Friday's analyst calls: What the Street says after more Big Tech earnings, Nvidia price target hike
(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.) Major tech-related companies were front and center on analysts' minds Friday. Analysts around Wall Street reacted to results from Amazon, Meta Platforms and Apple. On Amazon, a Goldman Sachs analyst said the company is positioned "as a leader in all aspects of secular growth within our Internet coverage." Elsewhere, Bank of America raised its price target on Nvidia, calling for more than 25% upside. Check out the latest calls and chatter below. All times ET. 8:25 a.m.: Evercore ISI upgrades Global Payments to outperform Global Payments' earnings report later this month could be the start of a big year for the stock, according to Evercore ISI. Analyst David Togut upgraded the payments to stock to outperform from in line, saying in a note to clients that the company should deliver a positive surprise to the market when it reports its fourth quarter results on Feb. 14. "We envision meaningful upward revisions to CY24 & CY25 adjusted EPS consensus estimates plus forward multiple expansion stemming from declining capital intensity and improved FCF conversion," the note said. The company's merchant solutions business should perform better than rival Visa, Togut said. Visa said in its latest quarterly report last week that it expects net revenue growth in the low double digits for its current fiscal year. "GPN's volume growth should continue to perform well relative to Visa's total US payment volume gains as domestic air-travel growth continues to slow, a vertical that GPN is underweight," the note said. Evercore hiked its price target on Global Payments to $185 per share from $129. The new target is more than 36% above where shares closed on Friday. — Jesse Pound 8:02 a.m.: Citi keeps bullish rating on Disney as earnings near Citi is optimistic ahead of Disney earnings. Analyst Jason Bazinet reaffirmed his buy rating and $106 price target going into the entertainment giant's report next week. His price target reflects a 9.2% upside over Thursday's closing level. "We believe the primary focus will be on DTC profitability and the execution of company's cost saving initiatives announced in F1Q23," Bazinet wrote to clients. Bazinet said he'll be listening for information or updates on five key topics: ESPN's direct-to-consumer strategy Cost-saving initiatives Hulu control Goals in India Plans of new CFO Hugh Johnston Disney has added 7.5% in the new year, outperforming the broader market's gain of almost 3%. But that comes after a year of underperformance, with the stock finishing 2023 up just under 4% while the S & P 500 jumped more than 24%. — Alex Harring 7:58 a.m.: Bernstein takes a breather on Vertex Pharmaceuticals Vertex Pharmaceuticals doesn't appear to have much more upside potential this year, according to Bernstein. The firm stepped to the sideline on shares, lowering its rating to market perform from outperform. It reiterated its $450 price target, implying just 4% upside potential from Thursday's close. Shares have rallied more than 40% over the last 12 months. Analyst William Pickering cited "a thinning catalyst calendar and current valuation that does not leave significant upside to our price target." "Vertex reports next Monday, and we also see some risk that expense guidance disappoints like last year," he said in a Friday note. Pickering is leaning negative on the company's risk-reward outlook, and does not have high conviction on the company's cystic fibrosis treatment, which recently completed Phase 3 studies. — Hakyung Kim 7:48 a.m.: Deckers earnings make analysts even more bullish Analysts see more room to run for Deckers after a better-than-expected earnings report. The shoemaker earned $15.11 per share and revenue of $1.56 billion. Both topped Wall Street expectations, with the consensus forecasts of analysts polled by LSEG at $11.48 for earnings per share and $1.45 billion in revenue. Bank of America analyst Christopher Nardone reiterated his buy rating following the release, noting the company is "hurdling over another high bar." Nardone raised his price target by $135 to $875, now implying shares can rise 13.2% over Thursday's ending price. "We ... expect innovation and newness will continue to drive share gains at HOKA and UGG," Nardone said, referencing two of the company's popular brands. (Hoka is known for running shoes, while Ugg is synonymous with its winter boot line.) UBS analyst Jay Sole is even more optimistic. He hiked his price target by $200 to $1,150, which now means he believes shares can rally 48.8% from Thursday's close. "We anticipate sentiment stays bullish around the