Nvidia price target increase, Goldman downgrades beauty stock

(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.) A beauty stock and an insurance name were in focus among early analyst calls. Goldman Sachs lowered its rating on Estée Lauder to neutral, and its new price target calls for a slight decline going forward. On a more positive note, Jefferies raised its rating on insurance company Root, noting it expects more than 24% upside from current levels. Elsewhere, Daiwa raised its price target on Nvidia, which points to more than 10% upside over the next 12 months. Check out the latest calls and chatter below. All times ET. 8:01 a.m.: D.A. Davidson initiates coverage of Campbell Soup Campbell Soup should see brighter days ahead, according to D.A. Davidson. The firm initiated coverage of the food and beverage company with a buy rating Thursday. Campbell Soup appeared to be adversely impacted by inflation-weary consumers who spent less on pantry staples as they used what was already on their shelves, said analyst Brian Holland. “Easier volume compares as the company laps the effects of pantry de stocking, as well as moderating core inflation, are supportive of a 2H24 (Jul) inflection,” he wrote in a note to clients. In addition, its acquisition of Sovos Brands, which is pending approval by the Federal Trade Commission, gives them access to the Rao’s brand. Rao’s “has been the fastest growing center store brand of scale since Sovos’ acquisition,” Holland said. “We are bullish on CPB adding such a strong asset that aligns with its category positioning, as it increases our conviction in the company’s ability to manage the business going forward and deliver synergies,” he said. Campbell Soup is down about 1% year to date, after shedding nearly 24% in 2024. Holland’s price target of $48 suggests about 13% upside from Thursday’s close. — Michelle Fox 7:57 a.m.: Oppenheimer initiates Evolent Health, highlights long-term growth runway Oppenheimer said Evolent Health is well positioned to take advantage of a roughly $150 billion total addressable market. The firm initiated coverage of the technology-enabled health stock with an outperform rating and a $45 per share price target on Friday. Oppenheimer’s forecast calls for nearly 33% upside from Thursday’s $33.91 close. Shares have ticked up roughly 3% from the start of the year. “Though the value-based primary care market is saturated, Evolent is uniquely positioned due to its risk-based appetite in the specialty care market,” analyst Michael Wiederhorn said. “We also expect EBITDA growth due to the rapid expansion of the business, contract maturation, and mix-shift,” Wiederhorn added. — Brian Evans 7:55 a.m.: Boeing stock has the potential to fly higher from here, Stifel says Boeing’s woes are just a near-term blip on the radar, according to Stifel. The investment bank stood by its buy rating on the aircraft maker, which has been plagued by a series of quality control issues in recent months. Earlier this week, the Federal Aviation Administration gave Boeing 90 days to come up with a quality control plan , less than two months after a door panel blew off a Boeing 737 Max plane during the middle of an Alaska Airlines flight. Shares of Boeing are down nearly 22% in 2024, but analyst Bert Subin’s $280 price target implies that shares could rally 37% from their current levels. BA YTD mountain BA year to date “We think the 787 could be a meaningful cash tailwind in 2024 and improving production and strong demand could help drive better future margins and cash generation as we look to 2025+,” he wrote. “While we think 737s will remain the core driver of future results, the 787 is starting to look like a favorable supplement to the narrowbody recovery.” As build rates improve for Boeing and its other lines of business strength, Subin foresees strong material free cash flow growth for the company over the next two years. This growth should drive upside for the stock as demand for new aircraft remains elevated, he added. — Lisa Kailai Han 7:47 a.m.: Bank of America hikes Broadcom price target ahead of earnings Broadcom’s upcoming earnings report won’t derail its strong start to the year, according to Bank of America. Shares of Broadcom are already up more than 16% this year, and continued excitement around artificial intelligence is raising expectations for the company. Bank of America analyst Vivek Arya hiked the price target for the stock to $1,500 per share from $1,250, saying that broader story will remain intact even if next week’s report is lackluster. “We expect any stock pullback to be likely short lived as investors look forward to AVGO’s Mar-20 AI Investor Day, and as investors continue to appreciate AVGO’s unique combination of capital appreciation, dividend yield/growth and its position as