(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 posts.) Two tech stocks were among the names being talked about by analysts on Monday. Citi named Micron Technology a top pick ahead of the company’s earnings report this week. Meanwhile, Goldman Sachs initiated coverage of IBM with a buy rating. Check out the latest calls and chatter below. All times ET. 8:05 a.m.: TD Cowen upgrades Planet Fitness Planet Fitness is now a top small- and mid-cap pick on the back of fresh catalysts, TD Cowen says. Analyst Max Rakhlenko upgraded the stock to buy from hold, and hiked his price target, saying a number of initiatives at the company have made the stock attractive. These changes include a price increase in the company’s standard “Classic Card” membership, as well as a new chief executive. “We believe a compelling catalyst path and modest valuation provide an attractive risk-reward,” Rakhlenko wrote. “Our thesis is based on (1) Upside to Street’s FY25E EPS driven by the Classic Card monthly price increase to $15 from $10. (2) An improvement in gym economics should accelerate openings starting in FY25 and by FY26E we model 165 franchise openings (186 total), which may prove to be conservative. (3) A new CEO has a robust initiative roadmap that will support share momentum.” Planet Fitness has underperformed in 2024, down slightly on the year. However, Rakhlenko’s $92 price target, up from $66, is 26% above where shares closed on Friday. The stock was up 2% in premarket trading. — Sarah Min 7:43 a.m.: Bank of America hikes price target for Broadcom, sees 30% upside Broadcom’s rally still has plenty of room to run, according to Bank of America. Analyst Vivek Arya raised the firm’s price target on the chip stock to to $2,150 from $2,000. The new target is 30% above where Broadcom’s stock closed Friday. Broadcom is a top pick for Bank of America. “In our view, AVGO’s diverse growth drivers, highly regarded management team, and unique track-record of capital appreciation, dividend growth and above mkt. div yield can justify a premium multiple,” Arya said in the note to clients. Chip stocks have benefitted from excitement around AI, even beyond Nvidia. But Broadcom seems to be underowned, according to Bank of America. “Despite being the #8th largest stock in the S & P 500, AVGO’s institutional ownership, per BofA’s Strategy team, remains well below market weight. AVGO’s trailing 43% [free cash flow] is second only to NVDA in all of semis, while it leads semis in combo of 15% annual dividend growth and above market 1.25% indicated dividend yield,” the note said. — Jesse Pound 7:31 a.m.: Morgan Stanley initiates Elevance Health at overweight rating Elevance Health is emerging as a long-term winner, according to Morgan Stanley. Analyst Erin Wright initiated the health insurance stock at an overweight rating, simultaneously setting a price target of $643. This implies that shares of Elevance Health could climb 20% from their current level. Elevance is up 13% this year. Wright thinks the stock could continue to benefit from a slate of diversified profit drivers across multiple verticals. “We also view unique drivers in scaling its PBM, Specialty Pharmacy, and Carelon Services as underappreciated by the street, with multiple levers driving durable +DD earnings growth going forward,” she wrote. The analyst added that Elevance has the infrastructure in place to scale both its prescriptions and service segments, with potential mergers and acquisitions activity supplementing further upside growth to estimates. — Lisa Kailai Han 7:15 a.m.: Citi initiates Ally Financial as a buy, calls stock a ‘best play on soft landing’ Ally Financial represents one of the best plays for a potential soft landing, according to Citi. Citi analyst Keith Horowitz initiated the bank stock at a buy rating, setting a price target of $50. This implies that shares of Ally Financial could add 26% on top of their 14% year-to-date return. The analyst noted that the stock offers an attractive entry point for investors. “Our central case is for a soft landing, and we believe ALLY is the best way to play it within our universe due to fixed rate asset repricing potential combined with a liability sensitive balance sheet,” he wrote. “We see several opportunities for mgmt. to improve returns and capital position faster and higher than expected.” Additionally, Horowitz noted that Ally also