stock as the company shows it can maintain a high EPS growth rate," Sole told clients, while also noting excitement around Hoka and Ugg. Deckers has already soared more than 15% in 2024. It has advanced every year since 2015. — Alex Harring 7:32 a.m.: UBS stays bullish on Chipotle with earnings on horizon Chipotle has traffic momentum and a growth rate that deserves a premium, according to UBS. Analyst Dennis Geiger reiterated his buy rating on the stock heading into its earnings report next week. Geiger's price target implies the stock can add 10.6%. Geiger said to expect traffic momentum in the fourth quarter and a continuation of positive numbers on the measure throughout 2024. He also said there's potential upside to fourth-quarter margins. "We continue to view CMG as one of the best positioned in the sector for traffic outperformance and margin gains into 2024, and we value the brand's highly dependable growth outlook," Geiger told clients. In addition to margin opportunities, he said accelerating unit growth can also help push the share price up. Chipotle has advanced nearly 7% in the new year, building on 2023's rally of nearly 65%. — Alex Harring 7:18 a.m.: Costco has more upside ahead after blowing past prior expectation for share price: Oppenheimer Oppenheimer expects Costco shares to take another leg up. With the wholesaler now trading above analyst Rupesh Parikh's previous $695 price target, he now expects the stock to reach $760, or 7.9% above Thursday's close. Parikh also reiterated his outperform rating. "We believe fundamental momentum is poised to accelerate from here," Parikh wrote to clients on Friday. That due to "COST's demonstrated ability to drive grocery share even in low inflationary/deflationary backdrops, an improving outlook for its non-foods offering on easier comparisons and moderating inflation, and a potentially strengthening middle to higher income consumer." While Parikh expects a membership fee hike in the coming quarters, he said it may no longer be a positive catalyst given recent gains. Costco deserves its high valuation, the analyst said. The stock has added nearly 7% so far this year, extending gains after climbing more than 44% in 2023. "COST shares now trade at peakish valuations," he said. "We believe COST's superior global unit growth prospects, track record of driving share gains, and competitive moat should help to sustain a premium valuation." — Alex Harring 7:07 a.m.: Deutsche Bank deals latest blow to regional bank after earnings disappoint Deutsche Bank joined the post-earnings dogpile on New York Community Bank . Analyst Bernard von-Gizycki downgraded the regional bank to hold from buy and slashed to price target to $7 from $15. Still, Von-Gizycki's new target implies shares can advance 21.7% from Thursday's close. It has been a tough period for the company since reporting earnings Wednesday, with von-Gizycki noting that shares have tumbled about 45% since. Investors were nervous after the bank posted a fourth-quarter loss, announced a provision for credit losses and cut the dividend. "It's a tough call given the sharp sell-off and low valuation but also a lot of uncertainty surrounding credit quality and net interest income and resulting earnings," von-Gizycki wrote in a Friday note to clients. The analyst said his hold rating reflects three key factors: Lower earnings power after the report will will "significantly diminish" the near-term outlook for the net interest margin. There's uncertainty over timing and costs to implement certain requirements for the business. The credit outlook "remains uncertain post large reserve events," despite historical management being strong. Despite the downgrade, shares of the bank added 2.1% before the bell on Friday. Still, the stock has lost nearly 44% compared with the start of 2024. Traders may know New York Community Bank for its subsidiary Flagstar, which acquired assets from shuttered Signature Bank amid the banking crisis last year. — Alex Harring 6:42 a.m.: This internet stock can rally more than 20% as e-commerce platform reaches 'inflection point,' Citi says There's an opportunity to snap up Sea shares as one of its brands nears a turning point, according to Citi. Analyst Alicia Yap upgraded the consumer internet stock to buy from neutral and raised her price target by $6 to $50. Yap's new target now implies shares can climb 23.5% over the next year. A key part of this thesis is tied to the ability of Shopee, Sea's e-commerce platform, to remain a leader while narrowing losses, she said. "We could see an inflection point in coming months if Shopee successfully maintains its leading position via diligent spending while delivering a gradually improving monetization