Here are Tuesday’s biggest analyst calls: Wells Fargo reiterates Tesla as equal weight Wells said reports that Tesla would make a bid for Sigma Lithium would “secure capacity & capture profits” for the automaker. “This would secure needed Li supply & capture margin. That said, the location likely won’t qualify for US IRA & there would be new operational risks.” UBS reiterates Apple as buy UBS said survey checks show interest in Apple TV+ has “flatlined.” “In the fourth annual survey, just ~22% iPhone owners subscribed to AppleTV+, essentially the same as the Jan 2020 data prior to Covid.” Bernstein reiterates Apple as market perform Bernstein said “Q2 revenues are not a slam dunk and FY 23 revenue growth will likely be negative” for Apple. “We see the biggest risks to Services growth as regulatory (Google payments and App Store), and any slowing of iPhone installed base growth from weaker sales and/or fewer switchers.” Baird names Amazon, Alphabet and Nvidia top A.I. picks Baird said companies such as Amazon, Alphabet and Nvidia will be key beneficiaries of AI. “While not an exhaustive list, given the many hundreds of companies that fall within our sectors, we believe companies included here not only have advanced AI capabilities, but also will be key beneficiaries of the ‘tidal wave’ of AI across consumer and/or enterprise applications.” Bank of America downgrades Constellation Energy to neutral from buy Bank of America downgraded the energy company mainly on valuation. ” CEG is a consensus long due to its visible free cash flow generation but the latest increase in operating costs, maintenance capex, and nuclear fuel investment highlights that the Federal Production Tax Credit (PTC) only provides protection on the “pricing” element.” UBS downgrades DocuSign to sell from neutral UBS said in its downgrade of the stock that it’s concerned about dwindling growth. “We downgrade our rating on DocuSign to Sell from Neutral post last week’s announcement of a new 10% workforce reduction (after the 9% reduction in September) and based on a view that it sends a negative demand signal about FY24 growth that may not be factored in the stock.” Citi reiterates Target as buy Citi said it’s standing by its buy rating heading into Target earnings on Feb. 28. “Big picture, we believe there is gross margin recapture oppty in F23 but risk to sales against tough multi-year comparisons.” Raymond James reiterates Carvana as market perform Raymond James said it’s cautious heading into Carvana earnings later this week. “While CVNA had a tumultuous 2022 (down 98% for the year including a -41% in December), the stock has increased ~140% YTD in 2023 — returning to the$10-11 range, which we continue to believe is a fair value.” Deutsche Bank adds a catalyst call buy on Workday Deutsche said it’s bullish heading into the on-demand financial management software company’s earnings report later this month. “We’re expecting healthy F4Q results, very likely overachieving expected 24-mos Backlog growth of ~19% y/y, as our partner checks noticeably upticked from F3Q. From the field, we are hearing of healthy ME (Medium Enterprise) demand, much of which is purely incremental for WDAY , in some cases winning accounts with as few as 500 employees or less.” Piper Sandler upgrades Caleres to overweight from neutral Piper said in its upgrade of the footwear company that it sees “structural earnings gains.” “We are upgrading CAL to OW following the 2/15 pre-announcement underpinned by a 2023 earnings reset coupled with further confidence in EPS gains being structural in nature.” JPMorgan downgrades AutoNation to underweight from neutral JPMorgan said it sees a more balanced risk/reward for AutoNation . “However, we are not changing our 2025 normalized margin/EPS view yet, on which the sector has an overall balanced risk-reward at current levels.” Read more about this call here. Bank of America reiterates Meta as buy Bank of America said it’s bullish on the company’s recently announced Meta Verified subscription service. ” Meta continues to take more aggressive action to grow earnings in the year of efficiencies. We see subscription offering as a potential high margin business with marginal incremental costs.” Bank of America reiterates Alphabet as buy Bank of America said it’s standing by its buy rating despite the ChatGPT thread to Alphabet. “We have heard both mixed and credible opinions from well-informed investors on the ChatGPT threat to Alphabet , and we would expect Microsoft will perpetuate the overhang in the near term.” Truist downgrades Generac to hold from buy Truist said in its downgrade of the battery backup company that it sees macro headwinds. ” GNRC’s internal challenges, both related to its core home standby generator (HSB) business & emerging Clean Energy products business have been discussed by mgmt at length over the last several quarters, and we believe are well understood by the Street.” Read more about this call here . Goldman Sachs upgrades Vir Biotechnology to buy from neutral Goldman said it sees an attractive risk/reward for shares of Vir. “Compelling risk/reward for an underappreciated catalyst with the potential to drive a major new leg of growth.” Read more about this call here . JPMorgan reiterates Netflix as overweight JPMorgan said the password sharing crackdown creates near-term risk for Netflix. “Despite N-T pushback and confusion around NFLX’s one household approach, we expect the company to make select policy & customer service tweaks along the way, work through these headwinds (as it has before), and ultimately generate more revenue through the combination of Extra Members and standalone accounts.” Morgan Stanley reiterates Nvidia as equal weight Morgan Stanley raised its price target on the stock to $246 per share from $175 heading into earnings on Wednesday. “We see NVIDIA posting an in line quarter and outlook, with gaming recovering from the lows and the strategic nature of the company’s training offerings buffering them from data center weakness.” BMO reiterates Microsoft as market perform BMO said Microsoft is a key beneficiary of AI. “We think MSFT’s reach, scale, and access to data will help MSFT to develop and train AI models, and thus generate competitive differentiation.” Barclays reiterates Zoom as equal weight Barclays said expectations are low heading into Zoom earnings later this month. “We believe the ZM bear case is relatively understood by investors (a guide to flat YoY rev. growth or worse for FY24), and bulls are hoping for recent headcount reductions to support non-GAAP op. margin by ~300-400bps with FY24 revs. holding in better.”
