Notable analyst calls this week: Tesla, Kroger and FedEx among top picks
Dec. 07, 2024 9:37 AM ET
By: Tiyashi Datta, SA News Editor
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The S&P500 ( SP500) closed in the green on Friday, after investors witnessed results from company’s including Salesforce and HP Enterprise, while assessing Fed Chair Jerome Powell’s remarks about the U.S. economy.
For the week, Nasdaq ( COMP:IND) gained 1.5%, while Dow ( DJI) lost marginally.
Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:
Tesla upgraded by Roth MKM on positive catalysts
Brokerage Roth MKM upgraded Tesla (NASDAQ: TSLA) to Buy from Neutral, arguing that Elon Musk's "authentic support" for Donald Trump likely doubled the EV giant's pool of enthusiasts and lifted credibility for a demand inflection.
"In our view, this boosts credibility for management's guide of 20%-30% 2025 delivery growth," it said, adding that it sees abundant positive catalysts.
The brokerage, which also upped PT to $380 for the stock, added CyberTaxi now faces an accommodating regulatory environment.
BofA Securities also raised PT on the automotive giant to $400 from $350 and maintained its Buy rating, saying that it is well positioned to grow in 2025 with its core EV business and launch of robotaxi offering.
Jefferies remains positive on Kroger; BMO downgrades to Market Perform
Jefferies upgraded Kroger (NYSE: KR) to Buy citing improving foot traffic, and fuel profitability, which has also led the investment bank to raise base EPS above Street.
Jefferies, which forecasts a path to strong FCF accretion in F'26-'28, said Kroger's fuel business has become structurally more profitable, providing incremental dollars for core grocery reinvestment.
Meanwhile, BMO Capital Markets downgraded Kroger from Outperform to Market Perform and said valuation expansion beyond 13x would likely require stronger grocery market share trends and/or upward EPS revisions. Kroger on Thursday said its Q3 revenue was impacted by lower fuel prices and the sale of its specialty pharmacy business.
Deutsche Bank upgrades CVS on measures to improve profitability
Deutsche Bank has upgraded CVS Health (NYSE: CVS) to Buy from Hold, asserting that the company’s earnings and business multiple are "now likely near trough levels" while it has taken measures to improve profitability.
The brokerage, which maintained PT to $66, believes that “the earnings recovery is both achievable and will outpace Street expectations.”
JPM upgrades Gap on ‘continuous improvement’ strategy
Gap (NYSE: GAP) was upgraded by J.P. Morgan to Overweight from Neutral, saying that it has reached an inflection point with CEO Richard Dickson at the helm, pivoting from a strategy that was merely “fixing fundamentals” to one of “continuous improvement”.
J.P. Morgan analyst Matthew Boss lifted PT for Gap by 7% to $30 and FY25 EPS estimate by $2.30 (versus Street estimate of $2.14) and FY26 to $2.53 (vs $2.28 estimates) and ~40 basis points of annual operating margin expansion to 7.9% by 2026.
FedEX downgraded by Bernstein ahead of quarterly results
FedEx (NYSE: FDX) was downgraded to Market Perform from Outperform by Bernstein, ahead of the delivery giant's second quarter earnings, citing increasing execution, event, and policy risk.
The brokerage said the company could see some likely tariff hits under the Donald Trump administration and trimmed PT to $316 from $337.
"We are taking a tactical pause and lowering our rating ahead of a widely expected reset in near-term guidance framework/uncertainty around LTL freight spin-off expectations," analysts said.
Citi upgraded HP Enterprise (NYSE: HPE) to Buy from Neutral and raised PT to $26 from $23, following the company’s Q4 results and guidance that topped Wall Street's expectations. The brokerage believes that the company will benefit from improving demand in server and enterprise networking, and expanding AI opportunities.
Morgan Stanley double upgrades clean energy company NextEra Energy Partners (NYSE: NEP) to Overweight from Underweight with a $22 price target, saying the stock has overly discounted negative outcomes of its ongoing strategic review.
J.P. Morgan said it is staying "sidelined" on Super Micro Computer (NASDAQ: SMCI) until it gets better visibility into compliance issues, even as an independent special committee has found no wrongdoing.
Applied Materials (NASDAQ: AMAT) was downgraded by Morgan Stanley to Underweight from Equal-Weight, saying that it sees 2025 as a "transition" year for the wafer fab equipment market.
BofA upgraded Dollar General (NYSE: DG) to Buy from Underperform, while it upgraded Altria (NYSE: MO) to Buy from Neutral and raised price objective by $10 to $65. |
