Tuesday's analyst calls: Carvana gets an upgrade, Coinbase momentum to continue?

Published Tue, Mar 12 20245:49 AM EDTUpdated Tue, Mar 12 20248:49 AM EDT

(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.) An online car seller and a crypto trading platform were in focus on Tuesday's analyst chatter. Carvana was upgraded to hold from underperform by Jefferies. Coinbase also got a rating increase to market perform from underperform by Raymond James. Check out the latest calls and chatter below. All times ET. 8:49 a.m.: Analysts boost price targets on Microstrategy as company buys more of the cryptocurrency Two firms raised their price targets Microstrategy Monday after the firm bought another 12,000 bitcoins amid a rally in the cryptocurrency's price, which hit a new record Monday. TD Cowen, which has an overweight rating on the stock, raised its price target on the shares to $1,560 from $1,220, implying about 5% upside from its closing price Monday. Canaccord Genuity raised its target on the stock to $1,810 from $975, implying about 21% upside. "This is not a short-term trading strategy but rather reflects mgmt's belief that bitcoin will ultimately prove a superior store of value," Cowen's Lance Vitanza said in a note Monday. "MSTR shares remain an attractive vehicle for investors looking to gain bitcoin exposure." Originally as an enterprise business software company, Microstrategy has been buying bitcoins and holding them on its balance sheet since 2020, and now calls itself a bitcoin development company. "MSTR's BTC acquisition strategy—only buying BTC when its stock trades at a relative premium to its HODL—has been accretive; and we believe that investors are learning to appreciate that this type of HODL accretion can continue using both equity and debt," said Canaccord's Joseph Vafi. "We have seen no other corporates emerge as competitors for investor dollars. Thus, in our view, MSTR has what is becoming a proven strategy to drive outsized shareholder returns, and it has no direct competition," he added." — Tanaya Macheel 8:12 a.m.: The Apple selloff is looking 'rather overdone,' Evercore ISI says The sell-off in Apple is starting to look overdone, according to Evercore ISI. Analyst Amit Daryanani is sticking with his outperform rating on Apple, saying the iPhone maker is now oversold after its decline this year. While the S & P 500 has gained more than 7% this year, the iPhone maker has slid more than 10%. That's driven in part by investor interest in more artificial intelligence-driven names such as Nvidia, as well as concerns around weak China demand. "Net/Net – We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%," Daryanani wrote in a Monday note. In fact, the analyst said there are three drivers that can "unlock upside" for the stock, including its approach to capital allocation, AI and its services business. In terms of capital allocation, Daryanani said he suspects Apple will take on debt to sustain, or accelerate, its buyback program. The analyst expects Apple will incorporate more AI capabilities into its iPhone and other devices. He also noted the firm's services business is showing "steady acceleration," which could continue going forward. The analyst's $220 price target implying 27% upside from Monday's close of $172.75. — Sarah Min 7:55 a.m.: JPMorgan upgrades Dollar General to neutral Dollar General is putting in the work to steer its business into a positive long-term direction, according to JPMorgan. The investment bank upgraded shares of the discount retailer to a neutral rating from underweight. Analyst Matthew Ross lifted his price target to $158, implying that shares of Dollar General will remain generally unchanged. The stock closed at $159.33 on Monday afternoon and has risen 17% this year. "We rate DG Neutral as we see sequential top-line improvement in FY24 supported by management's key initiatives around in-stocks, store standards, improving customer service, and signage highlighting value to customers," wrote the analyst. Ross estimates that same-store-sales in January were higher than they were in November and December. Similarly, he believes that traffic turned positive in the third quarter of last year for the first time since the third quarter of 2022. Additionally, Dollar General is putting in the long-term effort to improve the customer experience. "Our latest store work and mgmt access point to increased focus on in-stocks, store standards, improving customer service, and signage highlighting value with management citing a sequential turnaround timeline (i.e., 2H > 1H) rather than a 'snap your fingers' overnight inflection," he wrote. "Multi-year, mgmt is looking at 'every element' of the business citing a goal to get back to 'historic levels of operating margin and profit' over time." However, on the other hand Ross also pointed out upcoming margin headwinds, which include consumables mix, markdowns and transportation. — Lisa Kailai Han 7:35 a.m.: Bernstein initiates coverage of Regeneron, says stock is among 'best in the industry' According to Bernstein, biotech Regeneron is approaching its "next chapter of growth." Analyst William Pickering initiated coverage of Regeneron with an outperform rating and $1,125 price target, which suggests shares could gain 16.6% over the next 12 months. The stock has added 