(This is CNBC Pro’s live coverage of Friday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Friday’s analyst calls included widespread reaction to Apple’s big buyback announcement along with some upgrades to Arista and Union Pacific. Wall Street reaction to the Apple announcement was mostly positive, with Morgan Stanley saying “it’s hard not to be bullish” after the iPhone giant’s earnings call Thursday. The reception wasn’t quite as positive for Coinbase, with some analysts wondering whether the digital currency firm can maintain its early-year momentum. Elsewhere, Jefferies lifted its target on Arista, admitting that its long-held “hold” call on the stock was wrong. Check out the latest calls and chatter below. All times ET. 6:34 a.m.: Estee Lauder outlook leads to Morgan Stanley downgrade Weak guidance has caused Morgan Stanley to switch its bullish call on Estee Lauder . Analyst Dara Mohsenian downgraded the cosmetics stock to equal weight from overweight and slashed his price target by $24 to $140. Still, Mohsenian’s new target implies 3.7% upside over Thursday’s close. “Previously, we believed that EL made sense as a turnaround story,” Mohsenian wrote to clients. Mohsenian noted that topline recovery is now “clearly lower than expected” for the fourth quarter. Estee Lauder said to expect organic revenue growth between 6% and 10% in the quarter, which is smaller than the 12.7% estimate from analysts surveyed by FactSet. This revenue pressure “lingers longer-term” into the 2025 and 2026 fiscal years, he said. That’s because of external macro risk and category pressures, as well as internal market share problems. Shares retreated nearly 1% before the bell on Friday. The stock has dropped more than 7% in 2024, meaning it has diverged from the broader market’s ascent. — Alex Harring 6: 22 a.m.: Here’s what Wall Street thinks of Coinbase’s earnings Coinbase’s stronger-than-expected earnings have prompted analyst reactions. The crypto firm reported $4.40 in earnings per share on revenue of $1.64 billion for the first quarter. Analysts polled by FactSet had forecasted just $1.15 per share and $1.36 billion in revenue. Still, Coinbase shares slipped more than 3% before the bell on Friday as focus turned to what’s next for the digital currency company. Here’s what some of those analysts — who have very different expectations for the stock going forward — had to say following the print: Goldman Sachs’ Will Nance (neutral, price target cut to $255 from $295, 11.4% upside): “Taken together, we thought the moving parts in the quarter were supportive, although COIN’s strong YTD performance has largely reflected the stronger market already, hence a more muted stock price reaction. In the current environment, we believe COIN is well positioned to capitalize on the investments it has made during the Crypto market winter, allowing it to scale to new highs as it benefits from new products.” Barclays’ Benjamin Budish (underweight, $179 price target unchanged, 21.8% downside): “The biggest question going forward is, how sustainable are these trends? April looks clearly weaker than March (though better than Jan/Feb) based on exchange data, ETF flows, asset prices, and Base activity (per data from The Block and Bloomberg). With the Bitcoin and ETF launches behind us, there are a few broader catalysts that could drive another leg of activity (e.g., an approval of options on Bitcoin ETFs, approval of an ethereum ETF), but it is not clear if this would have the same magnitude as the factors that drove Q1.” Oppenheimer’s Owen Lau (outperform, price target to $282 from $276, 23.2% upside): “COIN reported strong 1Q adj. EBITDA of $1.01B versus our estimate of $699M and consensus’s $607M. We believe adj. EBITDA is a more appropriate comparison because COIN has adopted accounting rule ASU 2023-08. COIN beat on both top and bottom line, driven by strong trading volume which was up over 100% QoQ and YoY respectively.” — Alex Harring 6:12 a.m.: Wall Street reacts to Apple earnings Apple’s buyback announcement has caught the eye of Wall Street analysts. The technology giant announced its largest-ever share repurchase of $110 billion. That helped investors overlook the fact that iPhone sales slid 10% from the same quarter a year prior. Apple shares jumped nearly 6% in Friday premarket trading. Here’s what some of the biggest investment banks’ analysts told clients following the report: JPMorgan’s Samik Chatterjee (overweight, raised price target to $225 from $210, 30% upside): “The confluence of better-than-feared results in relation to F2Q (March-end) revenue and guidance for stronger than expected revenue growth in F3Q (June-end) are setting up a strong launch pad for the company in relation to results in FY24 as focus turns to the impending AI smartphone upgrade cycle in the coming years.” Morgan Stanley’s Erik Woodring (overweight, raised price target to $216 from $210, 24.8% upside): “Apple guided to an above-Street June Q, alleviated concerns about China iPhone, reached an all-time Services rev & GM record, authorized its largest incremental buyback in history, & hinted at Gen AI announcements to come in weeks. It’s hard not to be more bullish after that.” Goldman Sachs’ Michael Ng (buy, unchanged price target of $226, 30.6% upside): “F2Q24 provides demonstrable momentum across AAPL’s key categories and clears the way to a catalyst-rich NTM including increased clarity in AAPL’s generative AI initiatives (e.g., WWDC), new products (Let Loose event, iPhone launch), and ongoing Services momentum. We believe that the durability of AAPL’s installed base is underappreciated, and AAPL should improve revenue per user by increasing hardware units per iPhone user, Product price/mix, and Services attach & monetization as AAPL invests in its ecosystem.” — Alex Harring 6:08 a.m.: Jefferies upgrades Arista amid ‘extraordinary’ cloud capital expenditures Jefferies has turned bullish on Arista Networks as customers shell out for the cloud. Analyst George Notter upgraded the cloud networking stock to buy from hold and hiked his price target by $80 to $320. Notter’s new target implies 22.2% upside from Thursday’s close. Notter called capital-expenditure strength tied to the cloud “extraordinary,” while pointing to Arista as a “prime AI beneficiary.” On top of these optimistic views, the analyst said concerns about Nvidia as a competitor winning market share in the ethernet space have been “overblown.” “Now, it feels like the rush to deploy GPU-based infrastructure – including Ethernet-based infrastructure – will be lasting,” Notter said. “Moreover, it swamps concerns about spending choppiness or excess inventory among these customers.” Notter admitted the upgrade was a “mea culpa,” as he was previously concerned by customer concentration in Microsoft and Meta. “We’ve been carrying a Hold rating on Arista for a long time – of course, it’s been the wrong call,” he said. Arista shares rose about 2% in Friday’s premarket trading. The stock has climbed more than 11% this year. — Alex Harring 6:03 a.m.: Buy underperforming Union Pacific, Stifel says Stifel has moved off the sidelines on struggling Union Pacific shares, citing a “sweating-the-assets” mindset that can be good for business. Analyst Benjamin Nolan upgraded the railroad stock to buy from hold and increased his price target by $19 to $267. Nolan’s new target price implies the stock can advance 12.3% from Thursday’s close. Essentially, Nolan said the “sweating the assets” strategy involves driving increased productivity from owned business and pushing for higher prices, while cutting any unnecessary costs. He said service should still be key, but volume growth should be aided by the higher-margin industrial business rather than through attempting to win market share in lower-cost freight. “We are taking up our pricing assumptions and, consequently, our OR assumptions, which in turn drive higher EPS,” he said. “While still not as cheap as we would like, there is enough upside to justify upgrading.” Nolan’s upgrade offers a bright spot amid a tough period for Union Pacific. Shares have bucked the broader market’s climb and have actually slipped more than 3% in 2024. — Alex Harring — CNBC’s Michael Bloom contributed to this report.