has an improving credit outlook. The bank’s new origination credit spreads also look very attractive, giving it a leg up over its competition. However, Horowitz cautioned that the stock’s central issue is that analysts have fully priced in their 2025 consensus estimates. “There are clearly risks to hitting that number due to slower balance sheet growth and credit costs where the bar is fairly low,” he added. — Lisa Kailai Han 7:02 a.m.: Citi upgrades Carrier Global to buy, sees 17% upside Citi sees room for Carrier Global to rally over the long term. Citi analyst Andrew Kaplowitz upgraded his rating for the heating and ventilation company to buy from neutral. The analyst accompanied the move by upping his price target to $74 from $65, implying that shares of Carrier Global could rally 17% going forward. Carrier Global stock has added 9% this year. CARR YTD mountain CARR year to date Kaplowitz noted that his upgrade includes several key assumptions, one being that Carrier Global “will be done/mostly done with its transformation entering 2025, leading to an alternative ‘pure play’ HVAC company with an improving multiple,” he wrote. However, Kaplowitz pointed out that the company’s recent acquisition of Viessman Climate Solutions could pose a near-term weakness. But the analyst added that Carrier has the levels in place to offset these potential headwinds. Meanwhile, Carrier’s core markets also look poised to grow in the mid-single digits over the next couple of years. “Ultimately, CARR remains a work-in-progress and we don’t expect ‘straight-line’ improvement, but the company is well run with leading share in one of our favorite end markets, and we see room for further upside,” the analyst added. — Lisa Kailai Han 6:48 a.m.: Jefferies raises its price target for ‘king and kingmaker’ Nvidia Nvidia’s newest innovations in the artificial intelligence space means the company will keep its crown, according to Jefferies. The financial institution raised its price target for Nvidia to $150 from $135. The new forecast implies shares of the graphics processing unit manufacturer could rally 19%. Nvidia is up nearly 156% this year, although it fell last week. However, analyst Blayne Curtis still believes that the stock will continue to keep its position as industry leader, with its competition trailing behind. “NVDA remains both king and kingmaker — for example, we still see growth for MRVL and ALAB alongside NVDA, but NVDA’s decisions on each generation could materially alter that,” he wrote. Meanwhile, Curtis also sees strong upside potential for Nvidia in the China marketplace. “We expect NVDA to ramp its newest chip for the China (H20) in the 2H but are cognizant of risks from the US government lowering the AI performance restrictions threshold which would block sales,” he noted. “We expect NVDA to ramp its newest chip for the China (H20) in the 2H but are cognizant of risks from the US government lowering the AI performance restrictions threshold which would block sales.” — Lisa Kailai Han 6:18 a.m.: Morgan Stanley lists UnitedHealth as a top pick UnitedHealth is Morgan Stanley’s latest top stock pick. Analyst Erin Wright stood by her overweight rating on the health insurance stock, reiterating her $595 price target. This implies that shares of UnitedHealth could rise 23% from their Friday’s close. UnitedHealth as slipped 8% in 2024, opening an attractive point of entry for investors, Wright said. “Its relative share price performance presents an opportunity in our view,” she wrote. As catalysts, the analyst underscored UnitedHealth’s position as the number one Medicare Advantage player alongside its strong balance sheet and solid cash generation. Meanwhile, UnitedHealth’s business model is enhanced by its vertical integration efforts. “With a large lead in breadth of services offerings and considerable exposure to government businesses, UnitedHealth is well positioned for any potential changes in the US healthcare system,” Wright added. In the same note, Morgan Stanley initiated shares of Humana at an equal-weight rating. Wright set a price target of $374, which is 23% higher than the insurance company’s Friday closing price of $355.48. Shares of Humana are down 22% on the year. — Lisa Kailai Han 5:59 a.m.: Bernstein stands by outperform rating on Ferrari after recent event The outlook for Ferrari looks rosy from here, according to