Thursday's analyst calls: Nvidia 'most favored' chip stock, Tesla price target cut

Published Thu, Mar 14 20245:38 AM EDTUpdated Thu, Mar 14 20248:57 AM EDT

(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 electric vehicle maker and a major U.S. bank were in focus Thursday among the biggest analyst calls. UBS trimmed its price target on Tesla to $165 from $225, implying shares will hover around current levels for the foreseeable future. Goldman Sachs, meanwhile, raised its rating on Citigroup to buy from neutral. Elsewhere, Citi said Nvidia remains among its "most favored" names. Check out the latest calls and chatter below. All times ET. 8:10 a.m.: Evercore boosts price target on Netflix Netflix's ad-supported tier should help push shares of Netflix incrementally higher, according to Evercore ISI. The firm reiterated its outperform rating and increased its price target to $640 from $600, suggesting 5% upside from Wednesday's close. Evercore recently conducted its latest quarterly surveys in the U.S. survey and Japan and said it sees a number of positive findings. Among those is the addition of subscribers to its subscription- and advertising-based video on demand (SAVOD). In the U.S., 40% of sign-ups come from "gross adds" -- brand new Netflix subscribers or previous subscribers, with 9% coming from brand new users. In Japan, 70% are from gross adds, with 40% from brand new Netflix users alone, analyst Mark Mahaney wrote in a note Wednesday. "We think this shows that SAVOD is potentially TAM-expanding, driving incremental subs growth in Netflix's mature and more nascent markets alike," he said. In addition, 50% of ad-free users who are thinking of canceling indicated they were likely to switch to SAVOD and remain a subscriber. Mahaney also believes Netflix's paid sharing still has legs, mobile-only has potential for growth and it is still the leader in content quality. — Michelle Fox 7:46 a.m.: Wedbush upgrades Jack in the Box to outperform Jack in the Box looks due for a rebound after a rough start to the year, according to Wedbush. Analyst Nick Setyan upgraded the restaurant stock to outperform from neutral, saying in a note to clients that it was undervalued relative to peer and has low expectations to beat in the coming quarters. "We believe upside to 2H:FY24 expectations exists, near- and medium-term margin expectations are realistic, if not conservative, despite ... and unit growth expectations, particularly at JIB, are realistic," the note said. One reason for optimism is the rollout of the new Smashed Jack burger line. "Given Smashed Jack's performance during its soft launch and 2-3% incremental menu pricing ahead of 4/1, we believe an [mid single digit] comp during the final 4 weeks of FQ2 and into 2H is not out of the question," the note said. Wedbush hiked its price target on Jack in the Box to $88 per share from $79. That is 21% above where the stock closed Wednesday. Shares of Jack in the Box are down about 11% year to date. — Jesse Pound 7:43 a.m.: Wells Fargo upgrades RTX as engine recall headwinds fade Wells Fargo upgraded RTX to an overweight rating as the aerospace giant overcomes headwinds from its jet engine recall disclosed in July. "We think Raytheon defense margins return to pre-merger levels ( > 12%) in the next few years on better mix and improving [estimates at completion]," wrote analyst Matthew Akers. "[Geared turbofan engine] recall groundings soon to peak, likely catalyst for the stock." Along with the upgrade, the firm upped its price target to $120, implying nearly 33% upside from Wednesday's close. The stock rose more than 2% before the bell, building on its 7.6% yearly gain. — Samantha Subin 7:22 a.m.: JPMorgan upgrades UiPath, cites AI tailwinds and stabilizing revenue growth JPMorgan is turning more bullish on UiPath . "We are upgrading UiPath shares to OW from Neutral as we anticipate the period of [annual recurring revenue] growth decel transitioning into a stabilized growth trend while attachment to GenAI automation projects ramps amdist ongoing margin improvement," wrote analyst Mark Murphy in a Thursday note. The firm lifted its price target to $28 a share, reflecting about 15% upside from Wednesday's close. Shares gained more than 6% before the bell after the software company reported stronger-than-expected fourth-quarter results. Murphy views the company's initial 2025 guidance calling for 18% annual recurring revenue growth as another positive for the stock. The company