a ‘low beta’ AI beneficiary,” the note said. The new price target is 15% above where shares of Broadcom closed on Thursday. — Jesse Pound 7:26 a.m.: Wells Fargo downgrades Hewlett Packard Enterprise as AI momentum lulls Networking weakness and disappointing artificial intelligence momentum have taken their toll on shares of Hewlett Packard Enterprise , according to Wells Fargo. The bank downgraded the information technology stock to an equal weight rating from overweight. Analyst Aaron Rakers accompanied the move by lowering his price target to $17 from $21, implying that shares could still rise 12% from here. Hewlett Packard stock has already slid 10% this year. “While we are positive on HPE’s strategic positioning in HPC / AI, F2Q24 results point to stronger backlog growth + conversion velocity at competitors,” he wrote. “Networking weakness, albeit somewhat expected, to remain an overhang.” Risks to Rakers’ assessment include materializing momentum in the AI service space. Additionally, the stock could go higher if Hewlett Packard’s Intelligent Edge business bottoms in the first half of 2024, leading to a recovery in the second half of the year. — Lisa Kailai Han 7:15 a.m.: Bank of America sees more upside potential ahead for weight loss drug manufacturer There’s more growth ahead for Eli Lilly , according to Bank of America. The bank lifted its price target on the buy-rated biopharma stock to $1,000 from $800. This implies that shares of Eli Lilly could rise 33% from their Thursday closing price of $753.68. The stock has already rallied 29% this year, but analyst Geoff Meacham justified potential upside ahead that could come as shares of Eli Lilly strengthen amid a “scarcity of high growth stories in Healthcare.” “Lilly remains a favorite name in our Biopharma coverage, even with strong YTD performance, based on peer-leading revenue growth, margin expansion, and a compelling pipeline,” he added. “While investors clearly recognize the commercial opportunity for Mounjaro (diabetes) and Zepbound (obesity), we’d argue that additional opportunities in heart disease (HFpEF; phase 3), obstructive sleep apnea (OSA; phase 3), and liver disease (NASH; phase 2) are vastly underappreciated.” The analyst believes that by 2030, sales of tirzepatide — the active ingredient in Mounjaro — could top $60 billion from $15 billion in 2024. Although Eli Lilly faces hefty competition, Meacham is confident in the company’s competitive advantages over its peers. “We suspect investors discount Lilly + Novo’s substantial expertise in the space, which together with a lack of available manufacturing capacity, create very high competitive hurdles,” he wrote. — Lisa Kailai Han 7 a.m.: Bank of America upgrades Vertex to neutral, cites valuation as buy-rating deterrent Bank of America sees a rosy outlook ahead for Vertex . Analyst Brad Sills upgraded the software servicing stock to a neutral rating from underperform, noting that the stock’s current valuation was a buy-rating deterrent. He accompanied this move by nearly doubling his price objective to $40 from $23, corresponding to a 19% upside. “Our concern last spring was that the company’s investments were not yielding meaningful incremental growth. Since then, Vertex has made real progress on growth initiatives, such as tighter integrations/go to market with key ERP (enterprise resource planning) partners,” the analyst wrote. Meanwhile, Vertex’s partnerships with system integrators like Accenture, RSM and BDO have also yielded results, Sills added. He pointed to rising subscription growth, up 19% in the fourth quarter versus 14% in the one prior. “These tighter partnerships place Vertex in a better position to benefit from an ERP cloud migration cycle that is gaining momentum,” he wrote. “This cycle provides line of sight for solid, sustained mid/high teens subs growth. Also, the company has invested in a better customer support function, which has been a catalyst for expansion deals and better positions Vertex for sustained expansion.” Shares of Vertex have rallied 25% from the beginning of the year. — Lisa Kailai Han 6:48 a.m.: Stephens upgrades Vita Coco stock to overweight Stephens sees a bright future ahead for shares of Vita Coco . The financial services firm upgraded shares of the coconut water seller to an overweight rating from equal weight, simultaneously lifting its price target to $31 from $28. This implies a potential 19% rally for the stock. Shares of Vita Coco are marginally higher on the year. Although shipping disruptions and concerns related to ocean freight rates have concerned investors, Stephens analyst Jim Salera believes that Vita Coco has done a good job to assuage worries in a recent earnings call. “We believe it was this commentary coupled with healthy consumption trends that sent shares