(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.) An online forum stock and a beauty giant were highlighted by analysts to start the week. Morgan Stanley began coverage of Reddit with an equal weight rating. Meanwhile, Canaccord Genuity initiated Coty with a buy rating and a price target that implied more than 30% upside. Check out the latest calls and chatter below. All times ET. 8:34 a.m.: Bank of America upgrades Cisco, says shares could rally 24% Bank of America sees growth acceleration ahead for Cisco. Analyst Tal Liani upgraded the stock to buy from neutral on Monday and raised his price target by $5 to $60 per share, suggesting nearly 24% upside from Friday’s close. Among the catalysts is Cisco’s share gains in ethernet-based artificial intelligence build outs of hyperscalers, he wrote in a note to clients. Firewall stabilization and new product launches will help its security business and the acquisition of Splunk will provide great growth synergies, he added. “While the next two quarters may remain pressured, we believe this weakness is fully reflected in Street expectations and management guidance is adequately conservative,” Liani said. Shares were up nearly 2% in premarket trading. — Michelle Fox 8:23 a.m.: Mizuho initiates GE Vernova with a buy rating GE Vernova’s leadership in energy services gives the company a greater edge than investors are anticipating, according to Mizuho. Analyst Maheep Mandloi initiated coverage of GE Vernova with a buy rating, saying the company will get a boost from its diversified businesses in gas, in wind, as well as in grid services. “We favor GEV as it benefits from leadership in the gas power business that generates recurring and increasing cash flow, margin expansion in wind due to pricing power and an unprofitable offshore backlog ending by 2026, and its strong presence in grid services and electrification,” Mandloi wrote on Monday. “We expect the company to approach a 10% Adj EBITDA margin exiting 2026 (vs 1.7% in 2023), much earlier than guidance of 2028,” Mandloi added. GE Vernova only started trading on the NYSE in April after it was spun off from General Electric; the energy services company said it helps generate roughly 30% of the world’s electricity. The stock is down 2% this month. But the analyst’s $154 price target implies roughly 15% upside for the stock from Friday’s close of $134. — Sarah Min 7:10 a.m.: Citi raises Meta Platforms price target Citi said top pick Meta Platforms will continue to benefit as the advertising backdrop improves. “With Meta’s newer ad innovations (Adv.+ Creative, Reminder Ads, longer form Reels, etc.), a new AI video architecture, and greater overall advertiser adoption, we believe advertiser demand for Reels (and Meta) continues to improve,” analyst Ronald Josey said. The firm reiterated a buy rating on the Facebook parent-company and raises its price target to $590 from $525. Citi’s forecast equates to more than 15% upside from Friday’s close. “Bigger picture, we believe Meta is benefiting from greater engagement and Reels ad load and launching newer ad formats & features (including Adv.+ Creative & Catalog updates, Reminder Ads, and longer Reels) as our checks suggest advertisers increasingly utilize Reels and its lo-fi video ads for campaigns,” the analyst added. Meta stock has gained nearly 45% in 2024. — Brian Evans 6:53 a.m.: Barclays initiates Cava as equal weight Barclays likes Cava’s “highly efficient” business model and strong fundamentals but thinks its valuation may have gotten ahead of itself. The firm initiated coverage of the restaurant chain stock with an equal weight rating and a $58 per share price target. Barclays’ forecast calls for 9% downside moving forward from Friday’s close. “CAVA’s revenue growth is industry leading, culminating in long-term annual guidance for high teens growth, supported by 15%+ unit & low-to-mid-single-digit comp growth, both proving conservative to date,” analyst Jeffrey A. Bernstein said. “Industry-leading top & bottom-line growth justifies an outsized valuation, in our view, though challenging to define the appropriate multiple when the brand leads on many fundamental metrics,” he added. Cava Group has climbed more than 48% in 2024. — Brian Evans 6:47 a.m.: Citi opens positive catalyst watch on Nvidia Citi thinks Nvidia is poised to tick higher heading into quarterly results and the Computex Taiwan event on June 2. The firm opened a positive catalyst watch on the chipmaker in a Monday note. Citi reiterated a $1,030 price target alongside a buy rating. Citi’s forecast equates to nearly 17% upside from Friday’s $881.86 close. Nvidia stock has surged more than 78% in 2024. “We expect supply chain commentary from key foundry/HBM memory suppliers during earnings and Computex Taiwan on June 2nd where NVIDIA CEO Jensen Huang will deliver