Monday's analyst calls: PC stock and travel play get upgrades, Goldman Sachs turning a corner
(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.) A slew of stocks got positive analyst notes to start the week. Citi upgraded HP Inc. on reduced costs and an improving PC market outlook. Meanwhile, Bernstein raised its rating on TripAdvisor to outperform. Bank of America was also positive on Goldman Sachs, noting the banking giant's CEO is turning a corner. Check out the latest calls and chatter below. 9:39 a.m. ET: Piper Sandler upgrades Health Catalyst Managed health care IT services provider Health Catalyst was upgraded to overweight from neutral at Piper Sandler, which cited recent results topping consensus estimates and optimism over HCAT's tech-enabled managed services (TEMS). Piper cut its price target about 8% to $11 from $12, that still represents 64% potential appreciation against Friday's close. "HCAT is bolstering its product portfolio via [tuck-in acquisitions] nd engaging in cost-saving initiatives to support accelerating growth and profitability," analyst Jessica Tassan wrote. "HCAT has established the product portfolio and operating infrastructure to capitalize on the improving hospital end market," she added. — Scott Schnipper 9:26 a.m. ET: Wolfe says Plug Power faces 'significant execution risk' Wolfe Research downgraded Plug Power late Friday to peer perform from outperform amid concerns over the clean energy company's ability to finance its projects. Plug Power ended the quarter with $110.8 million of unrestricted cash, down from $690.6 million at the start of the year and needs to raise capital in 2024, analyst Steve Fleishman wrote in a note to clients. "PLUG has not met key financial or operational targets this year and this further amplifies the execution risk on financing alternatives and operations," he said. Fleishman also removed his $15 price target, saying it is difficult to value the stock right now. Shares tumbled 40% on Friday following the company's earnings and revenue miss after the bell Thursday. On Friday, Plug Power said in a filing it does not have sufficient funds for its operations through the next 12 months, which raises "substantial doubt about the Company's ability to continue as a going concern." — Michelle Fox 9:17 a.m. ET: Jefferies initiates Celsius, sees 25% upside Jefferies says pre-workout drink maker Celsius has a lot of growth opportunity in the fast growing "Energy+" category, which includes sports drinks and ready-to-drink tea and coffee products. According to Jefferies, Energy+ is an $81 billion category, 3.6 times larger than energy drinks alone, and expected to grown $5 billion, or 6%, annually. The company's "broad appeal" justifies looking at the opportunity, Jefferies analyst Kaumil Gajrawala said in a note Monday. "A wide demographic profile and consumers' increasing focus on health, wellness and function gives us comfort that Celsius has a long growth runway," Gajrawala said. "We estimate sales +26% CAGR from '23-'27." The firm initiated coverage of the stock with a buy rating and $217 price target, which implies more than 25% upside in the shares based on their closing price Friday. Gajrawala also highlighted Celsius' improved distribution, calling it a "game changer" with the potential Celsius to gain substantial market share and drive incremental growth through food service. The company is also expanding to Canada and Europe, which is a "sizable" opportunity for it, according to Jefferies. — Tanaya Macheel 9:04 a.m. ET: Mirum Pharmaceuticals is poised to more than double as its liver disease treatment takes off, Morgan Stanley says Morgan Stanley says biotech Mirum Pharmaceuticals could see its stock more than double as mometum builds behind the launch of Livmarli. The company is a leading developer of treatments for rare liver diseases, and has a "track record of success," said analyst Michael Ulz. He initiated coverage of the stock at an overweight rating and set a $60 price target, which implies 110% upside for the shares. Ulz sees several opportunities for Mirum to expand the use of Livmarli to other conditions, one of which is already under review and could receive regulatory approval by the end of the first quarter of 2024. He predicts peak sales of the drug could be about $1 billion. Further upside could come from a second compound the company is studying, Ulz said. Data from its phase 2b trial will be presented in the first half of next year. — Christina Cheddar Berk 8:31 a.m. ET: Shares of Crocs could nearly double, according to Baird Baird is bullish on Crocs heading into 2024, maintaining its outperform rating and $155 price target on the stock. The firm's new target suggests the lifestyle footwear retailer could jump 94.5% over the next 12 months. "Shorter-term, Crocs' strong Q3 performance (global DTC +18%), robust product innovation pipeline, and positive 1H24E orders– in contrast many peers – are supporting high confidence entering 2024E," Baird analyst Jonathan Komp wrote in a Friday note. "We see significant upside to full-year 2024E consensus earnings setting the stage for positive