Friday's analyst calls: Big solar upgrade, Morgan Stanley sees strong gains for this chipmaker
(This is CNBC Pro's live coverage of Friday's analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A major call on a popular solar stock was in focus Friday. Morgan Stanley upgraded First Solar to overweight from equal weight, with its new price target signaling more than 60% upside. Separately, the bank raised its rating on chipmaker Qorvo. Shares of both companies were up before the bell. Check out the latest calls and chatter below. 8:48 a.m. ET: Deckers may have a hot holiday item, but the stock doesn't have much more room to run Parents may be scrambling to hunt down Ugg Tasman slippers in chestnut for their teens' Christmas present, but the risk-reward has changed for the stock, according to Citi's Paul Lejuez. He downgraded Deckers to neutral from buy, while lifting the stock's target price to $710 from $665. Deckers shares are up 74% year to date, pushing the stock to $694. Lejuez says Ugg has had a banner fiscal 2024, and the company's Hoka brand has grown significantly, but the company will have to lap this stellar growth in fiscal 2025. "This is not a 'head for the exits' call (as the growth profile remains attractive), but rather more reflective of our view that the risk/reward has become more balanced," he said. — Christina Cheddar-Berk 8:28 a.m. ET: Lululemon's earnings are out, and here's what Wall Street has to say Analysts remain largely favorable on Lululemon after the athletic apparel retailer beat third-quarter sales expectations, but released guidance for the fourth quarter that fell short of Wall Street's estimates for the holiday season. Here's what analysts had to say about the company: Deutsche Bank: Analyst Gabriella Carbone reiterated her buy rating and $502 price target. She believes Lululemon is poised to have a "nice beat" in the fourth quarter with upside to revenues, especially in North America. "While LULU is trading at a premium multiple relative to peers, we think the company is well-positioned moving ahead as industry-leading revenue growth (and market share gains) combine with an abatement of headwinds, leading to consistent margin expansion," the analyst said. UBS: The firm believes that "more meaningful" earnings-per-share upside is limited for Lululemon, as it expects deterioration in the U.S. softgoods consumer spending environment. UBS slightly raised its price target to $470 and maintained its neutral rating. Goldman Sachs: The firm maintained its buy rating and 12-month price target of $513. According to analyst Brook Roach, Lululemon's strong early holiday results, product innovation and healthy market share growth in the active apparel market are all points of encouragement for the stock. The firm forecasted a reacceleration into long-term growth plans in 2024. Morgan Stanley: Analyst Alex Straton upped his price target by $56 to $593 and kept his overweight rating on the stock. If the stock boasts another year of positive earnings-per-share revisions by the end of 2024, which Straton said is a rare outcome in the industry, then he said Lululemon can sustain its current multiple or move towards recent highs. Shares of the retailer declined 1.7% in premarket trading. The stock closed up nearly 0.9% higher at $464.67 on Thursday. — Pia Singh 8:12 a.m. ET: Bank of America reiterates buy rating on Nio The outlook for Nio looks bright, according to Bank of America. Analyst Ming Hsun Lee reiterated his buy rating on Thursday for the electric vehicle maker. His price objective of $11 implies a potential upside of 47%. Shares of Nio are down 23% this year. "We maintain our Buy rating given the company's advantages in the premium smart EV segment, and solid volume sales backed by continual new model launches to help share gain," the analyst wrote. As another catalyst, the analyst cited Nio's battery swap station technology and network. Additionally, Lee is bullish on the company's upcoming plans to launch a flagship model later this month. — Lisa Kailai Han 8:05 a.m. ET: Positive signs from Dollar General's earnings results, says UBS UBS analyst Michael Lasser thinks Dollar General's third-quarter earnings showed some "green shoots," particularly from a top line perspective. Dollar General reported its earnings on Thursday. The company posted a fall in net income amid slowing sales and growing criticisms of subpar work conditions. "In DG we trust," Lasser wrote in a Friday note. "While DG's 3Q comp performance still lags many of its peers, the acceleration that it saw in the second half in the period (and into November) is a sign that its actions are having a positive impact." A weaker 2024 macro backdrop could help Dollar General attract customers and retain workers, he added. "Thus, as the sales continue to get better, we think the rest of its model will also eventually fall into place," Lasser said. Shares slipped 1.2% Friday before the bell. The stock is down by more than 46% in 2023. — Hakyung Kim 7:43 a.m. ET: Falling oil prices a risk for Vital Energy, Bank of America says With oil prices heading for a potential seventh straight losing weak, some energy producers could start to feel the pressure, according to Bank of America. Analyst John Abbott initiated coverage of Vital Energy at underperforming, saying in a note to clients on Friday that Vital is more at risk from falling oil prices than many of its peers. "While our base case suggests ~14% upside potential at flat $75 WTI, against a