(This is CNBC Pro’s live coverage of Friday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Dell Technologies and Lionsgate Studios were among the stocks being talked about by analysts on Friday. Analysts on Wall Street reacted to Dell’s latest quarterly results — which sent the stock tumbling. However, some maintained a positive outlook on the company. Citi, meanwhile, initiated Lionsgate Studios with a buy rating. Check out the latest calls and chatter below. All times ET. 7:41 a.m.: UBS upgrades Bilibili to buy, sees a rosy outlook ahead A series of tailwinds is set to boost shares of Bilibili , according to UBS. The bank upgraded the China-based software company to a buy rating. Analyst Felix Liu accompanied the move by hiking his price target to $18 from $11.90, implying that shares could rise 25% from their current levels. Shares of Bilibili have risen 18% this year. The analyst cited a strong advertising outlook as a catalyst for future outperformance. “Despite the challenging macro landscape, Bilibili’s Q1 advertising revenue jumped 31% YoY, faster than any of its online media peers. We expect Bilibili’s ads revenue to benefit from bottom-up improvements and demand tailwind in 2024,” he wrote. Meanwhile, Bilibili’s legacy games business should also be strengthening, providing some relief against stiff competition in the market. The analyst added that Bilibili’s video views increased “a healthy” 22% year over year, while its collaboration with different e-commerce platforms is likely to strengthen the monetization of its user traffic. “We think the market is overlooking its outperformance in ads and potential turnaround of profit,” the analyst added. — Lisa Kailai Han 7:39 a.m.: Buy the dip in Viasat, JPMorgan says The sell-off for Viasat has gone too far and the stock is due for a big rebound, according to JPMorgan. Shares of the communications technology company are down 41% year to date, and 12% since its most recent earnings report on May 21. JPMorgan analyst Sebastiano Petti reiterated an overweight rating on the struggling stock, saying in a note to clients that investors should buy the dip before Viasat’s capacity ramps up. “We believe current valuation of 4.8x ’25E EBITDA provides an attractive entry point as VSAT’s additional capacity comes online over the next several years and the company progresses toward FCF generation in calendar 1H25,” the note said. The company is barely valued at more than its cash balance, Petti said. “At current levels, VSAT’s market cap of $2.08b represents equity value of $257m to the business comprised of the current $1.90b cash balance, ~$260m remaining insurance proceeds (expected in F2025), and $341m estimated cash burn over the next 12 months,” the note said. JPMorgan did lower its price target on Viasat to $23 per share from $30. The new target is still 39% above where the stock closed Thursday. — Jesse Pound 7:26 a.m.: Oppenheimer initiates outperform on Beazer Homes Homebuilder Beazer Homes is in a growth stage, according to Oppenheimer. The firm initiated coverage on Beazer Homes with an outperform rating. Its $37 price target implies shares rallying more than a third from Thursday’s close. Analyst Tyler Batory is confident the company can grow its closing volumes by 12% and 15% in 2024 and 2025, respectively, thanks to a better leverage profile, high lot count and differentiated offerings. “We believe the valuation also looks attractive with the stock trading at only 5.5x our NTM EPS estimate. Our view is that multiple can expand as BZH proves to the market the durability of its growth trajectory,” Batory wrote in a Thurday note. Batory also highlighted the company’s READY series homes, which he said holds some of the highest energy efficiency standards among homebuilders. Year to date, shares are down more than 18%. — Hakyung Kim 6:43 a.m.: Casino company Wynn upgraded to buy Wynn Resorts has been oversold in 2024, according to Seaport Research Partners. The firm upgraded shares to buy from neutral. Its $116 price target indicates around 25% upside for the stock. The stock is up just over 1% year to date. Analyst Vitaly Umansky believes the stock’s weak performance is “unwarranted,” citing strong first-quarter results in Macau and resilience in the Las Vegas market. “At current its current valuation level, WYNN