(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Early analyst calls on Tuesday included upgrades to two solar names and a pet stock getting a buy rating from Jefferies. Piper Sandler raised its rating on Sunnova and Sunrun to overweight from equal weight, citing in part the potential for Federal Reserve rate cuts. Meanwhile, Jefferies initiated coverage of Elanco on a positive note, saying key catalyst can lift the stock. Check out the latest calls and chatter below. 6:07 a.m. ET: TD Cowen names its top solar energy picks First Solar and Shoals Technologies are TD Cowen’s top utility solar ideas for 2024. “We highlight residential solar fundamentals continue to deteriorate while U.S. utility scale remains more resilient,” analyst Jeffrey Osborne wrote in a Tuesday note. “U.S. utility fundamentals appear more encouraging based on our review of satellite imagery data and a healthy pipeline, which supports FSLR and SHLS.” TD Cowen has an outperform rating on both First Solar and Shoals Technologies. Osborne’s $250 price target on First Solar implies a 48% rally from where shares closed on Monday. Meanwhile, his price target of $30 on Shoals Technologies indicates shares could surge 90%. To be sure, Osborne expects volatility in the solar sector will continue next year despite the Federal Reserve’s indication of three rate cuts to come. Election cycles have also historically “soured” investor sentiment on the solar space, according to the analyst. First Solar shares are up 10.8% year to date, while Shoals is down 36%. — Hakyung Kim 5:57 a.m. ET: JPMorgan downgrades PepsiCo PepsiCo has had a strong record, but JPMorgan thinks some normalization may be ahead for the stock. Analyst Andrea Teixeira downgraded shares to neutral from overweight. Teixeira also reduced the price target on shares to $176 from $185, implying 9.5% upside from Monday’s close. “We don’t see anything fundamentally wrong with PEP and continue to have confidence that the company is well positioned to deliver on its 2024 outlook,” Teixeira said. “That said, we see the magnitude of upward estimate revisions as narrowing and see better opportunity within Beverages for OW-rated KO and KDP, which we expect to have a higher quality composition of top-line growth in CY24 and also don’t have the narrative overhang,” she added. The company has also faced earnings headwinds, in absolute terms, from a strong dollar in the past few years, the analyst noted. The stock dipped 0.6% Tuesday before the bell. Shares are down more than 6% year to date. — Hakyung Kim 5:37 a.m. ET: Piper Sandler upgrades Sunnova, Sunrun Renewable energy companies Sunrun and Sunnova could benefit from the Federal Reserve’s “pivot,” according to Piper Sandler. The firm upgraded shares of the two solar companies to overweight from neutral. Analyst Kashy Harrison thinks the three rate cuts the Fed indicated at its last policy meeting could be a key theme for the two solar companies. The renewable energy sector is highly sensitive to rates, meaning that Sunrun and Sunnova have struggled this year and are down 24.9% and 26.9%, respectively. RUN NOVA YTD mountain RUN and NOVA in 2023 “While the Fed pivot is undoubtedly positive, it is no ex-machina for all of our coverage’s 2023 challenges and some sub-sectors benefit more than others. We view the resi installers as the largest/immediate beneficiaries of lower rates,” Harrison wrote, referring to the two companies. Harrison raised her price target on Sunnova shares to $26 from $13, suggesting shares could essentially double from Monday’s close. She also increased her price target on Sunrun to $31 from $15, implying nearly 72% upside potential. “With lower rates, we expect equity appreciation given asset valuation sensitivity to rates,” Harrison added. — Hakyung Kim 5:37 a.m. ET: Jefferies says buy Elanco The firm initiated coverage of the pets pharmaceutical stock with a buy rating and a price target of $17, implying upside of 24% over the next 12 months. Elanco shares have lagged the broader market this year, rising just 11.9% in that time, while the S & P 500 is up 23.5%. However, analyst Glen Santangelo thinks potential “blockbuster launches, coupled w/improving execution, creates an attractive setup into ’24 against backdrop of a discounted valuation.” “We see ELAN entering 2024 w/ increased optimism given a multitude of impending product launches (Zenrelia, Credelio Quattro, Bovaer),” he said. Zenrelia is a product used in canine dermatology, while Credelio Quattro fights off ticks and kills fleas. Bovaer is a cow feed that looks to reduce methane emissions. “We expect this pipeline to bolster the recent inflection to growth and are encouraged by mgmt’s commitment to growth in 4Q and 2024,” Santangelo said. “[Long-term] we think these launches could improve the product mix … driving both rev growth and margin expansion.” — Fred Imbert