backwardated oil price that has so far had limited support from OPEC+ efforts to defend price, our concern is a negative valuation skew amongst the highest of US E & P peers," the note said. At the same time, Vital's portfolio of wells might be more expensive in the coming years. "Its most prospective locations in Howard County, TX will largely be gone by end-2024 with future activity shifting to higher cost acreage in Southern Delaware and less productive Western Glasscock Co. in the Midland basin. In our view the risk is that VTLE's portfolio capital efficiency & portfolio break-even deteriorates over time," the note said. Bank of America set a price target of $48 per share for Vital, which is 13% above where the stock closed on Thursday. — Jesse Pound 7:40 a.m. ET: Wells Fargo upgrades Sallie Mae to overweight Sallie Mae shares are well-positioned for more love from investors — and a higher valuation, according to Wells Fargo. Analyst Michael Kaye upgraded shares to overweight from equal weight in a Friday note. He also raised his price target to $20, implying 23% upside potential from Thursday's close. "The SLM story has attractive elements incl. its dominant position in private student lending (50%+ mkt share) & a powerful loan sale/stock buy back strategy. In addition to stock buy backs to support the shares, SLM should be more recession resistant w/ a high credit quality portfolio (749 FICOs w/ 90% co-sign) & resilient growth in student lending even in a downturn," wrote Kaye. The company's market share dominance should only grow with the exit of Discover, he added. He believes this could also allow Sallie Mae to become pickier on credit. — Hakyung Kim 7 a.m. ET: What analysts on Wall Street are saying after Broadcom's fiscal fourth quarter results Analysts are largely sticking by bullish outlooks on Broadcom after the company's fiscal fourth quarter results. The company beat Wall Street estimates on adjusted earnings per share on Thursday, but missed forecasts on revenue on Thursday. "We continue to believe AVGO's unique ability to address secular growth opportunities (AI), deliver strong deal synergies and return significant cash to shareholders (dividend raised +14%) yields an attractive combination," Deutsche Bank analyst Ross Seymore said. The analyst reiterated a buy rating and raised his price target to $1,100 per share, or about 19% upside from Thursday's close. "Sifting through the moving parts, AVGO's guidance and AI commentary are in-line on a pro-forma basis for the entirety of F2024 and EPS seems consistent w/our ~$49 preview and the ~$49-50 numbers we were hearing from investors. Ergo, there is not a ton here to sway the debate," UBS analyst Timothy Arcuri said. Arcuri also reiterated a buy rating but lowered his price target to $1,075 from $1,125, or about 17% upside moving forward. — Brian Evans 6:44 a.m. ET: Citi raises price target on Roku, forecasts higher platform revenue and gross margins Citi thinks Roku has room to grow platform revenues and gross margins beyond Wall Street estimates, but it's sticking by its overall company thesis. The bank reiterated a neutral rating on the streaming equipment stock but raised its price target to $110 per share from $80 to reflect the improving outlook. Citi's forecast equates to about 9% upside moving forward. "We believe there is scope for Street estimates for Platform revenues and Platform gross margins to move higher," analyst Jason Bazinet said. "Platform revenues should rise on easy comps. Platform gross margins should move higher as content amortization costs slow and costs normalize post the 3Q23 restructuring." Roku stock has soared more than 147% in 2023. — Brian Evans 6:40 a.m. ET: UBS names Boeing a top stock pick for 2024 on improving supply chain picture Despite multiple false starts on a true company recovery, UBS thinks Boeing will have its moment in 2024. The firm listed the airplane maker as a top pick heading into next year and reiterated a buy rating and a $275 per share price target. UBS' forecast calls for nearly 16% upside from Thursday's $237.33 close. "The recovery has had multiple head-fakes, but we see the set-up for 2024 skewed significantly favorably," analyst Gavin Parsons said. "The supply chain is stabilizing which drives both higher production and inventory unwind, on top of new aircraft demand at record levels building larger backlogs and long-visibility, all of which supports a step-function increase in free cash flow." Boeing shares are up more than 24% this year, but it's been a volatile ride for investors. At one point, the stock was down more than 6% on a closing basis. BA YTD mountain BA in 2023 — Brian Evans 6:24 a.m. ET: JPMorgan highlights Exxon Mobil's 'attractive valuation' and 'defensive dynamics' JPMorgan thinks Exxon Mobil stands out among U.S. oil stocks thanks to its "attractive valuation" as well as the defensive nature of the stock that can ride out an economic downturn. The firm reiterated an overweight rating on shares of the oil giant in a Friday note, and maintained its $127 per share price target which equates to about 29% upside from Thursday's $98.42 close. "XOM's portfolio continues to have a good mix of defense (balanced portfolio across Upstream, downstream and chemicals, low dividend break-even) and offense (torque to a demand recovery)," analyst John M Royall said. "Further, XOM should benefit from its unique high-margin asset in Guyana, which should deliver substantial [free cash flow] growth in years ahead." The