(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A software giant and a home improvement retailer were among the stocks being talked about by analysts on Tuesday. Piper Sandler upgraded shares of Salesforce to overweight, with its new price target implying upside of more than 20%. Lowe’s, meanwhile, got an upgrade to outperform at Oppenheimer. Check out the latest calls and chatter below. All times ET. 8:06 a.m.: Guggenheim sets buy rating for GE Vernova Guggenheim believes there’s room for GE Vernova to improve its profitability for investors. The investment firm initiated coverage of the energy stock with a buy rating and $300 price target, which implies that shares could rise another 19%. Guggenheim analyst Joseph Osha wrote that while shares of GE Vernova currently appear to be trading relatively expensive, he believes there is still sufficient opportunity for the company to improve its earnings and free cash flow margins. “In our view, the question is whether the potential for improvement in subsequent years is sufficient to merit owning the stock. We think the answer is yes,” he wrote. “Our research suggests that GEV is still in the early stages of a multi-year improvement in profitability, and we believe that GEV is an attractive way for investors to participate in electricity load growth in the U.S.” Specifically, Osha pointed to higher demand for gas turbines and electrical infrastructure as key growth drivers for GE Vernova in the future. — Lisa Kailai Han 7:20 a.m.: Truist upgrades Walmart, downgrades Costco Wholesale It’s a tale of two different retailers when it comes to the outlook for shares of Walmart and Costco , according to Truist. Analyst Scot Ciccarelli upgraded shares of Walmart to a buy, citing expectations for ongoing share gains, and downgraded Costco Wholesale to a hold rating in a separate note to clients. “The combination of accelerating share gains, the scarcity value of an offensive and defensive mega-cap and a structurally more profitable company should command a far higher-than-historical valuation,” he wrote in his upgrade of Walmart. The analyst also lifted his price target to $89 from $76 a share, reflecting about 11% upside from Monday’s close. In his downgrade of Costco, Ciccarelli cited a “stretched” despite some solid business fundamentals. “However, some changes like the shift towards scanning IDs on entry and packaging changes to their chickens could add some [sales] headwinds, key catalysts are in the rearview mirror and the stock’s valuation leaves little room for error,” he said. The firm maintained its $873 price target, implying about 5% downside from Monday’s close. Shares have surged 39% this year. — Samantha Subin 7:03 a.m.: Oppenheimer initiates Pinterest, cites a ‘compelling flywheel’ Pinterest shares could surge nearly 50%, according to Oppenheimer. Analyst Jason Helfstein initiated coverage of the image-sharing stock, citing a “compelling flywheel” that offers a strong return on investment for advertisers. “Pinterest operates a global discovery platform with high-intent users in search of products and inspiration, lending itself well to direct response advertising,” he wrote. “Relevant ads improve the core user experience, like magazines, driving strong advertiser ROI.” Helfstein placed a $45 price target on shares, implying about 48% upside from Monday’s close. Shares are down about 18% year to date. PINS YTD mountain PINS year to date The analyst also views integrations with Amazon and Google as a major benefit for Pinterest that can help improve cost effectiveness metrics for advertisers. “While PINS’s [daily active user] base is the smallest among social media companies, we see upside to engagement and the valuation is attractive at 12x EBITDA,” Helfstein said. — Samantha Subin 6:39 a.m.: Jefferies initiates Kenvue with a buy rating, says shares can rally nearly 20% It’s time for investors to take a look at shares of Kenvue . Analyst Keith Devas initiated coverage of the consumer health company with a buy rating as the it primes itself for a growth shift. “Kenvue is in the early stages of a transformation,” he wrote. “A business that was run for cash is now being primed for growth. Well-known brands in good categories (skin, beauty, oral care) are getting the reinvestment dollars they need.” Devas put a $27 price target on the stock, reflecting 17% upside from Monday’s close. Shares are up about 7% this year. The firm views the consumer health sector as in the early innings of an overhaul that should bring more deals and capital. He also sees potential opportunities overseas. “Companies with scale have an advantage as assets come to market and capital is needed to revamp tired categories,” Devas