should also benefit as generative artificial intelligence technology and large language models continue to rapidly evolve. "In our view, this reinforces our thesis of ARR growth stabilization and is an important development for investor perception, as it would help to mitigate the bear thesis of on-premise infrastructure suffering from less-clear end-state when compared to pure cloud products," he wrote. UiPath shares have dipped 1.7% this year following a more than 95% gain in 2023. Shares sit more than 71% off of their all-time closing high from May 2021. — Samantha Subin 6:57 a.m.: Evercore ISI downgrades Under Armour as founder returns Kevin Plank's return to Under Armour could be a sign of troubles at the sports apparel company. "In our view, Mr. Plank's return is a clear signal that UAA's strategy isn't working and supports our field work that UAA's [key performance indicators] continue to deteriorate in the current quarter," wrote analyst Michael Binetti as he downgraded shares to underperform from in line. "We think the most likely scenario Mr. Plank will pursue will include efforts to accelerate a return to N. America revenue growth … which we think will add significant risk to the brand longer-term," he added. The downgrade from Evercore ISI comes after the company on Wednesday announced that Kevin Plank would return as CEO, replacing Stephanie Linnartz a little over a year after she started the role. Shares dropped nearly 7% before the bell. According to Binetti, the return of the firm's founder could "create significant tension" for shares. The analyst reduced its price target to $7 from $8 a share, implying more than 13% downside from Wednesday's close. — Samantha Subin 6:39 a.m.: Daiwa upgrades Goldman Sachs Daiwa is turning more bullish on shares of Goldman Sachs . Analyst Kazuya Nishimura upgraded the banking behemoth to a positive rating, citing continued resilient bank earnings and a recovery in the investment banking market. "Earnings for major banks are solid, with major banks even providing updates on current robust earnings performance during conferences held over end February through early March," he wrote in a Wednesday note. "We see prospects for net interest income (NII) to beat initial guidance, while the recovery in the investment banking market, which has been lackluster, is more pronounced." Along with the upgrade, Nishimura lifted the firm's price target to $430 from $410 a share, implying about 10% upside from Wednesday's close. The stock's gained nearly 2% year to date. GS YTD mountain GS year to date Looking ahead, Daiwa expects robust trading demand to lift asset management fees. The firm is also bracing for a peak in the net charge-off rate for card loans. "While there will likely be some small financial institutions that fail due to not being able to absorb losses on commercial real estate, the health of the banking system should be firmly maintained," Nishimura wrote. He added that recent commentary from Federal Reserve Chair Jerome Powell also boosts the likelihood of "scaled back" reforms to the Basel III regulatory banking framework. — Samantha Subin 6:22 a.m.: Bernstein says Robinhood could rally more than 70% as 'crypto comeback' continues It's time to consider buying Robinhood as the financial services company continues "rising on the crypto comeback arc," according to Bernstein. Analyst Gautam Chhugani initiated coverage of the company with an outperform rating and $30 price target, implying that shares could rally nearly 75% from Wednesday's close. The stock is up nearly 35% in 2024 and popped more than 12% in the premarket Thursday after reporting a strong uptick in February trading volumes. "The buy-side and sell-side alike, refuse to see what we see - a monster of a crypto cycle over 2024-25," he wrote. "We expect crypto market cap to reach $7.5Tn vs. $2.6tn today. This leads to HOOD growing its crypto revenues by 9-fold (5x vs consensus), leading to us being 54% ahead on HOOD's 2025 consensus revenues and 3.5 times 2025 consensus earnings." Offering crypto trading on a regulated broker platform puts Robinhood in a "sweet spot" as traditional brokerage firms avoid crypto trading. The firm also offers competitive rates versus exchanges such as Coinbase, Chhugani added. "We see HOOD as a 2-year cyclical trade, riding the crypto-led earnings inflection over 2024-25," he wrote. — Samantha Subin 6:09 a.m.: Citi downgrades Chubb, cites balanced risk-reward Citi is moving to the