Thursday's analyst calls: Nvidia gets a price target hike, health care stock primed for big gains ahead

Published Thu, Feb 15 20245:34 AM ESTUpdated Thu, Feb 15 202412:34 PM EST

(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 major crypto stock along with a health care name were in focus among Thursday's analyst calls. JPMorgan upgraded Coinbase to neutral, noting the trading platform will get a boost from higher crypto prices. Elsewhere, HSBC initiated coverage of GE Healthcare with a buy rating, citing in part the company's artificial intelligence ambitions. Meanwhile, Piper Sandler raised its price target on Nvidia , calling for even more gains for the high-flying chipmaker. Check out the latest calls and chatter below. All times ET. 7:57 a.m.: Northland moves to sidelines on Twilio after earnings Northland turned less bullish on Twilio following its last earnings report. Analyst Michael Latimore downgraded the cloud stock to market perform, while keeping his $66 price target unchanged. That target implies shares will slip 8.7% from Wednesday's closing price. Latimore's downgrade comes after Twilio offered weak current-quarter revenue guidance on Wednesday, overshadowing better-than-expected financial results for the fourth quarter. Shares dropped more than 11% before the bell on Thursday. "We see Twilio maintaining or growing margins given its leadership position, but expect modest growth," Latimore said. Latimore noted Twilio's operational review of its underperforming segment business unit. He warned that a sale of the unit could hurt the company's artificial intelligence strategy. Shares have fallen more than 4% in 2024, reversing course after rallying 55% last year. — Alex Harring 7:33 a.m.: Bank of America becomes extremely bullish on Super Micro Computer Bank of America sees much more rallying ahead for Super Micro Computer despite many on Wall Street forecasting a pullback. Analyst Ruplu Bhattacharya initiated coverage of the stock with a buy rating and price target at $1,040 per share, the highest of all Wall Street analysts polled by LSEG. His target reflects the potential for shares to add another 18.1% from Wednesday's close. Bhattacharya said a key argument for his uniquely strong bullishness is that the impact of artificial intelligence on the company hasn't been fully appreciated by investors. He not only pointed to Super Micro Computer already being an early launch partner for giants such as Nvidia, AMD and Intel, but said the company has the potential to support more rollouts as processors continue debuting in the coming years. "We think this provider of server and storage solutions will be a beneficiary of AI-driven demand growth," he told clients. "We believe the market for AI servers is much larger than is factored in Street models." Bhattacharya's call follows a strong period for the stock. Shares have already more than tripled in value in 2024 after soaring more than 245% in 2023. The stock added 4.5% in Thursday's premarket alone. To be sure, the average analyst expects a correction ahead. The typical price target of analysts surveyed by LSEG is $617.07, which implies the stock sliding almost 30%. — Alex Harring 7:25 a.m.: Rocket Lab remains a top pick in space, says Deutsche 2024 will be a transitional year for the space industry — and Rocket Lab is positioned for strong growth acceleration, according to Deutsche Bank. Unlike satellite companies which face structural cross currents this year, Rocket Lab has limited competition risk — in effect, its success is "almost entirely determined by execution," analyst Edison Yu wrote in a Thursday note. Yu reiterated the company as a top pick in the firm's space coverage, as well as the $10 price target on shares. That implies shares soaring 125.4% from Wednesday's close. "After raising $300m this month via [convertible senior notes], we believe the company further solidifies its already top-tier position, enabling wins for even larger satellite programs than the recent +$500m [Space Development Agency] award and more ambitious scaling up of the new Neutron rocket," Yu said. The analyst forecasts Rocket Lab's sales growth surging to more than 65%, or four times higher than its growth rate in 2023. — Hakyung Kim 7:13 a.m.: Safehold can rally 24% despite difficult commercial real estate market: BofA Safehold is a stable pick, even as the commercial real estate industry flounders, according to Bank of America. Analyst Derek Hewett reiterated his buy rating following the real estate investment trust's earnings report, while raising his price target by $1 to $25. Hewett's new price target implies shares can add 24% from where they finished Wednesday. His call comes after Safehold beat Wall Street expectations when reporting fourth-quarter earnings on Monday. Per-share earnings came in 1 cent higher than the consensus forecast of analysts polled by FactSet at 36 cents, excluding items. Safehold saw $103 million in revenue, topping the $84.9 million expected. More broadly, Hewett said Safehold should be able to grow even as the commercial real estate industry, known in short as CRE, struggles. "Despite the earnings beat, CRE transaction volume remains weak given the significant rise in short term rates last year and expectations of a 'higher-for-longer' rate environment in the near term," he said. "That