Monday's analyst calls: Apple gets a big upgrade, headwinds seen for Lululemon, Ulta and Tesla

Published Mon, Apr 29 20246:21 AM EDTUpdated Mon, Apr 29 20248:18 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.) Monday's analyst calls included an upgrade to Apple and a move in the opposite direction for athleisure giant Lululemon and electric car marker Tesla. In a key call, Bernstein analyst Toni Sacconaghi said worries over Apple sales in China are overdone, and he held with an aggressive price call for the iPhone giant's stock. For Lululemon, though, the landscape could get tougher due to consumer spending changes and more competitive business environment. Evercore cut its target for Tesla as it expects lingering headwinds to take their toll. Check out the latest calls and chatter below. All times ET. 8:18 a.m. Barclays upgrades AT & T over 'mismatch' between valuation and growth prospects Barclays says AT & T will continue to build on an exceptional execution framework moving forward, despite being pigeonholed with a "legacy" investor view. The firm upgraded the telecommunications stock to overweight from equal weight, and reiterated a $20 per share price target. Barclays' forecast implies 19.4% upside from Friday's $16.75 close. "In contrast to VZ and TMUS, where gross add growth will need to remain healthy to sustain present postpaid phone net add trends AT & T doesn't face the same issue because of its material outperformance on churn vs peers," analyst Kannan Venkateshwar said. "This is driven by the company's handset offers for existing subs which brought AT & T's churn to record lows." Venkateshwar says that the combination of clearer visibility into the company's overall strategy and strong cash flow "provides a unique window of opportunity with real catalysts." "Therefore, AT & T's ability to maintain its share of industry growth is not really impacted by its lower gross add volume. In fact, if anything, this lower volume has helped reduce aggregate subscriber acquisition cost and working capital needs, thus improving both margins and free cash flow," the analyst continued. AT & T stock has ticked down less than 1% in 2024 and was up nearly 1% in the premarket Monday. — Brian Evans 7:19 a.m. Citi upgrades Shopify, optimistic on long-term company growth Citi says Shopify is poised to grow thanks to a "more reasonable" valuation and cost-cutting efforts in 2023. "We've always admired Shopify as a company, given its strong product quality, unique business model spanning across software/payments/e-commerce etc., and exposure to an enormous e-commerce TAM [total addressable market]," analyst Tyler Radke. The firm upgraded the e-commerce stock to buy and raised its price target to $105 per share from $93. Citi's forecast calls for more than 30% upside ahead from Friday's $71.33 close. "Against weaker 1Q seasonality across software, we are more confident SHOP can surprise to the upside (especially after a disappointing Q4) as expectations are more muted, eCommerce trends appear more resilient with channel checks supportive of SHOP moving up-market, and our view that the opex guide could be conservative," the analyst said of forthcoming quarterly results on May 8. Shopify stock has ticked down roughly 8% in 2024. — Brian Evans 6:45 a.m. Barclays downgrades Ulta, says in-store competition is heating up While sticking by the beauty stock over the long-term, Barclays says the more pressing near-term will be difficult for Ulta Beauty as brick-and-mortar competition grows. "We are moving to the sidelines with a more cautious view on the near term. Longer term, ULTA is one of two specialty multibrand retailers with a best-in-class business model in the secularly growing beauty segment.," analyst Adrienne Yih said. The firm downgraded Ulta stock to equal weight from overweight, and lowered its price target to $434 per share from $612. Barclays' forecast implies about 7% upside ahead from Friday's $406.39 close. "Our rating is based on: 1) shift to offmall shopping with easy curbside and pick up in store options; 2) strategic investments in the business; and 3) value proposition with the combination of both mass and prestige brands," Yih added. Ulta Beauty stock has pulled back about 17% in 2024. — Brian Evans 6:30 a.m. Evercore slashes Tesla price target Evercore ISI says its forecast for Tesla stock is due for an update as headwinds from the start of the year converge and pressure the electric vehicle company. The firm reiterated an in-line rating on the EV stock, but lowered its price target to $145 per share from $155. Evercore's forecast implies roughly 14% upside from Friday's $168.29 close. Analyst Chris McNally the three main "crosscurrents" for Tesla stock are its difficulty selling more than 1.7 million to 1.9 million cars annually, as well as the pushed out timeline for its budget sedan and its push for full self driving capacity. "What remains unclear, is: what is the "new model" (refreshed Y?) and how will it be incorporated into existing manufacturing lines/? What happened to Mexico?" McNally said. Tesla stock has slipped about 33% in 2024. — Brian Evans 6:22 a.m. Bernstein upgrades Apple, says it's time to 'buy the fear' Wall Street's concern over Apple 's weakness in China may be overdone and signal it's time for investors to "buy the fear," according to Bernstein's Toni Sacconaghi. The Bernstein managing director and senior vice president upgraded the iPhone maker to outperform on Monday, and stood by a $195 per share price target. Bernstein's forecast implies more than 15% upside from Friday's $169.30 close. "We believe prevailing weakness in China is more cyclical than structural, and note that historically Apple's China business has exhibited much higher volatility than Apple overall, given its very feature-sensitive installed base," Sacconaghi said. "We further believe that replacement cycle tailwinds and incremental generative AI features set up Apple well for a strong iPhone 16 cycle," he added. Apple stock has pulled back 12.1% in 2024 but was up nearly 2% in premarket trading Monday. — Brian Evans 6:20 a.m. Barclays downgrades Lululemon, says consumers are shifting spending away from athleisure Barclays is moving to the sidelines on Lululemon over a shifting consumer spending landscape and higher competition. The firm downgraded the athleisure stock to equal weight from overweight on Monday, and slashed its price target to $395 from $546. Barclays' forecast still calls for 8.3% upside from Friday's $364.70 close. Analyst Adrienne Yih noted that in addition to changing spending trends and higher competitions, headwinds tied to Lululemon stock also include limited earnings upside ahead and a pullback in fixed-cost leverage as U.S. sales slow. "We believe that LULU remains one of the best positioned brands with one of the most solid business models based on innovation, technical solutions, and quality," Yih said. "However, given our sector thesis of seeking companies with accelerating sales growth in 2024, we believe that companies exhibiting accelerating sales growth versus decelerating sales growth have a greater probability of delivering sustained EPS upside," the analyst added. Lululemon stock has slipped nearly 29% in 2024 and was off 1.9% premarket Monday. — Brian Evans