rate with narrowing EBITDA loss," she told clients. "Shopee could prove its execution, positioning it to achieve sustainable growth profitably. Together with steady gaming bookings on stable EBITDA margins while Fintech business delivers an improving profitability trend, Sea's fundamental outlook is likely to turn more promising." Shares advanced 2.1% before the bell following the upgrade. Yap's target implies the a change of course for the stock: Shares are near flat for 2024, but they lost more than 76% and 22% in 2022 and 2023, respectively. SE YTD mountain SE shares year to date — Alex Harring 6:30 a.m.: Analysts diverge on where Apple will go next following earnings Apple bucked the big tech trend, with analysts less upbeat and having less consensus on what's next following the technology giant's earnings report. Despite beating expectations on both lines for the fiscal first quarter, shares fell nearly 3% in Friday's premarket as investors keyed in on troubles in China and a weak outlook for iPhone sales. Apple CEO Tim Cook also signaled that the company could have an artificial intelligence-related announcement later this year. Analysts' expectations on the stock vary widely. Here's what a handful wrote to clients in response to the print: KeyBanc analyst Brandon Nispel kept his sector weight rating and has no price target: "F2Q24 guidance likely came in below expectations, and we believe expectations need to move lower, yet again. With investors focused on U.S. upgrade rates and China competition, both the Americas segment and China segment came in below expectations, and we do not believe the dynamics are likely to change in the near term. This, paired with AAPL's still premium valuation and limited growth, suggests that AAPL is likely to be range-bound and perform in line with the Nasdaq at best." Morgan Stanley analyst Erik Woodring remained overweight with a $220 price target, implying shares can rise 17.7% from Thursday's close: "In our view, bears will continue to argue that fundamentals do not support Apple's current valuation. But sentiment is already negatively skewed, and without a catalyst for derating ... we're not sure what 'breaks' the story. Instead, we see tonight's guide down as a clearing event (as we previewed). Meaning, Apple has now gotten its 'guide down' out of the way, and investors can now look to the June Worldwide Developer Conference, where we expect Apple to introduce its first Gen AI-enabled software upgrade, and the September iPhone 16 launch, as upside catalysts to help reaccelerate growth in FY25." Barclays analyst Tim Long is still underweight and shaved $2 off his price target to $158, meaning he believes shares can slide 15.4%: "AAPL has been in a historically bad run, with y/y revenue declines in all four quarters of FY23, and 1HFY24 looking down y/y as well. We see nothing in the pipeline to help improve the numbers, which over time should pressure the multiple. ... Near term, we expect heightened macro uncertainty and demand weakness to remain an overhang. We think the elevated P/E multiple is harder to justify given limited estimates upgrade potential." Piper Sandler analyst Harsh Kumar stayed neutral but cut his price target by $15 to $190, now implying the stock can climb just 1.7% from Thursday's close: "Apple reported what we thought was an exceptionally clean and well run December quarter. However, given the tough Y/Y comparison, things look to us more challenging for the upcoming March quarter. We still believe that fundamentals remain strong as the brand continues to grow with the launch of the Vision Pro." — Alex Harring 5:57 a.m.: Analysts see big gains ahead for Meta following earnings report Meta appears have to given investors a buffet of reasons to buy into the stock. There's the better-than-expected quarterly financial results, the tripling of profit, the first-ever dividend, the expectation of muted hiring for the longer term and the focus on artificial intelligence. Shares soared more than 16% before the bell on Friday. Here's what got analysts particularly excited and catalyzed many to make significant increases to target prices: Barclays analyst Ross Sandler reiterated his overweight while raising his price target by $150 to $550, now implying an upside of 39.3% from Thursday's close: "The META story continues to shine relative to mega cap tech, and we think the winning streak can continue for the foreseeable future, attracting more long-term investors (yes, we still think META is under-owned vs. peers)." Deutsche Bank analyst Benjamin Black kept his buy rating while increasing his target to $525 from $450, which now reflects a 33% upside over Thursday's closing level: "Looking back just one