sidelines on shares of Chubb , downgrading the insurance company to a neutral rating as near-term catalysts dwindle. "Our reserve analysis suggests reserves improved y/y, and we believe CB is positioned to continue expanding underlying margins," wrote analyst Michael Ward in a Thursday note to clients. "That said, we believe this is already largely priced into shares with risk/reward more balanced, and struggle identifying other N-T catalysts." According to Ward, the outlook for Chubb appears "adequately reflected" in shares since the firm upgraded the company last year on expected tailwinds from an "overreaction to reserve challenges." "While CB's long-tail reserve development trends have remained more volatile than recent historical averages (see figure below), its reserving position looks incrementally stronger to us at year-end 2023" and peers such as Travelers and American International Group. Along with the downgrade, Ward upped the firm's price target to $275 from $238 a share, implying about 6% upside from Wednesday's close. The stock has popped more than 14% in 2024. — Samantha Subin 5:45 a.m.: Citi calls Nvidia a 'most favored' semiconductor pick Citi is continuing to bet big on Nvidia , naming the AI darling among its "most favored names" in the semiconductor space, along with Advanced Micro Devices and Broadcom . "We believe clients are excited about the AI opportunity for Nvidia and AMD, equipment names on positive capex revisions and various CHIPS act subsidies, and NXP on their resilient auto exposure," wrote analyst Christopher Danely in a Thursday note. Nvidia shares have rallied more than 83% this year, building on 2024's nearly 239% gain as investors continue to bet on artificial intelligence. The firm holds an overweight rating on the stock, with its $820 price target implying about 11% downside from Wednesday's close. The firm named Micron Technology its top pick in the space as a recovery begins in the dynamic random access memory market even though the stock ranked as one of the "most disliked stocks" in recent meetings held with investors. "We came away with more conviction on our top pick Micron and more worried on analog stocks like ADI/MCHP," Danely wrote. — Samantha Subin 5:38 a.m.: UBS trims Tesla price target, cites downside risks to deliveries UBS cut its price target on Tesla to $165 from $225 a share, citing slower electric vehicle demand in the U.S. and Europe, coupled with competition concerns in China. "We lower our 1Q24 delivery forecast to 432k from 466k and are ~10% below 477k consensus," wrote analyst Joseph Spak in a Wednesday note. "Our revision is driven by slower EV demand (US, Europe) and slower production in NA and Europe." The revised price target implies about 3% downside from Wednesday's close. The stock slipped 1.4% before the bell. Shares have struggled this year, falling nearly 32% as demand for electric vehicles dwindles. TSLA YTD mountain TSLA year to date Given this backdrop, Spak anticipates downside risks to 2025 consensus deliveries and noted that forecasts need to "come down." For 2024, the firm's EPS expectations are down about 32% versus consensus expectations, he noted. "Though we remain cautious on the numbers and the stock near-term, we stay Neutral," Spak added. "While difficult to see a near-term catalyst for EV sentiment to improve, if/when it does we believe investors will look to TSLA for exposure." UBS' price target cut came a day after Wells Fargo downgraded Tesla to underweight from equal weight and called for a steep decline in the stock going forward. — Samantha Subin 5:38 a.m.: Goldman Sachs upgrades Citigroup Despite its early 2024 outperformance, Goldman Sachs thinks Citigroup is primed for even more gains from here. Analyst Richard Ramsden upgraded the bank to buy form neutral. He also raised his price target to $68 from $55, which implies upside of 18% from Tuesday's close. "Citi can grow revenue and deliver on expense reductions simultaneously, and there is significant capacity for C to either buy back stock or expand its balance sheet," Ramsden said in a note. "While we see a risk that C may not be able to achieve its medium-term target of 11-12% [return on tangible common equity] through 2026E laid out during the 2022 Investor day, we believe that the current valuation already discounts lower target returns." Citigroup shares are up more than 12% year to date, beating the S & P 500's 8.3% advance. C YTD mountain C year to date — Fred Imbert