Tuesday's analyst calls: Chip stock gets a price target increase, Bernstein sees Tesla dropping another 30%

Published Tue, Mar 26 20245:53 AM EDTUpdated Tue, Mar 26 20248:42 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.) A chipmaker and an electric vehicle giant were in focus on Tuesday's analyst chatter. Bernstein lowered its price target on Tesla, calling for 30% downside. Meanwhile, Mizuho raised its price target on Micron, citing a growing AI opportunity. Check out the latest calls and chatter below. All times ET. 8:02 a.m.: Goldman upgrades Nasdaq, sees nearly 20% upside ahead Goldman Sachs sees earnings growth ahead for Nasdaq . The firm upgraded the global technology company to buy from neutral on Tuesday. Its $73 price target suggests nearly 20% upside over the next 12 months. "Following several years of challenged EPS growth (2021-2024E CAGR of just 5%), we see NDAQ's earnings trajectory accelerating to ~12% in 2025 and 2026 with a shifting mix toward higher-valued Fin Tech and Index revenues driving the firm's valuation multiple higher over time," analyst Alexander Blostein wrote in a note to clients. He expects the company to integrate Adenza, the software application provider it acquired late last year, into a more enterprise-based offering, which will drive its FinTech revenues growth. He also sees cyclical tailwinds from equity and options volumes and "robust" growth in its index business, as well as faster-than-expected deleveraging, which could lead to sooner-than-expected share buybacks. — Michelle Fox 7:46 a.m.: UBS downgrades investment firm PJT The expected increase in mergers and acquisitions this year won't lift every stock tied to the investment banking business, according to UBS. Analyst Brennan Hawken downgraded PJT Partners to sell, saying in a note to clients that PJT's expertise in restructuring deals could work against it in this new environment. "Given the shifting rate outlook and re-opening of capital markets, we forecast PJT's [restructuring] revenues will decline by 8% annually through FY2025, partly offsetting forecast mid-teens % revenue growth in Strategic Advisory ('SA') and Park Hill, resulting in top-line revenue growth that is nearly half that of its larger peers," the note said. Given that outlook, the stock looks too expensive, Hawken said. "Trading at 24x NTM consensus estimates, PJT's valuation is ~5 turns above its long-term average and close to historical, peak valuations. PJT last traded at this valuation (roughly) in mid-2020, when revenue was growing nearly 50% due to [restructuring] strength, suggesting the market is underwriting sustained revenue growth," the note said. — Jesse Pound 7:34 a.m.: Bernstein: Chipotle shares can add another 10% Bernstein sees more room for Chipotle to run. Analyst Danilo Gargiulo hiked his price target by $400 to $3,200, with the new prediction now implying an upside of 10.2% from Monday's close. Gargiulo kept his outperform rating on the fast-casual Mexican restaurant chain. Chipotle can sustainably grow traffic at rates between the low and medium single digits due to its value proposition and brand momentum, among other factors, Gargiulo said. He said comparable store sales should grow by about 7% in 2024. The longevity of stores and focus on retaining employees can help Chipotle breaks the goal for average unit volume, or sales per individual store, of $4 million. Gargiulo said that target is in reach within the next five to six years, which would be ahead of Wall Street consensus forecasts. "We expect traffic to be boosted also by that product innovation, store automation, increased relevance of digital sales, the store mix shifting to Chipotlanes and increasing relevance of personalized marketing," he said. But, "we believe the most under-rated ingredient to sustain comparable sales to be talent and in-store execution." Hitting that $4 million marker would also help Chipotle expand its margin beyond 28%, Gargiulo said. Chipotle shares have surged nearly 27% this year. Last week, its board of directors approved a 50-to-1 stock split that is slated to take place in June if shareholders vote in favor. — Alex Harring 7:16 a.m.: Berenberg maintains Eli Lilly as top pharmaceutical top pick Berenberg said Eli Lilly can keep the momentum going from a strong 2023 on strength from the Zepbound obesity treatment while diabetes treatment Mounjaro sales grow. The firm reiterated the pharmaceutical stock as a top pick in the sector, alongside a buy rating and a price target of $850 per share. Berenberg's forecast implies nearly 10% upside from Monday's close. "Despite a strong start to the year (+32% ytd), Lilly remains our top pick in US pharma. Following the recent launch of Zepbound (obesity) in the US, a strong sales ramp for Mounjaro (diabetes) and continued incretin supply expansion, we believe that Lilly's momentum will remain positive," analyst