said, we think SAFE is well positioned to scale the business over time and that ground leases represent an attractive opportunity given the long-term nature of the cash flows plus capital appreciation." Safehold shares have dropped more than 13% so far this year, adding to 2023's loss of more than 15%. — Alex Harring 7:01 a.m.: Ulta has more steam in its rally, Oppenheimer says Oppenheimer sees more upside ahead for top-pick Ulta . After the beauty stock smashed through analyst Rupesh Parikh's prior price target of $525, he raised it to $600, now implying shares can gain another 13.9%. Parikh kept his outperform rating on the stock. "We see the potential for further multiple expansion from here as comps re-accelerate," he wrote to clients when raising the target Thursday. "ULTA remains a top pick for us." Parikh said Ulta should see re-acceleration while operating margins bottom. He also noted that shares are currently at a discounted valuation, a positive outlier as he sees many high quality names above their respective historical averages. Ulta has climbed 7.5% so far in the new trading year. That comes after the stock added 4.5% in 2023, meaning it underperformed the broader market. — Alex Harring 6:46 a.m.: HSBC sees Snowflake pulling back after rally Snowflake's good news has already been priced in with a recent rally, according to HSBC. Analyst Stephen Bersey downgraded the cloud stock to hold from buy while raising his price target by $2 to $214 to reflect higher earnings. Still, Bersey's new target implies shares will slide 9.3% in the next 12 months from Wednesday's closing price. "We believe the stock no longer offers an attractive risk-reward trade off," Bersey said, also noting the move comes after a "strong rally." Bersey said he went with hold instead of reduce because of the company's strong earnings momentum, adding that it should benefit from rising use of artificial intelligence. But he said the stock can be hurt if peers prove to be more competitive than expected or the macroeconomy or stock market is weaker than anticipated. Snowflake shares are up more than 18% this year, extending last year's climb of more than 38%. But shares fell 1.1% in Thursday premarket trading following the downgrade. SNOW YTD mountain SNOW in 2024 — Alex Harring 6:31 a.m.: Bernstein sees correction ahead for Arm despite solid earnings report Bernstein expects less of a sell-off ahead for Arm after its strong earnings report. Analyst Sara Russo upped her price target by $26 to $72, now implying a smaller downside of 43%. Russo kept her underperform rating on the semiconductor stock. Her call comes after Arm, which went public in September, issued strong quarterly earnings and guidance that sent shares flying last week. The stock is up nearly 79% since February began. To be sure, that move may also be driven by a short squeeze in the shares. "Q3 results were strong, guidance for FY24 was raised, and we are now more convinced in the increasing royalty rate story based on v9 penetration," Russo said. "However, we can't get to the current valuation levels even with increased estimates." Looking ahead, she said next quarter's results will be worth watching for more information on market share and royalty rates. Shares climbed more than 3% before the bell on Thursday. — Alex Harring 6:14 a.m.: Skechers is a good stock as consumers trade down, Evercore ISI says Skechers shares have caught the eye of Evercore ISI as consumers look for cheap shoes. Analyst Jesalyn Wong initiated coverage of the shoemaker with an outperform rating and $73 target price. Wong's target reflects the potential for shares to climb 22.4% from Wednesday's close. "In-depth Conversations with Chinese Distributors suggest tremendous amount of growth for SKX, particularly at lower price points as consumer are trading down," Wong told clients. Wong said the company has a broad product offering and lower pricing compared with peers that can help in an environment where consumers are increasingly focused on value. The analyst also said that improving brand momentum and increased awareness among younger buyers should help expand the total addressable market. Given this backdrop, Wong said to expect a compound annual growth rate of 11% between 2023 and 2026 to the topline. A return to growth for the wholesale channel, as well as boosts from easing costs and fewer store openings should help the longer-term margin rise to 12.6% by the end of 2026, she added. Skechers shares have slipped more than 4% in 2024, giving up some gains after rallying more than 48% the prior year. — Alex Harring 6:05 a.m.: Macquarie moves to sidelines on Sony There's reasons for pause on Sony , Macquarie warned. Analyst Damian Thong downgraded the conglomerate's stock to neutral from outperform. He does not have a price target for U.S.-traded shares. Thong noted the lackluster guidance for the full 2023 and 2025 years and the stock's price sitting near his target as justification for the downgrade. Sony should also face growing structural challenges in the games business that can drag profit growth below expectations, the analyst said. "We recommend a cautious stance at the current share-price level after the rise since mid-2022," he wrote to clients. "We believe market expectations regarding games business profits are too high, and image sensor profitability may be vulnerable to yen appreciation." On the other hand, Thong said he approved of the planned spin-off of the financial services business and expected deconsolidation planned for 2024. These would be a reversal of sorts from the company's 2020 merger, he added. Sony's U.S.