Notable analyst calls this week: Nvidia, Barrick Gold and Dollar General among top picks
Aug. 31, 2024 2:31 PM ET
By: Tiyashi Datta, SA News Editor
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The S&P500 ( SP500) closed in the green on Friday, as investors digested the earnings report card from semiconductor giant Nvidia.
For the week, the Nasdaq ( COMP:IND) fell marginally, while Dow ( DJI) advanced 0.7%.
Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:
Nvidia grabs spotlight as Wall Street views results, guidance as "drop the mic" moment
Nvidia ( NVDA) posted second-quarter results guidance that topped estimates on Thursday, with Wedbush analyst Dan Ives calling it a "drop the mic" moment.
Morgan Stanley analyst Joseph Moore raised PT to $150 from $144 and reiterated his Overweight rating. Moore said it was a "very strong quarter" for Nvidia.
Raymond James analyst Srini Pajjuri also raised PT to $140 from $120, saying there are some concerns about the gross margin outlook, but overall, the results and guidance were "largely consistent with the expectations." He reiterated his Strong Buy rating on the stock.
Bernstein raised PT to $155 from $130, while TD Cowen said the commentary around Blackwell is “very encouraging.”
Analysts downgrade Dollar General after historic drop
Dollar General ( DG) got a downgrade from Morgan Stanley to Equal-weight from Overweight after the stock saw a 32.2% drop on Thursday, taking the shares below the $100 level for the first time since 2018 and was the largest single-day decline in its trading history.
MS analyst Simeon Gutman warned that market share gains seem unlikely to propel Dollar General's comparable sales back to the 3% mark. The firm also cut PT to $100.
Telsey Advisory Group analyst Joe Feldman said the limited visibility into the timing and magnitude of net gains from the retailer's initiatives are likely to weigh on the share price in the near term and lowered its rating to Market Perform from Outperform. Telsey lowered its price target on DG to $103 from $168.
Hershey’s price increase not enough to offset cocoa inflation, says Citigroup
Citigroup downgraded Hershey ( HSY) to Sell from Neutral, and lowered its price target by 7% to $182, saying the company’s profit margins face a challenging year in 2024.
Citigroup doesn’t believe a price increase will be enough to offset cocoa inflation, and price elasticity could be particularly challenging for Hershey next year, especially if competitors don’t match Hershey’s price increases.
Argus optimistic about Barrick Gold’s long-term focus
Argus Research upgraded Barrick Gold ( GOLD) to Buy from Gold and set a $24 PT.
Barrick's results are linked to trends in gold production and pricing, and given global economic uncertainty, inflation, and the wars in Ukraine and the Middle East, gold has soared to cyclical high and likely will remain in demand, Argus analyst John Eade says, adding that he is impressed with the company’s decision to run the business for the long term.
Okta downgraded by BofA despite second quarter beat
Okta ( OKTA) stock slumped 18% despite a second quarter beat, with BofA Securities downgrading it to Underperform from Buy. The firm said the company's future growth is overshadowed by near term headwinds and reduced PT to $75 from $135.
However, Brooks and her team said that there is a lot to like in the long term, including new product launches, go-to-market initiatives, and an improving financial profile.
Elastic’s draws downgrade from analysts after cutting guidance
Elastic ( ESTC) cut its annual revenue guidance, leading to BofA downgrading the stock to Neutral from Buy and lowering PT to $94 from $140, noting that execution issues have been identified, but may take time to get fully fixed.
Other than the companies mentioned above, there were other analysts’ actions, including J.P. Morgan analyst Christopher Horvers upgrading BJ's Wholesale Club Holdings ( BJ) to Neutral from Underweight, expecting modest reflation in grocery. The brokerage said the company is seen benefitting from its efforts to drive share by reinvesting in the business.
Phillip Capital downgraded Salesforce ( CRM) to Accumulate from Buy recommendation, as it “accounts for recent share price performance.” The firm kept PT at $305.
William Blair started off coverage on Tesla ( TSLA) with an Outperform rating on its view that the energy storage business is underappreciated.
Morgan Stanley called Coca-Cola Company ( KO) a top pick as it expects the strong run for the beverage giant to continue. |