up ~15% on the day,” he wrote. “Looking beyond the potential headwinds from transportation costs, COCO remains the market share leader in a rapidly growing Better-For-You category.” Additional catalysts include the company’s strong pipeline for innovation. Salera added that the company still has room to increase its consumption, especially for its multipack offerings. — Lisa Kailai Han 6:38 a.m.: JPMorgan upgrades GoodRx, sees 28% upside ahead It’s a “good time to upgrade” GoodRx , according to JPMorgan. The bank upgraded shares of the prescription healthcare company to an overweight rating from neutral, simultaneously lifting its price target to $10 from $7. This implies that shares could rise 28% from the stock’s Thursday afternoon closing price. “Throughout healthcare services we prefer companies currently involved in the Rx supply chain, and we feel that GoodRx fits that description and that potential concerns around shifting pharmacy reimbursement model are overdone,” wrote analyst Lisa Gill. “Structurally we see the overall value proposition for GDRX as pharmacy costs continue to shift to the consumer and pharmacies and PBMs attempt to capture potentially abandoned scripts.” The analyst underscored GoodRx’s 2024 guidance as indicative of both a positive inflection point and evidence that management has worked to establish credibility in its guidance. Additionally, she believes that the company’s top-line growth next year should accelerate, as headwinds continue to unwind. Meanwhile, Goldman Sachs also sees growth drivers towards the firm’s ISP, or integrated savings program. “Benefit design continuing to shift towards high-deductible plans means customers are exposed to drug costs and supports further ISP adoption,” Gill added. Shares of GoodRx have risen 16% so far this year. — Lisa Kailai Han 6:25 a.m.: Daiwa Capital Markets sees Nvidia rising even more from here A trillion-dollar opportunity on the horizon could further boost shares of Nvidia , according to Daiwa Capital Markets. The firm stood by its outperform rating on the chipmaker stock, but lifted its price target to $900 from $535. This corresponds to a potential 14% upside for Nvidia. Riding on the artificial intelligence craze, Nvidia stock has largely fueled the market rally in 2024. Its shares have already gained 60% in 2024. Analyst Louis Miscioscia called Nvidia the “big winner” when it comes to AI, listing several catalysts including the company’s library of AI programming support that makes their platform easier to use versus competitors. Additionally, the firm’s familiarity and developer support and full stack solution are hard to beat. “Many reports suggest AMD/Intel GPUs are pretty darn powerful, they are, but it is not just about silicon, it is the full solution,” he wrote. “Nvidia is in the right place at the right time.” But the larger question centers around how long Nvidia stock can keep rallying to new heights. However, Miscioscia voiced his optimism that the company could outperform in the long run, especially given a potential trillion-dollar opportunity for Nvidia. “That Nvidia is seeing material inference GPU demand, bodes well for continued growth,” he wrote. “The basic concept is that x86 architecture, due to Moore’s Law, is no longer seeing material performance improvements. To meet the new, modern DC processing demand levels, most applications should transition to run on GPUs. If there is a migration from x86 to GPU, this is a ‘trillion’ dollar upgrade opportunity.” — Lisa Kailai Han 6:08 a.m.: Piper Sandler downgrades New York Community Bancorp, acknowledge mistake in not doing so earlier New York Community Bancorp’s latest announcement was the last straw for Piper Sandler. The investment bank downgraded shares of the regional lender to neutral from overweight, citing Thursday’s startling announcements that the bank would be replacing its chief executive officer. “Most worrisome, the company announced that it identified a material weakness in its internal controls related to internal loan review. The assessment is not yet complete (which presumably could lead to more issues/costs/etc). As a result, the company does not expect to be able to file its 10-K on time,” analyst Mark Fitzgibbon wrote. Shares of New York Community Bancorp sold off 29% in Thursday’s extended hours session, adding to its 53% decline this year. The analyst slashed his price target for the bank to $5 from $8, implying that shares could still add 4%. NYCB 1D mountain NYCB drops In the note, Fitzgibbon acknowledged that his previous call about the name had been wrong — and overly optimistic. “We fully acknowledge that our call has been wrong on this name,” he wrote. “When the company announced that it was taking several meaningful strategic actions, including building liquidity, cutting