revisions." The company's "multi-year runway" is supported by three factors, Komp said, including: Frequent and unique product innovation, and greater marketing scale with consumers across markets interested in new Croc products Strong international opportunity with multiple focus markets, including Western Europe and India, inflecting Structurally high gross margin which drives continued brand investments — Pia Singh — Pia Singh 8:30 a.m. ET: There's still room to run for Starbucks, BMO says Shares of Starbucks still have upside after jumping more than 14% since the coffee chain's quarterly report on Nov. 2, according to BMO Capital Markets analyst Andrew Strelzik. "Even after the market's favorable reaction, shares are trading at a reasonable 22x P/E on implied FY25 EPS, assuming only the low end of the 15%+ growth expectations in FY24 and FY25. At the same time, SBUX's lowered comp expectations and cost savings opportunity should increase confidence in SBUX's ability to achieve its growth targets even in the event of some volatility in top-line trends," Strelzik said in a note to clients. In conjunction with its fourth-quarter earnings release earlier this month, Starbucks announced a "triple shot reinvention strategy" to enhance long-term growth. While the updated outlook lowered projected growth rates, the new metrics could create an environment where the company can please investors, BMO said. "Lowering comp expectations to 5%+ is prudent given the evolving consumer spending environments in the key U.S. and China markets, but remains a strong level of growth for a system its size (implies ~$1.5+ billion of incremental sales annually from company-owned stores). Additionally, the update creates a lower hurdle for China's recovery cadence," the note said. Strelzik has an outperform rating on Starbucks, with a price target of $125 per share. That is about 20% above where Starbucks closed on Friday. — Jesse Pound 8:18 a.m. ET: Investors should take Anheuser-Busch out of the 'penalty box,' Evercore ISI says Bud Light parent Anheuser-Busch InBev is trading at a discount that is too cheap to ignore, according to Evercore ISI. Analyst Robert Ottenstein said in a note to clients Monday that AB Inbev is one of the beer stocks that trades at a significant discount to soft drink stocks like Coca-Cola and Pepsi, even though the underlying businesses are similar. "The valuation disparity between ABI/Heineken and KO/PEP makes no sense on the pure economics. The brewers are too cheap," the note said. In the case of AB InBev, the stock trades at substantially lower valuations than Pepsi and Coca-Cola based on earnings and free cash multiples, according to Evercore ISI. Shares of AB Inbev have rallied over the past month, but are still down year to date, thanks in part to a controversy around the marketing of Bud Light. Ottenstein wrote that the company can cause its stock to rally by reducing debt and rebuilding its dividend. "Much like Bud Light, the ABI equity is in the penalty box, but with investors. What's different though, is that ABI has a clear path out," the note said. — Jesse Pound 8 a.m. ET: Truist says to buy Cintas given potential for margin upside Truist opened coverage on Cintas with a bullish outlook, as the firm sees strong earnings ahead. Analyst Jasper Bibb initiated coverage with a buy rating and $65 price target. Bib's target price implies a 17.2% upside from where the stock finished last week. "In our view, a return to normalized pricing increases and moderating input costs (labor, materials, fuel) could drive upside margin gains and FY26 consensus EPS 10%+ higher," Bibb told clients in a Monday note. "Valuation is relatively rich, but we believe a premium multiple is justified by business quality, growth prospects and management's track record of value creation." Bibb called Cintas a "leading provider" with about 40% of market share in the rental uniforms business. He also said the company has one of the best models in the industrial services sector, while noting the First Aid and Fire businesses in particular have long growth runways. — Alex Harring 7:44 a.m. ET: Bank of America touts Goldman Sachs, says David Solomon is 'turning a corner' Bank of America said Goldman Sachs is successfully executing a consumer pivot while optimizing capital which will continue to aid stock outperformance. Analyst Ebrahim Poonawala noted that shares of the investment bank have rebounded from third-quarter results in October, when the firm beat on both the top and bottom line. "We attribute this to the Street beginning to see the light at the end of the tunnel on the consumer pivot (marked most recently by news of a potential sale of the GM credit card portfolio), ongoing capital optimization via the sale of private investments (= lower stress capital buffer) and hopes (albeit diminished) for an investment banking rebound," Poonawala wrote in a Sunday note. — Brian Evan 7:28 a.m. ET: Morgan Stanley cuts Plug Power target price on 'uncertain path forward' Morgan Stanley thinks ongoing liquidity concerns will pressure Plug Power . The firm lowered its price target on the hydrogen fuel