-listed shares have struggled in 2024, shedding more than 3% despite the broader market rise. But the stock performed nearly in line with the market in 2023, rallying more than 24%. — Alex Harring 5:52 a.m.: Buy Eastman with growth inflection point on horizon, Redburn Atlantic says Investors should snap up shares of Eastman Chemical as an unusual turn in earnings growth nears, Redburn Atlantic recommended. Analyst Colin Isaac initiated coverage of the American chemical stock with a buy rating. His $110 price target implies shares can rally about 34% over the next year from Wednesday's close. "After a decade of stagnant earnings that has hindered stock performance, we believe Eastman is poised for multi-year growth," Isaac told clients. "With the shares at a ten-year relative low, this outlook is not yet discounted, presenting a compelling risk/reward profile." An "unprecedented" level of customer destocking in 2023 that significantly hurt EBITDA should reverse as conditions normalize this year, he said. Meanwhile, Isaac said a $2.5-billion investment in polyester recycling should help drive growth and returns, while helping the stock re-rate and reduce its cyclicality. The call comes amid a bout of underperformance for the stock. Shares have dropped more than 8% in 2024 after gaining just over 10% in 2023. By comparison, the S & P 500 has climbed more than 4% this year and 24% last year. — Alex Harring 5:39 a.m.: Piper Sandler grows increasingly excited about Nvidia as earnings report nears Piper Sandler is getting increasingly bullish heading into Nvidia's earnings. Analyst Harsh Kumar hiked his price target by $230 to $850, now implying upside of 15% from Wednesday's close. Kumar kept his overweight rating on the stock. Nvidia, which is expected to release fourth-quarter earnings next week , sees more positive momentum to its tailwinds from accelerated compute and generative artificial intelligence, Kumar said. He added that large public cloud companies will continue spending through the year as more AI products roll out. An increase in supply will help the company work through its "extremely healthy backlog" for its data center portfolio, the analyst added. "In our view, the backlog support for the entire 2024 forecast is stellar," Kumar wrote to clients. "We continue to see NVDA as the only and hence premier full-stack accelerated compute provider and reiterate our top-large cap pick." Despite a modest pullback in Thursday's premarket, the stock is up more than 49% in the new year. That builds on 2023's monster rally, when shares soared more than 230% amid the AI boom. — Alex Harring 5:34 a.m.: JPMorgan turns neutral on Coinbase amid rising crypto prices JPMorgan turned less bearish on Coinbase as cryptocurrencies jump following the approval of bitcoin ETFs . Analyst Kenneth Worthington upgraded the crypto platform to neutral from underweight. However, his $80 price target implies a steep drop of 50.11% from Wednesday's close. "What was initially a sell-the-news event with the launch of U.S. Bitcoin spot ETFs, has now turned into meaningful Bitcoin price appreciation," he told clients. "In our opinion, we think this Bitcoin appreciation is contributing to better spot Bitcoin ETF flows, which is in turn driving Bitcoin prices higher, and pulling other tokens higher as well." Worthington pointed specifically to flows into these ETFs and the price appreciation of bitcoin and ethereum in recent days as reason for the upgrade. He also said crypto prices have more upside this quarter. Still, the analyst noted the "many" risks to the stock price, including valuation and if the ETFs become a competitor to Coinbase itself. Shares have rallied more than 7% before the bell Thursday. But the stock has lost more than 7% so far in 2024, giving up some gains after soaring more than 390% last year. — Alex Harring 5:34 a.m.: HSBC says buy GE Healthcare HSBC likes what it's seeing from GE Healthcare since the company was spun off from General Electric. The bank initiated coverage of the medical technology stock with a buy rating and a price target of $100 per share. That forecast calls for upside of more than 20%. GE Healthcare was spun off from General Electric early last year. Analyst Sezgi Oezener cited a large installed base relative to rivals along with artificial intelligence ambitions that "seem more focused than most peers." "The appointment of Taha Kass-Hout, previously VP of Machine Learning and Chief Medical Officer at Amazon (2017-23), as GEHC's Chief Science & Technology Officer over a year ago was a major step in the company's efforts to advance in the AI field," Oezener wrote. "Following the increased intensity of investment in the area, the company prides itself on having launched over 40 new innovations tied to its care pathways and digital strategy, while also topping the FDA's list of AI-Enabled Device Authorizations, with 58 more than any other peer." GE Healthcare shares have rallied more than 7% in 2024. They soared more than 32% last year. GEHC 1Y mountain GEHC in past year — Fred Imbert