is a compelling buy over the next few quarters as Macau continues to ramp up (even in the face of a stagnating Las Vegas that is well anticipated already),” Umansky wrote in a Thursday note. — Hakyung Kim 6:10 a.m.: Wolfe Research upgrades Fifth Third Bank Regional bank Fifth Third is “a ‘steady Eddie’ performer,” according to Wolfe Research. The firm upgraded Fifth Third to outperform from peer perform. It reiterated its $43 price target on shares, which indicates 17% upside potential from Thursday’s close. “FITB is a stable operator that we expect will block and tackle its way to generating the greatest alpha in our regional banks coverage over the next 12 months,” analyst Bill Carrache wrote in a Friday note. Carrache cited upside momentum factors include stronger loan growth, healthy reserves, buyback capacity and notable operating efficiency. Shares gained 1.3% Friday before the bell. The stock is up around 7% in 2024, slightly lagging behind the S & P 500’s 10% rise. — Hakyung Kim 5:59 a.m.: Wall Street remains bullish on Dell Dell tumbled 15% premarket after the company posted in-line fiscal first-quarter results and warned of margin pressures. Despite the muted results, major investment firms on Wall Street are staying optimistic on the stock. “Margins will come; AI is a long game,” Bank of America analyst Wamsi Mohan wrote in a note. The analyst reiterated his buy rating, noting that AI adoption is still in the early stages. Dell has a “continued strong pipeline and momentum around AI servers, where we think DELL will be able to capture higher AI margins over time,” Mohan said. He kept his $180 price target on shares, indicating just 5.9% upside from Thursday’s close. DELL 1D mountain DELL falls Goldman Sachs analyst Michael Ng is also encouraged by Dell’s AI server demand and shipments. Infrastructure service group margins, which hit a record low in the previous quarter, are also expected to improve throughout the rest of the year, he noted. Ng reiterated his buy rating. His $160 price target indicates nearly 6% downside from where shares closed on Thursday, however. Morgan Stanley, meanwhile, said “Near-term expectations got ahead of themselves, but we’re confidently buying the dip as our FY26 EPS increases to $10.34 given building AI ecosystem momentum.” Analyst Erik Woodring believes the weak ISG margins were mostly due to pricing competition and underperformance in the Storage segment, which he believes can be corrected.” “What stood out to us positively, and is more impactful to our Overweight thesis, is that AI server momentum continues to build, with April qtr rev rec better than we expected, orders higher than expected, backlog and pipeline combined in the $12B+ range exiting the quarter (greater than our FY25 AI server revenue forecast), margins flat to improving, and mgmt hinting that CSP demand for AI servers should grow Y/Y in FY26,” he said in a Friday note. Woodring reiterated his overweight rating on shares. He notched up his price target by $3 to $155. — Hakyung Kim 5:59 a.m.: Citi says Lionsgate Studios is a buy Lionsgate Studios’ struggles have created a big buying opportunity for investors, according to Citi. The bank initiated coverage of the TV and movie studio with a buy rating. Its price target of $14 implies upside of more than 73% from Thursday’s close. The company was spun off from Lionsgate Entertainment earlier in May, and effectively separates the Starz network from the studio. Since then, Lionsgate Studios has dropped about 20%. However, Citi analyst Jason Bazinet has high hopes for the stock. “LION has a long, successful track record as a pure play content company. We believe the firm’s recent decision to spin-off Starz (which should be complete by year-end CY24) may lead to multiple expansion,” he said. “From ’08 to ’13, segment profits were sporadic. Since ’14, however, LION has generated enough revenue to offset expenses (ex-corporate G & A) every year including COVID and the ’23 Hollywood strikes. This success is underpinned by consistent execution, a tilt toward lower risk TV Production investments and a large, growing library,” he added. — Fred Imbert
Friday’s analyst calls: Studio stock to rally more than 70%, what the Street says about Dell earnings
May 31, 2024
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