a keynote which could be positive catalysts for the stock,” analyst Atif Malik said. — Brian Evans 6:38 a.m.: Barclays expects Microsoft’s Azure to post better-than-expected growth in the third quarter Barclays expects Microsoft to beat a “conservative” 28% growth forecast for its Azure segment heading into third-quarter results on April 25. The firm reiterated an overweight rating with a $475 per share price target. Barclays’ forecast implies nearly 13% upside from Friday’s $421.90 close. “Given that this was the heaviest period of optimizations for businesses, we see an upside scenario similar to prior quarters,” analyst Raimo Lenschow said. “Results here, coupled with further commentary around AI momentum in both Azure and Office, should be enough to send shares higher, in our view,” he added. “[W]e are in the camp that greater spend here is indicative of continued high demand, and further cements MSFT as the leader in GenAI adoption amongst enterprise software.” Microsoft shares are up 12.2% year to date. MSFT YTD mountain MSFT year to date — Brian Evans 6:23 a.m.: Stifel upgrades Masimo Stifel thinks Masimo has a multitude of positive catalysts that can boost growth for the stock moving forward. The firm upgraded shares of the health technology company to buy from hold in a Sunday note and increased its target price to $178 from $140. Stifel’s forecast implies 29% upside from Friday’s close. “The clear-and-unambiguous Healthcare (~65% of sales) business improvement, meaningful gross margin expansion opportunity from already-underway cost reduction initiatives … leave us believing the stage is set positively for MASI to return to the largely-predictable, high-single-digit growth and steady margin expansion trajectory that investors have long admired,” analyst Rick Wise said. “With positive fundamental, strategic, and controversy-diminishing progress continuing and more to come, we think the stock has room for further share price appreciation,” he added. Masimo has added roughly 18% in 2024. MASI YTD mountain MASI year to date — Brian Evans 6:02 a.m.: Morgan Stanley downgrades Logitech Morgan Stanley is moving to the sidelines on Logitech thanks to a lower-than-expected annual revenue growth outlook. The firm downgraded the computer peripherals maker to underweight from equal weight and lowered its price target to $75 per share from $85. Morgan Stanley’s forecast implies more than 13% downside from Friday’s close. Logitech has pulled back nearly 9% in 2024. On Monday, shares slipped more than 2% in the premarket. “Our deep dive into Logitech’s 3 key business segments suggests the market, and Consensus to a degree, is mis-pricing Logitech’s future growth algorithm,” analyst Erik Woodring said. “In fact, we forecast just 3% annual revenue growth through FY27, 200bps below Consensus at 5%, and 500-700bps below what appears to be priced into the stock today,” he added. — Brian Evans 5:44 a.m.: Morgan Stanley initiates Reddit as equal weight Morgan Stanley thinks Reddit is already trading at fair value despite being optimistic on the company over the long-term. The firm initiated coverage of the online forum stock with an equal weight rating and a $45 per share price target. Morgan Stanley’s forecast amounts to 6.4% upside from Friday’s close. Reddit has climbed more than 24% since going public in March at a debut price of $34 per share, which was the top range of analyst estimates. But Morgan Stanley’s Brian Nowak said that, while Reddit is a “unique” platform, he is somewhat cautious on the stock as the company needs to prove it can meaningfully grow both user and revenue growth. “In our view, it is still early in Reddit’s user growth story and in the near-term we see RDDT benefitting from growing top of funnel, deepening engagement by improving relevance and driving international user growth,” Nowak said. — Brian Evans 5:44 a.m.: Canaccord initiates Coty as buy A turnaround is in the cards for Coty , according to Canaccord Genuity. Analyst Susan Anderson initiated the beauty products company with a buy rating . Her price target of $14 implies upside of 33% from Friday’s close. “With management focused on investing and growing in fast-growing beauty categories, we believe Coty can outpace growth in the total market and has multiple levers to achieve this in the long term,” Anderson said. “Despite concerns around an overall slowdown in the beauty market in the U.S., we believe Coty can outperform due to significant whitespace growth opportunities, exposure to high-growth global beauty markets, and strong brands keeping consumers interested,” Anderson added. Coty shares have struggled in 2024, losing more than 15% in that time. COTY YTD mountain COTY year to date — Fred Imbert
Monday’s analyst calls: Reddit gains limited from here, beauty stock to surge 30%
Apr 22, 2024
