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(This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Two megacap stocks were in focus Wednesday after some major calls made by analysts. On a positive note, Bank of America raised its price target on Nvidia to $1,100, implying gains of nearly 20%. On the other hand, Wells Fargo downgraded Tesla to underweight from equal weight. Check out the latest calls and chatter below. All times ET. 7:02 a.m.: Baird: Texas Roadhouse shares can reach new heights Baird has an appetite for Texas Roadhouse shares, even as the restaurant chain’s stock sits near record highs. Analyst David Tarantino upgraded his rating to outperform and added $15 to his price target, bringing it to $175. Tarantino’s new target now reflects the potential for shares to climb 16.1% from Tuesday’s and notch a fresh all-time high. Tarantino said the Kentucky-based company should be able to maintain relatively strong traffic, one of a handful of catalysts he sees pushing the stock up over the next year. That comes as he said same-store traffic performance will likely become a key indicator of profitability this year. “While not our typical approach to upgrade stocks that are close to all-time highs, we argue that TXRH still may have plenty of room to run even when factoring in the recent strength,” Tarantino wrote to clients. “Specifically, we believe continued signs of standout same-store traffic performance along with progress on improving profitability in 2024 will help to support positive investor sentiment and premium valuation metrics.” Tarantino went on to point out Texas Roadhouse’s solid near-term outlook and potential for strong growth over the next several years. He also said the stock has a solid outlook for the current year from a fundamental perspective, while noting investors can expect a good first-quarter earnings report. Texas Roadhouse shares have jumped more than 23% so far this year and recorded a new closing high earlier this month. That marks another period of outperforming the market after the stock climbed more than 34% in 2023. TXRH ALL mountain TXRH — Alex Harring 6:47 a.m.: Coinbase can rally nearly 20% as investors enter crypto funds, JMP says Coinbase can benefit as investors continue buying into bitcoin ETFs, according to investment firm JMP. Analyst Devin Ryan reiterated his market outperform rating on the digital currency trading platform and increased his price target by $80 to $300. Ryan’s new target implies shares can add another 17.1%. “We view Coinbase (and a small group of its peers) as significant beneficiaries of the additional capital flows we see moving into the space,” he said. Ryan expects $220 billion of inflows to the several ETFs focused on spot Bitcoin, which launched earlier this year. That’s “multiples” of the approximately $10 billion investors have already poured in, meaning it’s just “the tip of the iceberg,” Ryan said. Specifically, Ryan said Coinbase is well positioned to participate in many areas of growth within the digital asset space. It’s part of an industry that has a small number of companies with both the technical expertise and scale to fire on multiple cylinders, the analyst noted. Ryan said the excitement around the ETFs has been a key driver of Coinbase’s nearly 50% rally this year. He said the stock has a “compelling” upside case and fair valuation, while warning that traders should position with risks in mind. COIN YTD mountain COIN year to date — Alex Harring 6:28 a.m.: Shoemaker can soar nearly 80% following post-earnings tumble, UBS says On Holding’s post-earnings slide creates a good place for investors to snap up shares, UBS said. Analyst Jay Sole reiterated his buy rating, while adding $4 to his price target. Sole’s new $55 target implies shares can now rally 79.5%. The athletic shoemaker fell nearly 9% Tuesday after missing fourth-quarter earnings and revenue expectations. But Sole said there’s little reason for actual alarm in the release, and the sell off created an even better place to buy in. “We believe ONON’s shares fell 9% over the 4Q earnings report … largely due to near-term noise around FX headwinds, rather than any structural issues with the company or our Buy thesis,” Sole said. “Therefore, we see this weakness as an attractive buying opportunity of ONON shares.” In fact, Sole said the report actually showed “robust underlying demand trends,” including through a strong holiday season. Going forward, he said On should see industry-leading sales growth and earnings beats due to the focus on direct-to-consumer and the full-priced brand image, among other things. Despite Tuesday’s drop, shares are still up more than 13% in 2024. — Alex Harring 6:06 a.m.: Super Micro shares can add another 10%, BofA predicts Super Micro Computer has more room to run, Bank of America said. Analyst Ruplu Bhattacharya upped his price target by $240 to $1,280, now implying upside of 10.1% from Tuesday’s close. Bhattacharya also reiterated his buy rating. “We expect SMCI to continue to see strong revenue growth given server demand