(This is CNBC Pro’s live coverage of Thursday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A short-term home rental giant and an e-commerce platform were among the big names talked about by analysts on Thursday. Analysts reacted to Airbnb’s latest quarterly results, with some concerned about the company’s growth prospects. Elsewhere, JPM Securities upgraded Shopify after the stock’s worst day ever. Cheesecake Factory also got a rating increase from Raymond James. Check out the latest calls and chatter below. All times ET. 8:15 a.m.: Deutsche Bank upgrades Emerson Electric, says EPS estimates look poised for upward revisions It’s time for investors to put their trust in Emerson Electric, according to Deutsche Bank Analyst Nicole DeBlase upgraded the industrial technology company to a buy rating, saying that shares should benefit from ongoing strength within the process automation market, upward EPS revisions and a multiple reset. “We have had our eye on EMR stock for several quarters now, but were nervous about execution amidst ongoing discrete automation/test & measurement market weakness and potential AZPN … mishaps,” she wrote. “However, we have now been impressed by the company’s robust operational performance for two quarters in a row, and expect this beat/raise track record to continue in the coming quarters.” Underpinning the upgrade is a bet that the company will continue to see positive EPS momentum, with the firm’s viewing current 2025 EPS estimates that sit 4% above consensus as “conservative.” The stock also trades at a 12% discount to the median of its peer group. Given this outlook, DeBlase lifted her price target to $138 from $123 a share, reflecting nearly 23% upside from Wednesday’s close. Shares have added nearly 16% this year and rose about 1% before the bell. – Samantha Subin 7:54 a.m.: Wolfe Research downgrades Skyworks Solutions Investors hunting for a rebound candidate after earnings season can look past Skyworks Solutions , according to Wolfe Research. Analyst Chris Caso downgraded the stock to peer perform from outperform, saying that the company needs a breakthrough from Apple in order to find more upside. “We think the main potential driver of SWKS revenue outperformance would be AAPL finally launching their internal modem, and we simply don’t have confidence in that outcome,” the note said. Shares of the semiconductor company are down about 13% since April 30, when Skyworks reported a decline in net revenue for its fiscal second quarter. — Jesse Pound 7:29 a.m.: Deutsche initiates Barclays with a buy U.K.-based banking giant Barclays has promising cash flow potential combined with an attractive valuation, according to Deutsche Bank. Analyst Jonathan Pierce initiated coverage on Barclays U.K.-traded shares with a buy rating. His price target of £270 implies around 30% upside from Wednesday’s close. U.S.-traded shares of Barclays are up 36% in 2024 and last closed at $10.72. “Barclays expects to generate a [return on tangible equity] of > 10% in FY24 and > 12% in 2026. With very few capital drags between accounting earnings and ET1 generation, this would mean a cash flow yield above 20% moving forwards,” Pierce wrote in a Thursday note. “While we do not expect Barclays to generate this level of ROTE, anything close to this will result in very significant distribution potential in the medium term,” he added. — Hakyung Kim 7:06 a.m.: Jefferies bullish on Sunrun after earnings Clean energy company Sunrun’s first-quarter results show that the company is “prioritizing margins over volumes,” says Jefferies. The firm is confident that Sunrun will take advantage of residential solar market growth following a rocky 2023. Analyst Dushyant Ailani reiterated his buy rating on shares. While he pulled back his price target to $26 from $32, the new target still indicates shares surging 126% from Wednesday’s close. Sunrun’s storage attachment rates jumped to around 45% in the fourth quarter from about 15% in the first quarter of 2023, per Ailani. To be sure, Ailani said “we expect some pushback on the lower solar installation guide which is expected to be down 15% to flat, vs prior guide of +/-5%.” Shares were down more than 2% Thursday during premarket trading. — Hakyung Kim 6:48 a.m.: Bank of America upgrades Fox to buy Media company Fox should benefit from the 2024 election cycle and major sport events, per Bank of America. Analyst Jessica Reif Ehrlich upgraded shares to buy from neutral. She also lifted her price target to $40 from $34, implying 20.6% room for upside from Wednesday’s close. “In our view, FY24 was set to be a challenging year given the extremely difficult comparisons to FY23. … Fox Is now well-positioned to accelerate earnings in FY25,” she wrote in a Thursday note. Fox’s fiscal third quarter results came above Rief Ehrlich’s expectations, which she noted were encouraging “amid a difficult linear advertising environment.” The company posted its quarterly numbers on Wednesday. Fox shares were up more than 1% in the premarket. — Hakyung Kim 6:33 a.m.: D.A. Davidson downgrades TripAdvisor on slower-than-expected recovery Don’t expect a