Kerry Holford said. "While the stock trades on a premium on both P/E and EV/NPV metrics, we argue this is warranted given the company's superior growth profile, diversified portfolio and high RORI [return on relationship investment]," the analyst added. Eli Lilly stock has climbed nearly 33% in 2024. — Brian Evans 6:55 a.m.: Bank of America reiterates Equinix as top data center stock pick Bank of America is stating bullish on Equinix after meeting with the company's chief financial officer, Keith Taylor. The firm reiterated the data center stock as a top pick within the sector and stood by its $1,000 per share price target. BofA's forecast implies more than 26% upside from Monday's close. "EQIX believes it is well positioned to capture AI opportunities longer-term, but noted it remains early in terms of adoption and timeline and will take some time before hitting the P & L," analyst David Barden said. "Management continues to see the ability to push price for the overall business in select regions where supply remains constrained." Equinix has ticked down about 2% this year. EQIX YTD mountain EQIX in 2024 — Brian Evans 6:25 a.m.: JPMorgan reiterates Taiwan Semiconductor as overweight, says 'all roads in AI semis lead here' JPMorgan said Taiwan Semiconductor could be the main player for the path broader artificial segment. The firm reiterated an overweight rating on the semiconductor stock in a deep dive note on the chipmaker, and stood by a NT$850 price target. JPMorgan's forecast implies nearly 9% upside going forward. "TSMC's role as the key enabler for AI semis is becoming more established and we expect it to retain 90+% market share of all AI," analyst Gokul Hariharan said. "All roads in AI semis lead here." "TSMC's moat in AI semis appears wider than in previous product cycles, due to leading process technology, tightly integrated packaging methods, and support from the broadest IP and design service ecosystem in the semi-industry," the analyst added. TSMC stock has climbed nearly 32% this year. — Brian Evans 6:11 a.m.: Morgan Stanley upgrades Seagate Technology on growing earnings power Morgan Stanley thinks Seagate Technology's earnings story presents investors with a buying opportunity. The firm upgraded the data storage stock to overweight from equal weight on Tuesday, increasing its price target to $115 per share from $73. Morgan Stanley's forecast implies more than 30% upside from Monday's close. "A cyclical recovery, tech leadership (HAMR), and the potential for Gen AI-related demand means STX is entering a period of structurally stronger gross margins, with our new bottom-up analysis showing earnings power 25-30% greater than previously estimated," analyst Erik Woodring said. "We also believe Gen AI will be a longer-term 'rising tides lifts all boats' tailwind for storage, causing us to raise our FY26-27 HDD [hard drive disk] exabyte forecast by 4%," the analyst added. Seagate Technology stock has ticked up more than 3% in 2024. — Brian Evans 5:53 a.m.: Mizuho ups Micron price target, expects stronger AI opportunity Mizuho Securities said Micron Technology's artificial intelligence opportunity thanks to stronger High Bandwidth Memory 3E (HBM3E) pricing that could lead to better-than-expected sales in late 2024 into 2025. The firm reiterated a buy rating on the computer storage and memory stock on Monday and raised its price target to $130 per share from $124. Mizuho's forecast implies nearly 11% upside from Monday's close. Analyst Jason Getz sees HBM sales of about $9 billion and $13 billion for 2024 and 2025, respectively, with the possibility of expanding by 65% over three years on a compounded annual growth rate basis. "With 2023E headwinds mostly behind with inventories normalizing, pricing stabilizing and demand recovery, we see 2024E setting up much stronger with better pricing, industry supply discipline, and DC/PC unit growth with increasing content," he said. Micron has climbed more than 37% this year. Shares were up more than 1% in the premarket. — Brian Evans 5:53 a.m.: Bernstein cuts Tesla price target Longtime Tesla bear Toni Sacconaghi lowered his price target on the EV maker to $120 from $150, citing growing demand constraints. The new forecast implies downside of 30% over the next 12 months. "Quarter to date, Tesla has experienced soft China/Europe demand and constrained US Model 3 production," the Bernstein analyst wrote, reiterating his underperform rating and lowering his first-quarter and full-year deliveries estimates. "Despite the stock's underperformance YTD, we struggle to see a catalyst for TSLA. We expect tepid growth in 2024, as well as 2025, bringing into question the company's growth narrative," Sacconaghi wrote. Tesla has lost 30.5% in 2024, making it the worst-performing S & P 500 stock. To be sure, shares were up more than 3% in the premarket. TSLA YTD mountain TSLA ytd — Fred Imbert