Tuesday's analyst calls: Big Nvidia price target increase, pharma giant gets an upgrade

Published Tue, Feb 13 20245:47 AM ESTUpdated Tue, Feb 13 20248:52 AM EST

(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 tech giant and a major pharmaceutical company were among the biggest analyst calls Tuesday. UBS hiked its price target on Nvidia , citing an attractive valuation and strong demand for its chips. Elsewhere, Citi upgraded shares of GSK, citing several "commercial and pipeline 'wins.'" Check out the latest calls and chatter below. All times ET. 8:16 a.m.: Bank of America downgrades wine seller The Duckhorn Portfolio Investors might want to stay away from wine company The Duckhorn Portfolio, according to Bank of America. "We downgrade Duckhorn shares to underperform to reflect further softening of the premium wine segment," analyst Peter Galbo wrote in a Tuesday note. "Premium Wine ($15+/bottle) fundamentals slowed further in December, with a slight rebound in January…until such time that a sales re-acceleration occurs, we believe shares are likely to be relative underperformers." Galbo cut his price target by $3 to $8, suggesting shares could decline roughly 12% over the next year. The stock has fallen 7.6% in the new year. While the analyst said Duckhorn's stock should trade at a premium compared to former public wine companies, such as VinCorp and Golden State Vitners, he recognized the company's slowing topline. Upside could come from the company's new sauvignon blanc launch in fiscal year 2024, and if consumer spending strengthens business for higher-end wines, he said. — Pia Singh 7:50 a.m.: Evercore ISI initiates NextEra at outperform The tide is turning around beleaguered stock NextEra Energy , according to Evercore ISI. The firm initiated coverage with an outperform rating and $43 price target, which suggests shares rallying 47% from Monday's close. Shares are down 3.8% in 2024 and more than 50% over the last 12 months. NextEra Energy entered a convertible equity portfolio financing (CEPF), which has made the stock dependent on stable capital markets. However, high interest rates and concerns regarding CEPF "drove an unattractive cost of capital," said Evercore ISI. The renewable energy company's simplification strategy should help lower capital costs and help the company reach its 6% distribution growth target, according to analyst Michael Lonegan. "Investors may take time to regain confidence in NEP, but we expect that to come with execution of its simplified strategy and a consequent reduction in its cost of capital, provided interest rates do not rise materially," Lonegan wrote in a Tuesday note. — Hakyung Kim 7:39 a.m.: Evercore ISI moves off sidelines on Equifax, sees upside of more than 20% Evercore ISI turned bullish on Equifax on expectations for future earnings upside. Analyst David Togut upgraded shares of the credit report provider to outperform from in line and raised his price target by $100 to $310. Togut's new target implies shares can rally 21.2% over Monday's close. "This year, we see headwinds abating, underscored by a trough and potential rebound in mortgage inquiries as interest rates likely decline and the employment picture remains stable," Togut wrote in a Tuesday note to clients. "For 2025, such should provide a launchpad for best-in-class revenue growth potential combined with substantial, 270bps of estimated EBITDA margin expansion potential." In this landscape, Togut said the company could see per-share earnings growth 3% above consensus expectations in 2025. He also pointed to several significant opportunities to drive revenue beyond a mortgage rebound. These include: A "near-monopoly" in the income and employment verification business. New product innovation and increased penetration within the identification and fraud protection businesses. A rebound in Australia and Europe in 2025, which will add to strength in Latin America. Shares rose about 0.6% before the bell on Tuesday. The stock is up over 3% in 2024, underperforming the broader market. — Alex Harring 7:30 a.m.: Redburn says United Airlines has few growth catalysts left, downgrades stock Redburn Atlantic downgraded United Airlines to neutral from buy with a $50 price target, implying just above 16% potential upside for the stock. While United trades at "optically cheap valuation levels," the firm's estimates and expectations of negative free cash flow over the next two years affords few catalysts for the stock, analyst James Goodall said in a Tuesday note. He attributed his cautious view to the airline's long-haul supply and inflationary pressures over the last year, saying he expects earnings to come out below consensus given higher pricing. "With all airlines expecting a strong recovery in pricing through the year in most markets, including domestic, we worry this will limit much capacity rationalizing into the summer months and with current schedules pointing to expanding capacity ultimately, like for other network airlines, we model negative pricing for United in 2024," Goodall wrote. Shares were down 0.7% after the downgrade. Year to date, United is up 4.3%. UAL YTD mountain UAL in 2024 — Pia Singh 6:51 a.m.: Children's Place slides after B. Riley Securities downgrades shares to sell