Bernstein. The financial firm stood by its outperform rating on shares of Ferrari after the luxury sports manufacturer hosted a sell-side and media event last week. Bernstein also reiterated its $512 price target, which implies that Ferrari stock could rise 23%. Shares of Ferrari have rallied nearly 23% year to date. Analyst Stephen Reitman cited the company’s “absolute commitment to its very successful business principles,” demonstrated at the event, as a catalyst going forward. “What we saw was the sheer scale and determination of Ferrari to future proof its business fundamentals rather than an intention to meaningfully increase production in the near term,” he wrote. Additionally, Reitman noted the “deep thought process” behind Ferrari’s first fully electric vehicle, which is due out in the fourth quarter of 2025. The automobile manufacturer also shared more details behind its new e-building, designed to produce combustion, hybrid and battery electric vehicles using “state-of-the-art technology,” he wrote. — Lisa Kailai Han 5:57 a.m.: UBS sees 30% upside for shares of Anheuser-Busch InBev It’s all uphill from here for Anheuser-Busch InBev , according to UBS. The bank upgraded shares of the brewing company to a buy rating from neutral. UBS also increased its 12-month price target on the stock to €72 from €63.50. This would represent a 30% upside for the stock. Analyst Sanjeet Aujla cited an inflection point in growth, margins and cash returns as a catalyst. “Over the next 12m, ABI is at the cusp of delivering the ideal consumer staples growth profile, which it has never consistently achieved since pre-2008; namely consistent volume growth (1.5-2%), whilst pricing in line with inflation, with margin expansion, strong cash conversion, and ND/EBITDA < 3x," he wrote. Specifically, Aujla believes that margin upside could come from the company's cost-saving measures. Volume growth will also lead to earnings and cash upside for the stock. U.S.-listed shares popped more than 2% in the premarket following the upgrade. Year to date, they are down 8.6%. BUD 1D mountain BUD pops — Lisa Kailai Han 5:48 a.m.: Micron is a top pick at Citi Citi called Micron Technology a top pick ahead of the chipmaker's earnings report due Wednesday. Analyst Christopher Danely raised his price target to $175 from $150 representing 25% upside. Micron has already climbed nearly 64% this year. Going forward, Danely expects the stock to trade "above its historical average but below AI peers," he wrote. "We believe Micron should continue to trade at a premium to its historical range given AI exposure." As a catalyst, the analyst pointed to Micron's fiscal third-quarter earnings results, due on June 26 after the market closes. Danely thinks the company could post both an earnings and revenue beat due to higher dynamic random-access memory pricing. Specifically, the analyst estimated earnings of 36 cents per share on revenue of $6.80 billion, which would come above the current consensus of 30 cents on revenue of $6.64 billion. Additionally, Danely predicted that the company could guide for its fiscal fourth-quarter revenue at $8 billion, above the current consensus estimate of $7.58 billion. — Lisa Kailai Han 5:48 a.m.: Goldman Sachs initiates IBM as a buy Dow Jones Industrial Average member IBM is primed for strong gains ahead, according to Goldman Sachs. Analyst James Schneider initiated the legacy tech giant with a buy rating. His $200 price target implies upside of 16% from Friday's close. Shares were up 1% in the premarket. "IBM is a diversified provider of software, IT services, and enterprise hardware to global enterprise customers. We believe that IBM is in the middle innings of pivoting its portfolio to a suite of modernized application and infrastructure software and a broader array of services, away from a legacy-focused portfolio," Schneider wrote. "We think the company is on track to sustain 5% - 7% long-term revenue growth and ~10% FCF growth, driven by growth in AI products and services, market share gains in consulting, and growth in its core software portfolio," he added. Shares are up more than 5% for the year, outperforming the Dow. However, they lag the S & P 500's 14.6% surge for 2024. IBM YTD mountain — Fred Imbert
Monday’s analyst calls: Micron a top pick, Goldman says buy IBM shares
Jun 24, 2024
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