cell stock to $3.50 per share from $9 in a Monday note, or less than 1% downside from Friday's $3.53 close. Morgan Stanley reiterated an equal weight rating, however. "We expect valuation pressure will remain until the company, at a minimum, improves its liquidity position," analyst Andrew Percoco said. "We remain EW after the sharp sell-off in the shares last week, but believe the next 3- 4 months will be consequential in rebuilding investor confidence in the business model." Plug Power shares have taken a beating, losing 71%. PLUG YTD mountain PLUG — Brian Evans 7:10 a.m. ET: Edward Jones upgrades 'global leader' Oracle Edward Jones thinks Oracle's move to offer products on a subscription basis as opposed to licensing will jumpstart sales growth. The firm upgraded the software company to buy from hold in a Nov. 10 note. Analyst Logan Purk noted that Oracle has typically traded at a reasonable discount compared to peers, and a potentially $1 trillion cloud market opportunity will help foster future growth. "We think the company's transition from licensing its products to providing them on a subscription basis in the cloud will drive accelerated sales growth for the company," Purk said. "Further, we believe the overall profitability will improve as Center is full integrated and the company's cost structure is reduced. While Oracle has historically traded at a discount to peers, we think shares do not adequately reflect our improved sales growth." Oracle shares are up more than 38% in 2023. ORCL YTD mountain ORCL year to date — Brian Evans 6:23 a.m. ET: BTIG initiates GitLab, forecasts more than 25% upside BTIG is growing bullish on GitLab thanks to a product price increase earlier this year and partnerships with tech behemoths. The firm initiated coverage of DevOps stock on Monday with a buy rating and a $56 per share price target. BTIG's forecast implies more than 25% upside from Friday's close. "In short, we think GTLB is well positioned to gain share with its platform offering in a rapidly growing ~$40B DevSecOps target market," analyst Gray Powell said. "The company's product capabilities received high marks across multiple categories in our independent fieldwork." BTIG added that the bullish outlook is aided by potential partnerships with cloud services companies including Google and Amazon Web Services as the company grows. GitLab shares have rallied more than 55% over the past six months. For the year, however, they are down 1.8%. — Brian Evans 5:53 a.m. ET: Bernstein upgrades TripAdvisor on broadening revenue sources Bernstein said some key headwinds including concerns over meta-search hurting TripAdvisor have abated, clearing a path for the stock to go higher from here. The firm upgraded the online booking stock to outperform from market perform in a Monday note, and increased its price target to $21.40 from $14.80. Bernstein's price target implies more than 23% upside from Friday's close. TripAdvisor shares were up more than 1% in the premarket. The stock has also rallied more than 17% in November on the back of stronger-than-expected third-quarter results. TRIP mountain 2023-10-31 TRIP in November "Our key concern on TripAdvisor was that metasearch would be a material deleveraging drag on the business, and it would be a race against time to fund the growth of Viator," analyst Richard Clarke said. "Q3 changes that view - revenues ex-experiences/ dining declined just 1% YoY vs -4% in Q2 with metasearch's decline offset by strength in display marketing (up 15% YoY) and B2B - managements plan to make more money from more sources is working." — Brian Evans 5:43 a.m. ET: Citi upgrades HP Inc., sees nearly 20% upside Citi raised its rating on HP Inc. to buy from neutral Monday, hiking its price target to $33 per share from $31. "Our Buy thesis is predicated on: 1) continued improvements in PC ecosystem with inventory digestion completed, with potential for AI on PCs to drive higher revenue growth in outer years; 2) significant cost-takeout which we believe is supportive of margins and earnings recovery ahead; and 3) undemanding valuations and potential for higher FCF generation to drive higher buybacks," wrote analyst Asiya Merchant. HP Inc shares have rallied more than 7% in the fourth quarter, but they've fallen 15% over the past three months. HPQ 3M mountain HPQ in past 3 months 5:43 a.m. ET: Jefferies initiates Colgate-Palmolive as buy, sees 15% upside Jefferies thinks Colgate-Palmolive will have no difficulty outpacing peers. The firm initiated coverage of the consumer giant with a buy rating and a $87 per share price target in a Sunday note. Jefferies' forecast implies 15% upside from Friday's close. Analyst Kaumil Gajrawala said the company's market share losses from the height of the pandemic have stabilized, allowing Colgate-Palmolive to enter a period of steady growth. "Green shoots from years of reinvestments are starting to show (org sales +6% LTM, vs. 1-2% from 15'-18'), with solid flow through expected as macro pressures wane,' Gajrawala said. "We think these results are sustainable and draw a parallel to P & G's successful transformation." — Brian Evans