Monday's analyst calls: Disney upgrade, Goldman trims Boeing price target

Published Mon, Mar 25 20245:37 AM EDTUpdated Mon, Mar 25 20248:34 AM EDT

(This is CNBC Pro's live coverage of Monday's analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A major media stock and an aerospace giant were in focus during Monday's analyst chatter. Disney was upgraded to overweight by Barclays, noting shares have room to run from here. Goldman Sachs, meanwhile trimmed its price target on Boeing, citing several risks amid the company's ongoing safety issues. Check out the latest calls and chatter below. All times ET. 8:07 a.m.: Wells Fargo upgrades GoodRx, says shares can rally more than 50% It's time for investors turn constructive on shares of GoodRx , according to Wells Fargo. Analyst Stan Berenshteyn upgraded the digital healthcare stock to overweight from equal weight and upped his price target to $10, citing strong visibility into 2024 guidance and potential upside to estimates and valuation multiples. "We think this sets up GoodRx to deliver on a beat & raise narrative in 2024 with upside to consensus expectations in 2025," Berenshteyn wrote. "We expect this dynamic to help GDRX close the valuation gap to its peers (Ex.1), in turn setting up the stock to see meaningful outperformance over the next 12 months." The updated price target suggests that shares can surge another 52% from Friday's close. The stock rallied about 7% before the bell and is down about 2% year to date. Underpinning the firm's thesis is a bet on improving visibility that should help counteract expectations for slower growth. Berenshteyn also expects EBITDA margins to come in ahead of consensus expectations in 2025. "Net-net, we think GoodRx is positioned to execute consistently with revenue/margin risk skewed to the upside alongside prospects for a recovery in valuation multiples," he wrote. — Samantha Subin 7:51 a.m.: Citi hikes price target for Netflix, sees upside for subscriber growth Netflix's recent burst of subscriber growth will prove to be more than a short-term change from the password sharing crackdown, according to Citi. Analyst Jason Bazinet raised estimates for the streamer, saying that sub growth can surprise again in the coming quarters. "Net adds have exceeded consensus estimates for three consecutive quarters. We believe the outperformance has been driven by the firm's ad tier and password crackdown. Looking ahead, we expect the firm to continue to see healthy sub growth and see scope for consensus subscriber estimates to move higher," Bazinet wrote. "We believe 1Q24 and 2Q24 net additions may be ~3 million too low. In addition, it suggests consensus 2024 net additions may be ~5 million too low, while net additions from 2025 through 2027 may be ~3 million too low," he added. Citi also raised the price target on Netflix to $660 from $550. The new price target is about 5% above where the stock closed Friday. Citi maintained its neutral rating on the stock. — Jesse Pound 7:49 a.m.: Wells Fargo upgrades Masimo on possible spinoff Wells Fargo upgraded Masimo to overweight from equal weight on Monday, citing the medical technology company's announcement Friday it is considering the separation of its consumer business . Spinning off the business, which includes consumer health and audio products, would be a step in the right direction for Masimo, analyst Vik Chopra said in a note to clients. Masimo acquired audio products maker Sound United LLC in 2022 for $1 billion. "Investors have never come around to the Sound United deal, and we believe a separation will allow MASI to focus on its core HC business. As such, we see potential for multiple expansion over time for MASI as mgmt works through strategic options," Chopra said. He also raised his price target to $160 from $117, suggesting nearly 19% upside from Friday's close. Shares of Masimo were up 12% in premarket trading. — Michelle Fox 7:47 a.m.: Evercore initiates Motorola as outperform, says stock is a 'unique asset' While Evercore ISI notes that Motorola Solutions isn't a cheap stock, the firm says there is still plenty of room for upside. "While the stock isn't cheap, we don't think it's trading at an excess premium to other 'set it and forget it' peers," Evercore analyst Amit Daryanani wrote in a Sunday note. The firm initiated coverage of the telecommunications company at outperform with a $400 per share price target, or more than 14% upside from Friday's $348.56 close. Shares have ticked up 11.3% in 2024. "MSI is a unique asset that is well-positioned to sustain high single digit topline growth and mid-teens EPS growth over the next several years and do so with limited volatility and high consistency," Daryanani added. — Brian Evans 7:45 a.m.: Evercore becomes bullish on Foot Locker The difficult days may finally be behind Foot Locker , according to Evercore. Analyst Michael Binetti upgraded shares to outperform from in line. He also raised his price target on shares to $32 from $28, implying 31% upside from Friday's close. The stock has struggled in the past 12 months as the shoe retailer's brand relaunch and real estate reorganization, known as the "Lace Up" plan, struggled to gain traction. Shares are down more than 20% in 2024 alone and more than 30% over the last 12 months. Despite the difficult start to the Lace Up turnaround initiative, Binetti believes the worst is now behind the company. "With broken inventories now improved and multi-faceted new growth initiatives coming online, FL has pivoted back to share gains in each of the past 4 months. 