Friday's analyst calls: Nvidia earnings preview, Morgan Stanley chip stock upgrade
(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.) Chipmakers were front and center among analysts Friday. Morgan Stanley raised its rating on Analog Devices to overweight from equal weight, noting the company can outperform in a tougher market next year. Meanwhile, Piper Sandler raised its data centers revenue guidance on Nvidia ahead of the company's earnings report next week. Check out the latest calls and chatter below. 8:36 a.m. ET: HSBC says buy Intuitive Surgical Intuitive Surgical's strong defensive position supports a premium valuation, HSBC says. "It's an expensive stock but we like the business model and Intuitive's strong competitive edge," said HSBC Global Research analyst Helen Fang, as she initiates shares of the company at a buy Friday. Intuitive Surgical's da Vinci surgical robot has an 80% global market share and 70%-plus of its revenue is recurring. This might be part of the reason why the stock is up nearly 15% year to date while other medical device shares have swooned in recent months. Fang has a $318 price target, which suggest 8.5% upside from here. Fang said she likes the company's strong defensive position, which supports its premium valuation, and sees catalysts ahead that could drive shares even higher. Sales will get a boost as the da Vinci system expands the number of operations it can perform outside the U.S. and its leasing program grows. Intuitive's new Ion endoluminal system, which performs lung biopsies, will diversify its revenue, Fang added. — Christina Cheddar Berk 8:34 a.m. ET: UBS downgrades Agilent Technologies, citing pressures in China Regional deterioration in China could pressure forecasts of Agilent Technologies, according to UBS. The firm downgraded the tech and electronics stock on Friday from buy to neutral, citing overexposure to regional headwinds in China, instrument demand normalization, and softening cyclical spend. Shares were down about 1% premarket. "The company remains exposed to macroeconomically cyclical industrials, a sector likely to be pressured by expectations of subdued economic growth in 2024," UBS analyst Dan Leonard said in a note. "We believe Agilent deserves credit for its improving business mix (e.g., addition of secular drivers in cell analysis, growing nucleic acid API business, outsized services growth), but the confluence of current challenges is unique and we prefer to step to the sidelines." About 20% of the company's sales come from China, where lack of government stimulus, anti-corruption efforts, reshoring, and limited funding availability have pressured biopharma, Leonard said. About 40% of its sales come from analytical instruments, which enjoyed a period of double digit demand between 2021 and 2022 that is now normalizing, Leonard added. He sees a year of flat-to-down instrument sales in 2024. — Tanaya Macheel 8:26 a.m. ET: CareMax downgraded at UBS and price target slashed 80% to $1 CareMax was lowered to neutral from buy and its price target slashed to $1 from $5 by UBS analyst AJ Rice, who said the Medicare Advantage provider is being hurt by "the current high-utilization environment" that's raising its near-term medical loss ratio and forcing it to cut back on investment. — Scott Schnipper 8:03 a.m. ET: Expedia shares can rise more than 50%, Evercore ISI says Expedia is a buying opportunity that can rise more than 50% from here, Evercore ISI said. Analyst Mark Mahaney on Thursday upgraded shares of Expedia to outperform from in line and hiked his price target, saying the travel company will likely start accelerating revenue growth and margin expansion next year. "1) We view EXPE to be at a fundamental inflection point, with probable revenue growth acceleration and EBITDA Margin expansion in 2024, and this is not captured in current Street estimates," Mahaney wrote to clients. Expedia shares are up by 48% this year. The analyst's $200 price target, hiked from $135 per share, represents 54% upside from Thursday's close. The stock popped more than 3% in Friday premarket trading. — Sarah Min 7:52 a.m. ET: RBC upgrades Brookdale Senior Living An aging U.S. population should help demand grow for Brookdale Senior Living , according to RBC. The firm upgraded shares to outperform from sector perform in a Thursday note. It also raised its price target to $9 from $7, which implies shares rallying 99.1% from Thursday's close. "With improving fundamentals and favorable supply and demand characteristics expected to persist for the next several years, we are taking the opportunity to upgrade BKD to Outperform following strong 3Q results," analyst Ben Hendrix wrote. Hendrix added that the company has an "underappreciated" path to margin expansion, and believes risk from high rates is manageable on improving fundamentals. Shares jumped 3.3% Friday before the bell. The stock has rallied more than 65% year to date. — Hakyung Kim 7:42 a.m. ET: Bank of America downgrade beaten-down Marriott Vacations stock to underperform Marriott Vacations Worldwide faces multiple risks from here on out, according to Bank of America. Analyst Shaun Kelley downgraded the stock to underperform from neutral and slashed his price target to $65 from $125. The new target implies shares could lose about 20.2% over the next 12 months. "Leisure/resort spending has emerged as a COVID 'beneficiary' in travel and seems to be normalizing across most of VAC's segments," Kelley wrote in a Friday note about the challenges weighing on Marriott. "Recovering tour flow, strong VPG, low development and execution have all led to record margins and these are now normalizing, pressuring margins going forward." Higher interest rates affecting the company's financing businesses, as well as higher costs in rental and exchange markets, are also headwinds, according to the analyst. Marriott had cut its full-year guidance by $140 million due to lower contract sales and softer rental business. Shares shed 2.1% in Friday premarket trading. The