prompt recovery from TripAdvisor , according to D.A. Davidson. Analyst Tom White downgraded the stock to neutral from buy following the company’s quarterly results. While Tripadvisor posted an earnings beat and in-line revenues, shares declined around 29% after the company announced there are no chances of a sale at this time — which investors had viewed as a near-term catalyst. “The bottom line is that, while The Fork and (particularly) Viator remain interesting assets with significant long-term growth potential, TRIP’s efforts to transform how it monetizes its core Brand TripAdvisor segment (104% of consolidated EBITDA in CY’23) looks like it’s going to take longer than we’d originally hoped,” White wrote in a Wednesday note. The Fork and Viator are Tripadvisor’s other brand segments. Updates to Google’s travel search engine results page also impacted SEO rankings, which management forecasts will result in lower revenue growth than previously expected. Shares are down 15.6% in 2024. CAKE YTD mountain CAKE year to date — Hakyung Kim 5:59 a.m.: Cheesecake Factory has an attractive valuation, says Raymond James Cheesecake Factory stands out as an outperformer relative to its peers, according to Raymond James. The firm upgraded the restaurant chain to outperform from market perform . It reiterated its $42 price target on shares, indicating 23.6% upside from Wednesday’s close. The company’s recent first-quarter results showed “encouraging comp resilience and strong relative outperformance in a softening industry backdrop,” wrote analyst Brian Vaccaro. Although Cheesecake Factory’s growth brands’ store margins are still lower than unit economic targets, Vaccaro thinks there’s potential for improvement throughout 2024 as prices catch up to inflation. This could help some investors reassess the company’s longer-term revenue growth, he added. Vaccaro projects 7% to 8% annual revenue growth. “With these dynamics improving, we see upside to the stock’s low valuation (P/E ~11x), and would also note the stock’s elevated short interest at ~15% of the float,” Vaccaro said. Cheesecake Factory shares have lagged the broader market this year, losing 3%, while the S & P 500 is up more than 8%. — Hakyung Kim 5:50 a.m.: JMP upgrades Shopify It’s time to buy the dip on Shopify , according to JMP Securities. Analyst Andrew Boone upgraded the e-commerce platform to market outperform from market perform. His price target of $80 implies upside of 27.5% from Wednesday’s close. Shopify is coming off its worst day ever, losing more than 18% on the back of weaker-than-expected guidance for the second quarter. SHOP 5D mountain SHOP 5-day chart Still, “our upgrade is driven by the potential for new merchant cohorts to contribute in 2025 and beyond, Plus subscription price increases coming on in 2H24, and our belief that the company remains a best-in-class eCommerce platform that is taking share and has multiple adjacencies across financial services, advertising, and merchant services,” Boone said. Shares were up 1% in the premarket. — Fred Imbert 5:50 a.m.: Wall Street on the sidelines for Airbnb Airbnb’s weaker-than-expected forward guidance has analysts worried about the company’s growth outlook. While Airbnb managed to beat on the top and bottom line in the first quarter, its revenue forecast for the second quarter was below consensus estimates. The company said revenue will come in between $2.68 billion and $2.74 billion, while analysts polled by LSEG were expecting $2.74 billion for the period. Shares were down more than 7% Thursday premarket following the results. “While ABNB remains a unique travel company, we … see this steady room night deceleration becoming a headwind to the multiple investors are willing to pay for the company… especially as forward EBITDA/FCF growth is likely to be more predicated on ADRs, take rate, and new product extensions (with inherently higher execution risk),” Morgan Stanley analyst Brian Nowak wrote. Nowak reiterated his underweight rating and $120 price target on shares, implying 17% downside from Wednesday’s close. Bank of America’s Justin Post maintained his neutral rating after the quarterly results. The company’s disappointing second quarter outlook is “consistent with [a] slowing travel sector in 2024,” Post said in a note. Post pulled back his price target by $8 to $160, just 1.3% above where shares closed on Wednesday. He cited concern around the broader demand environment for travel and the company’s margin trajectory as possible headwinds. “Whether management’s initial FY24 Adj EBITDA margin guidance of at least 35% turns out to be conservative will be an important indicator of forward margin trajectory in the coming years, in our view,” Post said in a Thursday research note. Goldman Sachs is more bearish on Airbnb. The firm holds a sell rating on the stock. Meanwhile, analyst Eric Sheridan moved his price target slightly higher to $130 from $123, suggesting around 18% downside. — Hakyung Kim
Thursday’s analyst calls: Airbnb earnings reaction, e-commerce stock gets upgrade after big sell-off
May 9, 2024
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