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(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.) Analysts kicked off the new year on Tuesday focusing on major tech companies. On one hand, Stifel called Nvidia one of it top plays for 2024 after a stellar performance in 2023. On a more negative note, Barclays downgraded Apple to underweight from equal weight, citing weakness around iPhone sales and other products. Check out the latest calls and chatter below. 7:29 a.m. ET: Citigroup shares could double over the next three years, according to Wells Fargo Wells Fargo analyst Mike Mayo increased his price target on Citigroup by $10 to $70, citing the Federal Reserve’s newer optimism on interest rate cuts this year and Citi’s restructuring efforts. The new price suggests that shares could jump more than 36% over the next 12 months. Mayo said the firm expects Citi’s stock price to double to $100 over the next three years. Earnings per share should double from $5 to $10 due to greater efficiency and buybacks, also aided by cost savings from Citi’s record headcount reduction and less transformation costs, according to the analyst. Citi’s management delayering, tech modernization, transition from dozens of universal banks to 5 LOBs, or lines of businesses, should all make Citi “more simple and profitable,” Mayo said in a Monday note. He added that earnings can accelerate long-term, between the end of 2024 and beyond, assuming Citi is successful in executing its multi-year restructuring efforts. Shares dipped 0.3% in premarket trading Tuesday. — Pia Singh 7:07 a.m. ET: Wells Fargo names Uber a top pick, sees room for EBITDA ‘rationalization’ in 2024 Wells Fargo analyst Ken Gawrelski reiterated rideshare company Uber as a top pick in the sector and upped his price target on the stock by $10 to $74, maintaining a positive view on delivery services trends heading into this year. Gawrelski’s new price suggests shares could jump 20.2% over the next year. Shares edged lower by 1.1% in premarket trading. The analyst said he sees “room for $400M of EBITDA rationalization in 2024” as Uber’s mix shift towards new categories, such as taxi services, are a lesser concern on margins this year than in previous quarters. Uber’s 2024-2026 stock repurchase capacity is an estimated $27 billion, Gawrelski noted, expecting a formal capital return framework introduced in the first half of next year. The company’s free cash flow generation should also pop from $3 billion last year to $8 billion in 2026, he said. — Pia Singh 6:55 a.m. ET: Loop Capital says Microsoft is one of the ‘best ideas’ for 2024, citing cloud and AI tailwinds Microsoft’s growth is poised to accelerate next year, according to Loop Capital. The firm assigned a $425 target price, indicating roughly 13% potential upside for the stock over the next 12 months. Shares shed 0.7% in premarket trading Tuesday. “We believe MSFT remains one of the best ways to play GenAI, which should also accelerate the current secular cloud workload/data migration trend and bolster the company’s position in the cybersecurity market,” analyst Yun Kim wrote in a Tuesday note. The tech giant’s Azure cloud computing business and generative AI products, including M365 Copilot, position the company to benefit from large enterprises that prefer to buy pre-packaged generative AI solutions as well as independent software vendors building out their AI solutions portfolio, Kim said. Azure’s growth should reaccelerate, driven by greater workload migrations into the cloud, the analyst added. Another tailwind for Microsoft’s growth is its cybersecurity business, which is getting a bump from Azure and generative AI product growth as customers are starting to standardize with the company’s entire security stack, according to Kim. — Pia Singh 6:36 a.m. ET: Estee Lauder downgraded by Deutsche Bank on China struggles, management risks Deutsche Bank downgraded Estee Lauder to hold from buy on near-term risk. The cosmetics giant is trading roughly in line with the firm’s $146 price target, analyst Steve Powers said in a Tuesday note. Shares could decline roughly 0.2% based on Friday’s close at $146.25. The stock dropped 1.3% in premarket trading. Although Powers said he continues to see long-term upside for the stock —particularly if the company’s Hainan/Korea inventories clear as expected by April 1 and its China performance subsequently improves, allowing Estee Lauder to heed its profit acceleration efforts — he also sees near-term downside risk if the China inventory and brand recovery is delayed and the U.S. market sees a slowdown. “Questions of management succession and/or possible M & A actions also present two-way risk at