Notable analyst calls this week: Oracle, Moderna and Costco among top picks
Sep. 14, 2024 2:31 PM ET
By: Tiyashi Datta, SA News Editor
 Sorapop
The S&P500 ( SP500) closed in the green on Friday, with the week seeing conversation of a Fed rate cut grabbing limelight.
For the week, the Nasdaq ( COMP:IND) rose 4%, 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:
Analysts positive on Oracle after strong quarter
Following Oracle’s ( ORCL) first quarter results that beat estimates, JMP upgraded it to Market Outperform with a $175 PT, with JMP analyst Patrick Walravens noting that after 13 years of single-digit organic total revenue growth, Oracle is reaccelerating into the double digits. The analysts also added that Oracle's new strategic partnership with Amazon may help offset some of the pressure seen on the database business.
Morgan Stanley kept its Equal-weight rating but raised PT to $145 from $125, saying bookings growth picked back up in the first quarter. Similarly, Evercore reiterated its Outperform and raised PT to $175 from $160, while Mizuho raised PT to $185 from $170 and maintained its Outperform.
BofA raised its price target on ORCL to $175 from $155 citing accelerating topline and EPS growth.
Oracle was also listed as the top technology stocks to own into the end of the year by UBS, along with AMD ( AMD) and Dell Technologies ( DELL).
Costco downgraded by Redburn on valuation concern
Redburn Atlantic downgraded Costco Wholesale ( COST) to a Neutral rating from Buy, with analyst Daniela Nedialkova noting that the upside catalysts for the near future have already been largely priced in.
"While ongoing comp/market share gains should continue to drive decent earnings, the current risk-reward profile is skewing less favorably given the even higher than normal expectations priced into a starting point of 50x P/E on FY25," said Nedialkova and set a price target of $890.
Analysts not so positive after Moderna’s R&D Day
Moderna ( MRNA) received downgrades from J.P. Morgan and Jefferies, following the biotech’s R&D Day event.
“We welcome this expense discipline even if it wasn’t sufficient to keep the prior breakeven guidance intact,” J.P. Morgan analyst Jessica Fye wrote and downgraded it to underweight from neutral.
Meanwhile, Jefferies slashed Moderna’s PT to $65 from $120 as it downgraded the stock to Hold from Buy, saying the long-anticipated forecast reduction “sees profitability pushed out to 2028 from 2026.” Piper Sandler also reduced PT to $115 from $157.
Deutsche sees deteriorated fundamentals in consumer products sector, downgrades Colgate-Palmolive
Deutsche Bank downgraded Colgate-Palmolive ( CL) to Hold from Buy, saying that it expects most names in the category to be “fighting against prospects of downward organic top-line growth revisions.”
Although analyst Steve Powers still views Colgate-Palmolive favorably given the company’s efforts to position itself for better growth and long-term profitability, the fundamentals for the category have deteriorated and the need for selectivity within the sector mounts.
Charter Communications upgraded by Citi on current valuation
Citi Research has upgraded Charter Communications ( CHTR) to Neutral from Sell, saying the rating change is partly based on the current valuation and the expectation for a mixed operational performance for the company.
"Charter is targeting significant improvement in EBITDA during 2H24 with its previously announced efforts to reduce expenses that can also support flattish EBITDA for 2025. We still see risk for consensus expectations for 2025 broadband volume," the brokerage added.
Other than the companies mentioned above, there were several other analysts calls during the week including Goldman Sachs upgrading Evercore ( EVR) to Buy from Neutral in a recent note as analyst James Yaro expects the investment banking advisory firm to sustain its trajectory of strong revenue growth and further expand its market share.
Game publisher Ubisoft ( OTCPK:UBSFF) was downgraded by Cantor Fitzgerald to neutral from overweight, on lower expectations for the recent titles. The Star Wars Outlaws game, which came out in August, "has disappointed players and seems likely to underperform expectations," Cantor said and cut PT to €17.6 from €25.
Deutsche Bank resumed coverage on Tesla ( TSLA) with a Buy rating and named the electric vehicle stock a top pick in the automobile sector. Analyst Edison Yu said the stock deserves a unique premium due to the potential with the autonomous driving and humanoid robot businesses. |