40% of FL's sales are with brands that are growing fast, and FL's biggest brand gave a clear-throated endorsement that it will be reinvesting aggressively for growth in the wholesale channel," the analyst wrote in a Monday note. Shares gained more than 3% Monday during premarket trading. — Hakyung Kim 7:21 a.m.: Nvidia, Applied Materials included in BofA's favored global stocks list Bank of America updated its second-quarter "Best of Breed" list to include Nvidia , Applied Materials , Intuitive Surgical and Monster Beverage , among several other global names across a variety of sectors. This group of stocks, also referred to as "BoB," comprises high quality companies with strong business models and high growth potential, according to analyst Michael Hartnett. These highly liquid companies have solid earnings growth, strong management, healthy balance sheet and potential for margin expansion, he said. BofA's BoB group outperformed the MSCI All Country World Index in the first quarter of 2024, and has gained 432% since its inception on April 5, 2010, also outperforming the ACWI, according to the Sunday note. — Pia Singh 6:40 a.m.: Mizuho downgrades major EV makers—including Tesla—citing 'Catch-22' industry challenges Mizuho Securities analyst Vijay Rakesh downgraded EV makers Tesla , Rivian and China-based Nio each to neutral. "While we remain constructive on the broader EV landscape with the LT trend to electrification, near-term EV demand and tightening liquidity are creating challenges into 2025E," Rakesh wrote in a Sunday note. "EV sales growth is decelerating and much needed lower-cost models are now expected late 2025-26E. We believe EV OEMs face a "Catch-22" juggling profitability and production ramps." Citing challenges of moderating growth, increasing China competition and higher inventory, Rakesh lowered his price target on Tesla to $195, which implies shares could gain just 2.4%. Already, the stock has fallen more than 31% this year. His $12 price target on Rivian and $5.50 target on Nio suggests each stock could gain more than 11%, meanwhile. Rivian shares are down nearly 54% since the start of the year, while Nio is down 46%. The analyst raised his price target on buy-rated General Motors, on the other hand, favoring its measured EV rollout strategy. — Pia Singh 6:28 a.m.: Raymond James downgrades lawn products maker Scotts Miracle-Gro Scotts Miracle-Gro appears to have limited near-term upside, according to Raymond James. Analyst Joseph Altobello downgraded shares to market perform from strong buy, saying the recent rally has pushed it into "fair value territory." He also removed his $70 price target on the company, which sells branded consumer lawn and garden products. Shares have jumped 15% this year, outperforming the broader market. According to Altobello, these gains have been driven by the company's positive quarterly results and optimism on the regulatory and legal fronts with the cannabis industry, which would benefit the company's Hawthorne hydroponics segment. It's also a highly-levered company that has benefitted from overall market strength, helped by the Federal Reserve's positive commentary last week about the rate-cutting timeline, the analyst added. The stock is likely pricing in a "plausible fiscal year 2026 scenario," Altobello said, adding that "investors are clearly not valuing SMG on FY24 or even FY25 numbers, as the company appears to be in the midst of a significant multi-year margin expansion opportunity." — Pia Singh 5:51 a.m.: JPMorgan initiates coverage of Super Micro, citing its AI compute market dominance As the AI compute industry grows, so should Super Micro Computer , according to JPMorgan's Samik Chatterjee. The analyst initiated coverage of the stock with an overweight rating and year-end price target of $1,150, which implies shares could jump 18.2%. "Super Micro is the leading company in the AI compute market, which is burgeoning with demand stemming from training AI models, Retrieval-Augmented Generation by Tier 2 CSPs and Enterprises, and eventually AI inferencing workloads," Chatterjee wrote in a Monday note. "We expect the leadership to continue, led by a balance of custom built solutions and fast time to market, although potential upside is more likely from rapid expansion in the AI Server market rather than expansion of the already premium valuation multiple," he added, saying the "compute revolution" is still in its early stages of demand and investments. The AI server market should expand from $41 billion in 2023 to $283 billion in 2028, he said. Shares of Super Micro — which makes servers, storage systems and other solutions related to data centers and cloud computing — have already soared 242.2% this year, fueled by the AI craze. — Pia Singh 5:37 a.m.: Barclays upgrades Disney to overweight, says shares could pop more than 16% Disney shares still have room to run even after significantly outperforming the broader market this year, according to Barclays. Analyst Kannan Venkateshwar upgraded shares of the media giant to overweight from equal weight and also raised his price target by $40. His new $135 price target implies 16.5% potential upside over the next year. "The recent narrative reset is likely to be followed by positive estimate revisions, which is still early in the cycle and should further support valuation," Venkateshwar wrote in a note. "While this phase of earnings stabilization has been largely driven by tactical tailwinds from the strike last year, accounting benefits from Hulu consolidation and cost cuts, we do believe the next phase may be more impactful as a number of turnaround elements still remain work in progress and may manifest more in numbers starting next year." As part of its bull case, the analyst expects Disney's streaming business to potentially break even a quarter or two earlier than the company's guidance of the fourth quarter of this year, driven partly by cost cuts and price increases. The stock has gained more than 28% this year, helped by Disney's better-than-expected free cash flow and earnings per share guidance for the 2024 fiscal year given during its last quarterly earnings call. Shares rose 1.5% in premarket trading Monday. — Pia Singh 5:37 a.m.: Goldman Sachs trims Boeing price target Goldman Sachs lowered its price target on Boeing to $257 from $268 amid the airplane maker's ongoing issues safety issues. "We now assume Boeing delivers 377 737 MAX units in 2024, with relatively light deliveries through the entire first half," analyst Noah Poponak wrote. "We assume the delivery rate approaches 38/month in 3Q24, and then is in the 40s in 4Q24." Boeing is the second-worst performing S & P 500 stock this year, down nearly 28%. The performance comes after a section of a plane blew off midair during an Alaska Airlines flight. Poponak reiterated his buy rating on the stock, but highlighted three risks for the company going forward: A slower pace of air traffic growth Supply chain risk "contract operating performance within the defense segment" To be sure, the new target still implies upside of 36%. BA YTD mountain BA year to date — Fred Imbert