this point, in our view,” the analyst added. Estee Lauder’s stock price had plunged in 2023, erasing tens in billions of market value and leaving a rift between the founding family and board. — Pia Singh 6:17 a.m. ET: Goldman initiates Rollins as a buy, citing organic revenue growth Goldman Sachs thinks pest control services provider Rollins has an attractive upside potential. Analyst George Tong initiated coverage of Rollins with a buy rating and $49 price target, suggesting shares could gain about 12% over the next year. Shares gained about 6.7% over the past month. ROL 1M mountain ROL in past month “We believe ROL is a differentiated and leading provider of pest control services leveraged to strong route density, a unique multi-brand strategy that facilitates market share gains, and attractive business model characteristics including recurring revenues, defensiveness and operating leverage,” Tong wrote in a Monday note. The company’s organic revenue growth has seen a “structural step-up” from mid-single-digits between 2008 and 2020 to high-single-digits since 2021, Tong said. That growth has been driven by an expanded brand portfolio, as Rollins has dozens of local and national brands in addition to its popular Orkin pest control subsidiary. Rollins has also placed a higher emphasis on door-to door sales as well as increased sales capacity and shifts in post-Covid consumer behaviors. — Pia Singh 6:05 a.m. ET: Amazon, Meta are among RBC’s top global ideas for 2024 RBC analyst Brad Erickson named major tech players Amazon and Meta among the firm’s top picks for next year. The firm added e-commerce giant Amazon to its coverage, assigning an outperform rating and $180 price target, indicating 18.5% upside for the stock. “In our view, the company’s unmatched scale and advantage in verticalized e-commerce combined with its industry-leading cloud business give it many future opportunities in new vertices, and management is playing offense on GenAI,” Erickson wrote in a Tuesday note. Amazon Web Services is “now de-risked” for 2024, which could help re-rate the stock, he said. Meta, which also has an outperform rating from RBC, could gain 13% from its $400 price target, according to the firm. Erickson noted Meta has the largest user base and deepest amount of data on that user base, adding that Facebook parent can compound 15% to 20% earnings growth once it passes through its “currently elevated investment cycle around AI.” Meta’s trading at a discount to the broader internet group, he said. Shares of Amazon and Meta were trading just above flat during premarket trading. — Pia Singh 5:35 a.m. ET: Barclays downgrades Apple, says stock could lose more than 15% It’s time to take a breather on Apple , according to Barclays. Analyst Tim Long downgraded the iPhone maker to underweight from equal weight, discouraged by weakness in iPhone volumes as well as in Macs, iPads and wearable devices. His $160 price target suggests the stock could lose about 17% from its latest close. Shares dipped 1.2% in premarket trading Tuesday. “[iPhone 15] has been lackluster and we believe IP16 should be the same,” Long wrote in a Tuesday note. “Other hardware categories should remain weak, and we don’t see services growing more than 10%. We expect reversion after a year when most quarters were missed and the stock outperformed.” Ongoing weak results coupled with multiple expansion isn’t “sustainable,” Long said, adding that next year will be more risky for Apple’s services business, which includes Apple Pay. Apple’s fiscal fourth-quarter results had surpassed analyst expectations for sales and earnings per share, but indicated a decline in overall sales for the fourth quarter in a row. — Pia Singh 5:35 a.m. ET: Stifel names Nvidia a ‘best idea’ for 2024 Stifel called Nvidia , last year’s best-performing S & P 500 stock, a “best idea” for the new year, noting the chipmaker can build on the artificial intelligence momentum from 2023. “We believe that NVDA is well positioned in markets that combine to yield an overall TAM of more than $100 billion exiting 2025 and a longer term opportunity funnel that could approach $1 trillion,” Stifel analysts said. “While we continue to view NVDA’s exposure to the Gaming, Automotive and Professional Visualization favorably, the shift from general purpose compute to accelerated compute represents the company’s most significant revenue and profitability growth opportunity over the next several years,” they said. Nvidia roared higher in 2023 with a 238.9% surge. The firm’s price target of $665 implies upside of 34.3% going forward. NVDA mountain 2022-12-30 NVDA in 2023 — Fred Imbert
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