9.8% year-to-date. Regeneron — which has three core verticals of eye diseases, allergic and inflammatory diseases and oncology — has the strongest growth potential in asthma and eczema treatment Dupixent and oncology, according to Pickering. He has a more "cautious stance" on the company's Eylea drug, which is used to treat wet age-related macular degeneration, that he said is facing competitive pressure from pharma company Roche's Vabysmo drug. "While not cheap at 21x consensus '24 EPS, you get what you pay for. We model 13% EPS growth from '24-'27, one of the best in the industry," Pickering wrote in the Monday note. — Pia Singh 6:40 a.m.: William Blair upgrades Oracle after strong earnings William Blair analyst Sebastien Naji upgraded Oracle to outperform on Tuesday, saying he sees continued growth acceleration led by artificial intelligence and differentiated cloud product offerings. The upgrade comes after the company reported better-than-expected earnings for the fiscal third quarter . Shares jumped more than 13% in premarket trading. "In our view, the positive demand commentary and strong bookings growth undergird the structural shift at Oracle that positions the company well for a sustained acceleration in topline growth," Naji said in a Tuesday note. With the company's investments in OCI, its Oracle Cloud Infrastructure platform, he believes the company is "entering a new phase of higher growth" that will drive higher profitability and free cash flow for years into the future. The lower cost of OCI has led to robust demand, especially from large webscale customers like Uber and TikTok, according to Naji. Oracle is also well-positioned in the cloud service provider market given its unique cloud offerings, he added. Oracle shares have climbed 8.3% this year. Over the past 12 months, they are up 35.8%. ORCL YTD mountain ORCL year to date — Pia Singh 6:06 a.m.: Citi initiates coverage of The New York Times with buy rating New York Times is the only analog company that has successfully transitioned to a digital business, according to Citi Research. The firm initiated coverage of the legacy media company with a buy rating and $52 target price, which implies shares could gain 18.1% over the next year. The stock is down roughly 10.1% year to date. "Our bullish view is underpinned by two observations. First, the company is in the midst of thoughtful, well-executed digital pivot that should allow it to grow revenues at a mid-single-digit pace through 2026," analyst Jason Bazinet wrote in a note. "Second, the balance sheet is pristine with no debt, ample FCF, and robust capital returns (in the form of both dividends and buybacks)." According to Bazinet, New York Times has transformed through: print growth; print declines; divestitures; a digital pivot and emphasis on higher-priced content bundles, the latter which is still underway in showing steady growth. By 2026, he estimates the company will have $1.1 billion of cash with strong dividend increases and share repurchases, creating the possibility of further mergers & acquisitions or returning more cash to investors. — Pia Singh 5:49 a.m.: Jefferies thinks Carvana's stock has 'more attractive risk-reward' after quarterly earnings Jefferies upgraded online used-car dealer Carvana to hold from underperform, noting the company's efforts to achieve profitability. Analyst John Colantuoni raised his 12-month price target by $55 to $85. That number implies the stock could jump 8.8% from Monday's close. "Recent expansion in Retail GPU suggests CVNA's operational adjustments may have driven sustainable improvements to unit economics. Progress toward achieving positive cash flow also reduces downside risk and results in a more attractive risk-reward," the analyst wrote in a Tuesday note. "That said, concern about potential pressure to unit economics once growth accelerates keeps us from becoming more positive." restAlthough he sees Carvana becoming a "self-financed enterprise" that uses cash from its operations to fund growth and outstanding debt, he noted that Carvana hasn't proved consistent unit growth to help support a bull thesis. Carvana shares are up more than 47% this year, soaring after the company topped fourth-quarter profit estimates. — Pia Singh 5:49 a.m.: Raymond James upgrades Coinbase The recent crypto exchange-traded fund boom should help Coinbase in the near term, according to Raymond James. The firm upgraded the crypto trading platform to market perform from underperform. "We clearly underappreciated the impact that ETP inflows would have on the valuations of cryptocurrency in general and Bitcoin in particular, which in turn has driven massive outperformance in Coinbase's shares. Until ETP flows taper and/or reverse, we suspect the stock's current momentum may persist," analyst Patrick O'Shaughnessy wrote. ETP refers to exchange traded products, including ETFs. Bitcoin ETFs launched in January and some reached record trading volumes last month . The iShares Bitcoin Trust (IBIT) has popped 43% over the past month. COIN YTD mountain COIN year to date Coinbase shares received a boost from the ETF excitement, rising more than 40% year to date, as bitcoin climbs to record highs . "Until ETP flows taper and/or reverse, we suspect the stock's current momentum may persist," O'Shaughnessy said. — Fred Imbert