from applications including Artificial Intelligence (AI), High Performance Computing (HPC), big data analytics, engineering/technical workloads, streaming and content delivery, and compute-intensive graphics and online gaming,” he told clients. Bhattacharya’s call comes amid rising expectations for growth in the broader AI server industry as the technological craze continues. He now said the industry should grow from $39 billion to around $200 billion between 2023 and 2027. His new target price also offers reassurance that the stock hasn’t run up too far too fast. Super Micro shares have already surged more than 300% this year, adding to 2023’s jump of more than 240%. SMCI 1Y mountain SMCI in past year To be sure, Bhattacharya noted risks such as the availability of graphics processing units, pricing pressure from competition, or changes to margins or valuation that can all impact the stock’s performance. He also said the stock could re-rate lower if growth expectations don’t materialize. — Alex Harring 5:44 a.m.: Southwest has more downside on the horizon, Jefferies warns Southwest shares look like a better deal following Tuesday’s sell-off, but the airline could see more downside ahead, according to Jefferies. Analyst Sheila Kahyaoglu upgraded the airline stock to hold from underperform and raised her price target by $8 to $28. Still, her new price target implies shares will slid another 2.6% — even after Tuesday’s big drop. Shares dived nearly 15% in Tuesday’s session for its worst day since 2020 after the company reported delays from Boeing, its sole plane provider. As a result, Southwest said it was rethinking all 2024 full-year guidance. Tuesday’s move down “finds a floor,” Kahyaoglu said. That’s because the four or more points of revenues per available seat mile was “always overly ambitious forecasting vs demand.” While fewer planes will hurt available seat miles, it should help cost per each of those miles outside of summer as hiring presents an offset. Free cash flow should also improve, the analyst added. Following Tuesday’s slide, Southwest shares are trading modestly below flat on the year. — Alex Harring 5:36 a.m.: BofA says Nvidia shares can climb to $1,100 Bank of America is increasingly bullish on Nvidia ahead of a technology conference deemed the Woodstock of artificial intelligence. Analyst Vivek Arya raised his price target for the chipmaker to $1,110 from $925, with the new target implying a 19.7% upside over Tuesday’s close. Arya also reiterated his buy rating. “Our $1100 PO is based on 37x CY25E PE ex cash, within NVDA’s historical 26x-69x forward year PE range, justified given stronger growth opportunities ahead as gaming cycle troughs and data center demand potentially faces strong, long-term demand dynamics,” Arya wrote to clients. Arya’s call comes ahead of the closely watched GPU Tech Conference, or the “Woodstock” of AI, during which Arya expects Nvidia to showcase: The growing importance of generative AI, as well as omniverse and digital twins, across end markets. The potential to improve a global computing infrastructure valued ay between $1 trillion and $2 trillion with accelerators, growing the market over the next three to five years. Updates to the pipeline of products including accelerators, ethernet switches, data processing units and edge AI. Work on monetization within software and services businesses. New use-cases within business and sovereign countries. The analyst also said the stock’s valuation and ownership levels show the potential for upside. Notably, he said Nvidia stock is at a lower forward price-to-earnings multiple today than when ChatGPT was launched. Despite recent cooling, Nvidia has soared in recent months amid the AI craze. Shares are up more than 85% in 2024, extending gains of more than 230% recorded last year. — Alex Harring 5:36 a.m.: Wells Fargo downgrades Tesla Wells Fargo is throwing in the towel on Tesla for now. Analyst Colin Langan downgraded the electric vehicle maker to underweight from equal weight. He also cut his price target to $125 from $200. The new forecast implies downside of 29.5% from Tuesday’s close. Shares fell more than 1% in the premarket following the downgrade. “We see downside risk to volume as price cuts are having a diminishing impact. We see headwinds from disappointing deliveries & more price cuts, which likely drive negative EPS revisions,” Langan wrote. “TSLA’s growth in core markets has moderated with EU & China flattish in the LTM & the US down since Q2. More concerning, the effect of price cuts are moderating with 2H volume up only 3% [half over half] despite pricing that’s down 5% h/h,” he added. “We expect volumes to be flat in 2024 & down in 2025. In the wake of [price] cuts are lower lease residuals, disgruntled customers & the possible loss of the luxury brand premium.” Tesla shares have languished in 2024, losing more than 28% as demand for electric vehicles wanes. Last year, the stock surged more than 100%. TSLA 1Y mountain TSLA one-year chart — Fred Imbert
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