company in October agreed to buy Pioneer Natural Resources for nearly $60 billion, its biggest deal since acquiring Mobil in the late 1990s. Shares have ticked down roughly 11% this year. — Brian Evans 6:16 a.m. ET: Jefferies downgrades Nokia over forecast difficulty growing margins Jefferies thinks Nokia will have difficulty expanding its margins moving forward after AT & T snubbed the company in favor of rival Ericsson. The firm downgraded European-listed shares of the telecommunications company to hold from buy on Friday, and lowered its price target to €3 from €4.10. Jefferies' forecast equates to about 1% upside from Thursday's close. "Apart from the headwind from the loss of AT & T revenue, we also expect the Network Infrastructure division to be impacted by the ongoing inventory correction and weaker underlying growth. Our PT is based on 6x/0.8x our new FY24 EPS/sales estimates (prev: 8x/1.1x), which we have downgraded by 5%/2%," analyst Janardan Menon said. "These multiples are below Nokia's 3-yr average of 8.5x/1x, since we expect the stock to trade at more muted multiples until there is more visibility on a turnaround." U.S.-listed shares are down more than 11% this week. — Brian Evans 6:07 a.m. ET: D.A. Davidson initiates Mondelez at buy, cites underappreciated value Wall Street is overlooking Mondelez International , according to D.A. Davidson. The firm initiated the snacks company with a buy rating in a Thursday note and an $83 per share price target, which implies about 16% upside from Thursday's close. "In our view, the company's advantaged global market positioning, increasing momentum, and optionality are not yet fully appreciated in consensus or valuation," analyst Brian Holland said. "With that, we believe the combination of anticipated upward revisions and corresponding multiple expansion invites continued appreciation for the best performing large cap Packaged Food stock over the past year." Shares have ticked up more than 7% this year, lagging the broader market. — Brian Evans 5:51 a.m. ET: Morgan Stanley grows more bullish on Apple, raises price target Morgan Stanley thinks Apple's short-term headwinds tied to iPhone challenges in China are abating, and the stock is poised for more growth. The bank reiterated an overweight rating on the tech giant on Friday and raised its price target to $220 from $210, which equates to about 13% upside from Thursday's close. "While Apple is exposed to a weaker consumer and risks in China, the long-term outlook remains attractive given its technology leadership, sticky user base, and path to spend per user upside. Catalysts include 1) a stronger iPhone 15 cycle, 2) re-accelerating Services growth, 3) underappreciated GM tailwinds, 4) new product launches, and 5) a potential hardware subscription," analyst Erik Woodring said. Some investors and analysts were concerned that a slowdown in China could hurt iPhone sales, especially around the holiday season. Still, Apple shares are up nearly 50% in 2023. — Brian Evans 5:43 a.m. ET: Morgan Stanley upgrades Qorvo on expected margin recovery, uptick in volume Chipmaker Qorvo will benefit from the transition to 5G as well as demand growth in China that will help broaden gross margins, according to Morgan Stanley. The bank upgraded shares of the semiconductor company to overweight from equal weight and raised its price target to $134 per share from $120. Morgan Stanley's forecast implies about 34% upside from Thursday's $100.32 close. The stock has ticked up about 11% this year. It also traded 1.3% higher in the premarket. QRVO YTD mountain QRVO in 2023 "Qorvo has the most attractive catalysts out of our smartphone names," analyst Joseph Moore said. "The momentum from a China Android snapback and content gains from 5G transition should drive revenue growth and expand gross margins." Morgan Stanley also downgraded chipmaker Qualcomm to equal weight, with Moore noting that the company's "strong execution in the last 2-3 years has resulted in stronger-than-normal market share and pricing" and "creates a tough bar going forward." — Brian Evans 5:43 a.m. ET: Morgan Stanley upgrades First Solar Morgan Stanley analyst Andrew Percoco raised its rating on First Solar to overweight from equal weight. He also increased his price target to $237 per share from $214. The new forecast implies upside of 64%. The analyst pointed to four drivers that can send the stock, along with the rest of the sector, sharply higher in the new year: Declining interest rates "Deflation of core clean energy technologies," which can "help offset elevated interest rates." "Election cycle considerations for clean energy (2H24 consideration): While still early, we don't see [Inflation Reduction Act] repeal as likely. However, anti-IRA rhetoric on the campaign trail could add uncertainty and affect clean tech valuations." Earnings growth "We believe First Solar offers one of the strongest risk-adjusted earnings profile with its sold out position through 2026, which when combined with its cost hedging should result in 17 pct pts of relatively low-risk margin expansion through 2026, before accounting for IRA benefits," Percoco said. Solar stocks have gotten battered in 2023, and First Solar is no different. First Solar shares are down 3.8% year to date. While that performance lags the S & P 500's 19% gain, it outpaces the broader solar space. The Invesco Solar ETF (TAN) has fallen 36% in that time. The stock traded more than 3% higher on the back of the upgrade. — Fred Imbert