrote Goldman Sachs analyst Mark Delaney, citing uncertainty over whether Rivian can reach its goal of positive gross profit in the fourth quarter. Shares of the EV maker dropped more than 4% before the bell after Rivian said Tuesday that it lost $38,784 per vehicle delivered in the first quarter. Rivian topped Wall Street’s revenue estimates and said it “remains confident in its path to achieving modest gross profit in the fourth quarter of this year” as it makes adjustments and improvements. The stock has dropped more than 56% this year as the EV market grapples with mounting competition. RIVN YTD mountain RIVN year to date Barclays analyst Dan Levy reiterated his equal weight rating, calling the company a “show me story” as Wall Street awaits more clarity on its cost reduction efforts. “RIVN posted a fine 1Q, including an EBITDA beat and maintained 2024 guidance,” he wrote. “Yet we believe the key test ahead for RIVN will be on the path of cost reduction – both in the near-term and in the mid-term upon the launch of R2.” Wells Fargo’s Colin Langan called the reaffirmed adjusted EBITDA guidance for 2024 “reiterated, but fluffed,” saying that the company’s breakeven targets look “challenging.” Langan retained his equal weight rating and trimmed his price target to $10 from $14 a share, reflecting about 2% downside from Tuesday’s close. “Its limited production and commercial history leaves much to be seen,” he wrote “Rivian must prove it can acquire the customer base, while maintaining low advertising costs.” — Samantha Subin 5:47 a.m.: Baird upgrades Datadog Baird thinks it’s time to buy shares of Datadog . The firm upgraded the cloud software company to outperform from neutral and raised its price target to $140 from $130. The new target implies upside of 24%. The rating change comes after a tough day for Datadog. Shares tumbled 11% after President Amit Agarwal announced he would step down from his position. The news overshadowed better-than-expected first-quarter earnings and revenue. However, Baird analyst Will Power sees this pullback as a buying opportunity. “DDOG possesses the industry-leading cloud native observability platform that we believe should continue to benefit from the accelerating shift to the cloud,” Power wrote. “Though early, AI is already contributing to growth, and industry share gains from Cisco/Splunk and others could provide an additional tailwind.” “In short, we like the multi-faceted growth opportunity, and expect its combination of growth and cash flow to stand out,” he said. Datadog shares are down more than 7% year to date. DDOG YTD mountain DDOG year to date — Fred Imbert
Wednesday’s analyst calls: Rivian earnings reaction, cloud stock to jump more than 20%
May 8, 2024