Children's Place is in a 'cycle of distress,' according to B. Riley Securities, which warned that the stock has a highly unfavorable risk/reward scenario that investors should stay away from. Analyst Jeff Lick downgraded the children's apparel retailer from neutral to sell and slashed his price target by $15 to $4, suggesting shares could fall more than 75%. The stock slid 11.9% in premarket trading. According to Lick, Children's Place likely needs between $50 million and $75 million in funding to run the business with proper inventory and resource levels. His price target assumes the company will generate $77 million EBITDA in fiscal 2024 and raise $50 million of incremental capital, but that the chance of these scenarios happening is at 33% and 50%. "The best-case scenario, in our view, is Amazon providing PLCE some type of very favorable deal or accommodation. In that instance, we estimate PLCE's shares could reach $19 in 2024 and $39 in 2025. We put less than a 10% chance of an AMZN deal," Lick wrote in a Tuesday note. — Pia Singh 6:29 a.m.: Piper Sandler upgrades Trimble to overweight Technology solutions provider Trimble has several growth catalysts ahead, according to Piper Sandler. The firm upgraded shares to overweight from neutral and upped its target price by $17 to $68, which implies 24.3% potential upside. Shares are up 2.8% so far this year. TRMB YTD mountain TRMB year to date "TRMB could at last be in a place where a software-centric bull case could emerge where recurring revenue rises beyond 55% of mix, growing double-digits organically, capable of delivering mid-teens EBIT growth," analyst Clarke Jeffries said in a Monday note. He noted the company's fourth-quarter revenue and profitability beats, positive guidance for fiscal year 2024, its $1.1 billion debt paydown and up to $800 million worth of share repurchases this year as catalysts for the stock. — Pia Singh 6:04 a.m.: Benchmark initiates coverage of Block with a buy rating Financial technology giant Block is on track to achieve sustained profitability, according to Investment banking and research firm Benchmark. Analyst Mark Palmer initiated coverage of Block with a buy rating and $89 price target, which suggests shares could gain more than 29% over the next year. "While shares of SQ have rallied sharply during the past two three months, we believe the stock's upward price momentum is likely to continue thanks in large part to management's enhanced focus on profitability," Palmer wrote in a Monday note. The stock is down 11% for the year so far, but has gained about 3.6% in the past month after Block announced hundreds of layoffs in late January. Its CEO is aiming to cut 1,000 jobs by the end of this year. According to Palmer, the company's cost-cutting efforts should allow Block to achieve higher adjusted operating margins by 2026 and an expanded stock multiple. The stock's price-to-forward sales ratio "fails to reflect the growth prospects of its Cash App and Square ecosystems," he added. — Pia Singh 5:47: a.m.: Citi upgrades GSK, says pharma giant is finally in a 'stronger position' Biopharma company GSK is in an attractive spot after recently successful data of one of its therapies, according to Citi analyst Andrew Baum. He upgraded shares to buy from neutral and increased his price target from £17 to £21. U.S.-listed shares of GSK have gained 10.8% this year. "GSK's recent commercial and pipeline 'wins' put GSK in a stronger position to attract both external talent and pipeline assets," Baum wrote in a Tuesday note. According to Baum, his new rating is primarily based on the under-appreciated revenue potential of GSK's Blenrep, a medication for adult patients with relapsed and refractory multiple myeloma. He pointed to DREAMM-7 data released on Feb. 5, which showed substantial reduction in risk of disease progression or death in patients with Blenrep. The therapy could generate £2.5 billion in revenue as a "new standard of care," Baum said. The analyst also increased his earnings per share forecasts up to 50%, reflecting peak Blenrep revenue numbers and GSK's anticipated share of the RSV market, among other catalysts. — Pia Singh 5:47 a.m.: UBS hikes Nvidia price target UBS is getting even more bullish on Nvidia ahead of the chipmaker's fiscal fourth-quarter earnings report. The bank hiked its price target on the stock to $850 from $580. The new forecast implies upside of 17.6% from Monday's close. "Customer discussions confirm NVDA's lead times have come in substantially over the past few months (now ~3-4 mos), meaning shipment slots are still available in C2H:24," wrote analyst Timothy Arcuri. "Normally, this is bad, but demand for AI compute capacity is still so strong, in the near term, we think this just points to significant upside potential to shipments/revenue, such that we think NVDA beats on data center by ~$2.5-3B." Nividia, which is slated to report fiscal fourth-quarter earnings next week, has been on a tear in 2024, gaining nearly 46%. That's on top of the stock's 238.9% surge in 2023. Despite these gains, Arcuri said Nvidia's forward price-to-earnings ratio is toward "low-end of where NVDA has historically traded." Despite the price target increase, Nvidia shares were down 1% in the premarket. — Fred Imbert