the dividend and boosting reserves, we hesitated to downgrade the stock. At the time, we reasoned that it was too late to downgrade since the stock was already down meaningfully. Moreover, we were hopeful that NYCB would get back on track. If this occurred, the share price looked remarkably inexpensive.” Besides the near-term uncertainty around a new management team taking the reins at New York Community Bancorp, Fitzgibbon also underscored his lack of conviction in the company’s short-term earnings estimates. “Hence, it is very tough to value,” he wrote. “None of that gives us comfort in recommending to investors that they should buy the stock.” — Lisa Kailai Han 5:51 a.m.: Morgan Stanley downgrades Flywire to equal weight Morgan Stanley thinks it’s time to take “some chips off the table” when it comes to Flywire . The bank downgraded shares of the global payments platform to an equal-weight rating from overweight. Analyst James Faucette thinks the company’s current valuation better balances its risk-reward level, thus justifying the downgrade, although he likes the business in the long term. Shares of Flywheel have gained almost 23% this year. FLYW YTD mountain FLYW in 2024 Faucette accompanied his downgrade by lifting his price target to $30 from $27. This new objective corresponds to a nearly 6% upside. “FLYW can continue to gain share rapidly in the attractive Education vertical given robust NRRs, competitive product advantages, and a long penetration runway ahead. Expansion into new verticals such as Healthcare, Travel, & B2B is likely to be supportive to ongoing revenue growth,” the analyst wrote. On the other hand, Faucette cautioned that he was monitoring several facets of the company, including potential headwinds in Canada, rising competition and a potential squeeze from the U.S. government on student visas and immigration policies. — Lisa Kailai Han 5:46 a.m.: Goldman Sachs downgrades Estée Lauder, cites near-term headwinds Investors should ease positions on Estée Lauder until further notice, according to Goldman Sachs. The bank downgraded shares of the cosmetics company to neutral from buy, setting a 12-month price target of $145. This would imply that Estée Lauder stock could slide 2.4% from their Thursday closing price. “Assume at Neutral until uncertainty around travel retail recovery clears and cost savings initiatives begin to bear fruit,” the bank said. One major headwind for the company remains overseas sales pressures, especially in Asia. Estée Lauder’s path to recovery is extremely dependent on China since the Chinese market has traditionally been a key growth driver. “We expect rising income levels as well as premium beauty taking a greater share of income for Chinese consumers to drive durable growth ahead,” the bank wrote. “That said, we acknowledge that broader macro challenges in the region may pressure the consumer for longer, and as such Chinese consumers may take longer to catch-up to other developed Asian markets.” Within China, the global duty-free market in Hainan is a “compelling long-term opportunity,” the bank said. But on the other hand, growth challenges in developed markets have proved “stickier” than expected for Estée Lauder. “While channel mix is relatively better placed now relative to pre-Covid, EL’s share trends are yet to show signs of meaningful recovery, and as such will likely require incremental brand re-investments going forward,” the bank stated. However, Goldman emphasized that in the long-term, Estée Lauder’s extreme cost cutting measures should drive its margin expansion higher. Shares of Estée Lauder have edged slighter higher this year. EL YTD mountain EL in 2024 — Lisa Kailai Han 5:46 a.m.: Jefferies upgrades Root Expect Root’s recent surge to continue, according to Jefferies. Analyst Yaron Kinar upgraded the insurance company to buy from neutral. He also lifted his price target on the stock to $40 from $30, implying upside of 24.6% from Thursday’s close. Shares were up more than 9% in the premarket. Over the past month, the stock has ripped 291% higher after the company reported much better-than-expected fourth quarter results. ROOT 1M mountain ROOT in past month “The company has generated industry-leading loss ratios for two consecutive quarters in Personal Auto, showing material YoY improvement and essentially achieving its 65% target. The much improved loss ratio suggests that incremental customer additions are profitable,” Kinar said. “Having achieved its loss ratio target, particularly while incumbents are still focused on improving loss ratios and retrenching, present ROOT with a material growth opportunity met with increased company appetite for growth and increased ambient shopping by customers who are still seeing material increases in their premiums.” — Fred Imbert