stock has lost more than 39% so far this year. – Pia Singh 7:01 a.m. ET: Analysts downgrade ChargePoint to neutral after third-quarter guidance cut, management shakeup Some analysts downgraded ChargePoint after the electric vehicle charging company slashed its third-quarter revenue guidance. Roth MKM downgraded the company to neutral from buy and cut its price target by $9 to $2. That implies the stock could fall 36% from Thursday's close. Janney, meanwhile, downgraded ChargePoint and assigned a price target of $5, which implies roughly 59% potential upside. Stifel, on the other hand, kept its buy rating and $10 price target based on its long-term view of the stock. It favors ChargePoint due to its current market leadership over 70% among networked level two charging, among other factors. Shares plunged more than 27% in early trading Friday on the back of a sudden CEO change and disappointing guidance, which the company's management attributed to pressure on North America and Europe segments caused by broader macroeconomic conditions and fleet and commercial vehicle delivery delays. "CHPT will post weak F3Q24 results on generally weak macro demand for EV charging hardware from below-trend EV sales velocity…We believe the recent capital raise is insufficient to support mgmt's planned path to profitability," Roth MKM analyst Craig Irwin said. "We could look to turn constructive on an improved growth trajectory with longer-term profit visibility." — Pia Singh 6:16 a.m. ET: Citi upgrades Zoom Video on signs of potential near-term stabilization Citi has a cautiously optimistic outlook on pandemic darling Zoom Video Communications . The firm upgraded Zoom to a neutral rating from sell and maintained its 12-month price target of $66, which suggests only 4.1% upside for the stock. "We see more balanced risk/reward with the stock sitting below our target price and near trough multiples, with most of our downgrade concerns playing out," analyst Tyler Radke said. "We are also watching potential for [near]-term stabilization to play out with a conservative guide that assumes macro deterioration and web traffic signaling some incremental improvement." The company also continues to face significant risks, Radke added, such as looming competition from Microsoft, lack of pricing power and peaking margins and declining efficiency. Shares edged 1.9% higher in premarket trading Friday. The stock is down more than 6% for the year. — Pia Singh 6:13 a.m. ET: Evercore ISI downgrades Airbnb on 'less compelling risk/reward outlook' Looking to next year, Airbnb's growth story may be limited, according to Evercore ISI. Analyst Mark Mahaney downgraded shares to in-line from outperform, saying he sees a less compelling risk/reward outlook on the stock at its current price. The analyst's price target of $136 implies shares could still jump about 7.7% from Thursday's close. The stock shed 1% in Friday early morning trading. "We remain impressed by the fundamental strength of this business, and we are keeping our estimates & price target unchanged, but we see limited near-term catalysts to drive material upside to the current price tag," Mahaney wrote in a Thursday note. Shares of Airbnb have gained more than 47% this year — a rally that Mahaney said is "well warranted, with reasonably robust topline growth against very tough comps from last year and profitability improvement (with record high EBITDA margin in Q3)." ABNB YTD mountain ABNB in 2023 Moving forward, however, the analyst said he expects modestly softening travel demand into next year, which could weigh on the company, as well as potential downward pressure on the stock with Airbnb's international expansion. More positively, he expects limited signs of a plateau in supply, even after Airbnb has grown listings supply by 19% year-over-year in the third quarter. Instead of Airbnb, the firm said it prefers peers Booking and Expedia on its buy list. — Pia Singh 5:48 a.m. ET: Morgan Stanley upgrades Analog Devices, says it can outperform a weaker 2024 market Morgan Stanley thinks Analog Devices is a safe play amid an impending market slowdown. Analyst Joseph Moore upgraded the semiconductor manufacturer to overweight from equal weight and upped his price target on the stock by $49 to $225. The new target implies shares can gain up to 25.1% over the next 12 months. "As we enter the later stages of a downcycle, we cut numbers on ADI—but upgrade the stock as the severity of the current downturn should point to a bottom in 2Q24—down 20-25% from peak," Moore wrote in a Thursday note. Two reasons behind the overweight rating include: The chip company has outperformed peers in the past three down cycles due to resilient gross margin levels Analog's forward earnings are "de-risked" after guide-downs from the company The analyst noted material deterioration in communications infrastructure and said he expects the company's quarterly revenues to fall 23% in the first quarter of next year, however, adding that the firm also anticipates a market bottom in May. Shares added 2.6% in premarket trading Friday. — Pia Singh 5:48 a.m. ET: Piper Sandler raises Nvidia data centers revenue estimates Piper Sandler is optimistic Nvidia can deliver strong quarterly results next week thanks to strong revenue from a key segment. The firm raised its sales estimates for the chipmaker's data centers business for the third October and January quarters to $13 billion and $14.434 billion, respectively. "We believe demand from U.S. cloud and other data center clients remains strong and intact given these firms are still in the process of transforming their data centers with accelerated compute capabilities," analyst Harsh Kumar wrote. "We note these include all of the key players in the cloud industry as well as GPUaaS startups which are also providing tailwinds to demand." Nvidia is set to report earnings Tuesday. Kumar has an overweight rating on the stock and a price target of $620, implying upside of 25%. NVDA YTD mountain NVDA in 2023 — Fred Imbert