wrote. “Kenvue is in a solid position to out-spend peers and reinvigorate growth.” — Samantha Subin 6:29 a.m.: Redburn Atlantic downgraded Exxon Mobil, cites troubled oil backdrop A difficult setup for the oil industry could put pressure on shares of Exxon Mobil , according to Redburn Atlantic. Analyst Peter Low downgraded shares of the oil stock to neutral from buy, citing valuation concerns. “While displaying characteristics well suited to the current environment – a strong balance sheet, distribution resilience and a growth oriented portfolio – this is already reflected in strong YTD performance and shares are trading” at a premium to peers, he wrote. Refining margin weakness could also create a near-term headwind for the company, while supply-demand modeling could suggest a postponement in the unwind of voluntary cuts from OPEC+. Along with the downgrade, Low reduced the firm’s oil price target to $75 from $80 a barrel. He also downgraded shares of BP to neutral, citing similar concerns. “The weaker macro backdrop means we think the buyback will need to be cut next year …,” he wrote. “But even then, we see no clear pathway to meaningfully degear the balance sheet, leaving the company among the most exposed to any further commodity weakness.” — Samantha Subin 6:02 a.m.: Jefferies downgrades Starbucks to underperform Jefferies is bracing for more troubles ahead for shares of Starbucks . Analyst Andy Barish downgraded shares to underperform from hold, citing near term uncertainty. He also slashed his price target to $76 from $80. The new target implies 20% downside from Monday’s close. “While the new CEO suggests necessary strategic change is now on the table, we believe execution will be challenged as issues like ops, culture, value perception and tech take time to fix,” he wrote. Barish anticipates low near-term visibility in both the U.S. and China and believes the coffee chain will offer a lower-than-expected guide for 2025. He also sees a pathway for a downward revision in long-term growth targets. “Next few announcements likely to add uncertainty to the turnaround and stock story, and we believe estimate reductions near and medium-term are on the way, which will create pressure for the stock,” he said. Shares are down marginally year to date. However, they’ve soared more than 2% in the third quarter. SBUX mountain 2024-06-28 SBUX in Q3 — Samantha Subin 5:45 a.m.: Piper Sandler upgrades Salesforce Piper Sandler is turning more bullish on shares of Salesforce . “We are upgrading CRM to overweight based on a favorable risk-reward given the potential for [free cash flow] per share to double to $20+ by F2029 (CY28) from $9.65 in F2024 (CY23), even if top-line growth remains at subdued levels of 8-9%,” wrote analyst Brent Bracelin. “Relative to large-cap software peers, CRM also has the lowest valuation multiple on an EV/S, EV/FCF, and P/E basis.” The firm lifted its price target to $325 from $268 a share, reflecting 23% upside from Monday’s close. Shares gained 2% before the bell. CRM YTD mountain CRM in 2024 Bracelin also views artificial intelligence as another tailwind for the company that should accelerate internal innovation. He also said recent discussions with the company’s leadership team and customers have lifted hopes for a recovery in 2026. “Salesforce has historically provided new platform updates three times per year,” Bracelin said. “The pace of AI has changed this cadence, most notably within Data Cloud, where new platform updates are released monthly.” — Samantha Subin 5:45 a.m.: Oppenheimer upgrades Lowe’s to outperform Lower rates from the Federal Reserve should serve as a boon for Lowe’s shares, according to Oppenheimer. Analyst Brian Nagel upgraded the home improvement stock to outperform from perform. His price target of $305, up from $230, implies upside of 16% from Monday’s close. “Our now somewhat more constructive stance towards home improvement retail and shares of leading chains, Home Depot and Lowe’s, is predicated upon the following key factors,” Nagel said. These include improved retail demand and compelling longer-term fundamentals. He also noted that lower rates tend to drive spending, but it’s not immediate. “We undertook a proprietary analysis, studying prior Fed easing cycles, and impacts upon spending, particularly in home-related categories. Key takeaway: moderating rates tend to underpin stronger demand for home-related items, but often with a substantial lag.” Lowe’s shares were up 1% in the premarket following the upgrade. Year to date, shares are up more than 17%. LOW YTD mountain LOW year to date — Fred Imbert
Tuesday’s analyst calls: Salesforce to pop more than 20%, Lowe’s gets an upgrade
Sep 24, 2024