year, we believe the company has clearly demonstrated strong execution, decisive cost discipline, and in our view has significantly built credibility in its ability to successfully navigate a challenging environment and has now positioned the company for durable growth." Stifel analyst Mark Kelley has a buy rating and raised his price target to $527 from $405, now showing a 33.5% upside: "The company is firing on all cylinders and continues to hammer home the notion that this will be a more efficient and leaner organization going forward, despite the heavy AI investment cycle that is well underway. Commentary across Reels, Advantage+, and Shopping were positive, and we expect the next wave of advertiser-focused AI tools to keep this momentum going. The icing on the cake is the dividend that will bring in a new class of investors, and should enable another re-rating for shares." Bernstein analyst Mark Shmulik, who has an outperform rating and upped his target by $100 to $535, which now reflects a 35.5% upside: " Revenue growth and guidance likely put to rest the biggest hangup of owning Meta into decelerating growth, but we were more impressed with the long-term vision laid out. Skeptics like to question 'who still uses Facebook?', but the Facebook app continues to grow users across all regions adapting to changing consumer tastes and needs, Meta's family of apps continues to expand (Threads, Quest), while newer AI initiatives show the promise of a durable future. Perhaps just like the famed Patek slogan, 'you never actually own Meta's stock, you merely look after it for the next generation'." — Alex Harring 5:45 a.m.: Wall Street sees a lot to like in Amazon's earnings report Amazon surpassed earnings expectations for the fourth quarter, sending shares up more than 6% before the bell Friday and garnering praise from Wall Street analysts. The e-commerce giant earned $1 per share on revenue of $170 billion in the quarter, while analysts polled by LSEG anticipated 80 cents and $166.2 billion. Amazon also announced Rufus , a shopping assistant that utilizes artificial intelligence. Many analysts showed bullish sentiment following the reports through increased price targets. Here's what some told clients: Goldman Sachs analyst Eric Sheridan, who reiterated his buy rating and raised his price target by $20 to $220, now implying upside of 38.1%: "We continue to see Amazon positioned as a leader in all aspects of secular growth within our Internet coverage. ... In total, every key metric that Amazon is measured against exceeded expectations and we come away from this earnings report with an increased confidence interval in our medium/long term thesis of Amazon's key platform drivers." Bernstein analyst Mark Shmulik, who kept his outperform rating and hiked his target price $25 to $200, 25.6% above Thursday's closing level: "After stressing over what the Amazon results would be post Google sell-off, we read the earnings press release with gusto. Every number we checked looked good." Morgan Stanley analyst Brian Nowak, still overweight with a raised price target by $15 to $200, once again implying a 25.6% upside: " AMZN's results and guide speak to how improving execution, cost discipline, and an AWS recovery are leading to outsized EBIT and free cash flow revisions." RBC Capital Markets analyst Brad Erickson, who still has an outperform rating and raised his target for shares by $35 to $215, reflecting a 35% upside: "Better-than-feared AWS growth and meaningful EBIT upside put AMZN on the doorstep of unlocking tens of billions of free cash flow over the next few years which bulls have been waiting for. Most encouraging to us is that in spite of strong numbers where Street EBIT estimates should move solidly higher, several of the most important, incremental drivers have really only just begun." — Alex Harring 5:45 a.m.: Bank of America hikes Nvidia price target Don't expect Nvidia to lose momentum anytime soon, according to Bank of America. BofA analyst Vivek Arya raised his price target on Nvidia to $800 from $700 per share, while reiterating his buy rating on the stock and calling for a strong fourth quarter report later this month. The new target implies upside of nearly 27%. "Early days, but results from top US cloud customers suggest solid motivation for spending in genAI," the analyst wrote. "Enterprise genAI adoption has yet to kick off and become more material in CY25, with NVDA benefitting from its widespread availability on public clouds, and unique partnerships with ServiceNow, SAP, VMWare, Dell, HPE and others." Nvidia, the best-performing S & P 500 stock of 2023, is off to a roaring start this year, soaring 27%. NVDA YTD mountain NVDA year to date — Fred Imbert