Monday's Major Analyst Calls: Tenable Holdings, Skechers, Tesla, Apple, L3Harris Technologies, Netflix, Ambarella, DoorDash, Lululemon, Micron, Alliant Energy, Carvana, QuantumScape, BioMarin Pharmaceutical, Iridium, Disney, Ralph Lauren, ESAB, Simply Foods, Nvidia, ASGN Incorporated, Nike, Arm, PayPal, Vertex
Here are the significant analyst calls that made waves on Wall Street on Monday:
Tenable Holdings: Outperform
TD Cowen initiated Tenable Holdings as outperform, citing the cybersecurity company's expanding platform. They believe Tenable Holdings is well-positioned to benefit from the growing Cyber Exposure arena, with an estimated Total Addressable Market (TAM) of $25 billion.
Skechers: Overweight
Piper Sandler upgraded Skechers to overweight from neutral, expressing confidence in the company's balance sheet. They made this move as a strategic shift, opting for less speculative, quality earnings growth with a clean balance sheet by upgrading Skechers.
Tesla: Neutral
Goldman Sachs reiterated Tesla as neutral, reducing its estimates on the stock and predicting lower pricing. They lowered their earnings per share (EPS) estimates for 2023 and 2024 due to lower average selling prices (ASPs) and auto gross margin assumptions.
Apple: Buy
Goldman Sachs reiterated Apple as a buy, citing strong demand for the newest iPhone models. The high demand is evident from Apple's pre-orders, which quickly pushed e-commerce fulfillment dates beyond 8 weeks for select phones and regions.
L3Harris Technologies: Overweight
Wells Fargo upgraded L3Harris Technologies to overweight from equal weight, highlighting the company's burgeoning portfolio in the tech and defense sector. They believe L3Harris Technologies' portfolio positions it for growth in line with its defense peers, making the stock an attractive investment opportunity.
Netflix: Outperform
Evercore ISI reiterated Netflix as outperform, despite lowering its price target on the stock. They maintain their positive rating on Netflix, but adjusted their estimates and price target based on recent management comments and ad channel checks.
Ambarella: Outperform
Northland initiated Ambarella as outperform, emphasizing the semiconductor company's strong position in the development of solutions for autonomous vehicles and AI-enabled IoT devices. They believe Ambarella's efforts will create significant long-term value for shareholders, despite near-term challenges related to an inventory correction.
DoorDash: Buy
Mizuho upgraded DoorDash to buy from neutral, stating that the company deserves a re-rating. They believe DoorDash will continue to gain market share in the US and benefit from rational competition in Europe. Additionally, moderated food inflation and resilient consumer spending provide further support for their positive view.
Lululemon: Buy
HSBC initiated coverage of Lululemon with a buy rating, highlighting the company's early-stage growth potential. They see Lululemon's unique business model as being in the early innings of growth, making it an attractive investment opportunity.
Micron: Buy
Deutsche Bank upgraded Micron from hold to buy, stating that the market is underappreciating the company's earnings per share (EPS) inflection. They anticipate sharp increases in Street estimates over the next six months, as the market may have underestimated the impact of price increases, particularly during a period of price inflection.
Alliant Energy: Overweight
Barclays initiated coverage of Alliant Energy as overweight, recognizing the utility company as a leader in renewables. They highlight Alliant Energy's strong renewable-driven investment program, with a target of having 36% renewables in rate base by 2026.
Carvana: Neutral
Wedbush upgraded Carvana to neutral from underperform, citing potential profitability upside. They believe that the recently completed debt exchange and improving profitability could drive positive performance in the third and fourth quarters, providing the company with breathing room to execute its plans.
QuantumScape: Outperform
Evercore ISI reiterated QuantumScape as outperform, emphasizing the battery company's role as a key next-gen battery technology for electric vehicle (EV) investors to monitor. QuantumScape is developing a nodeless, solid-state Lithium-Metal battery with higher density and decreased charging times.
BioMarin Pharmaceutical: Buy
UBS initiated coverage of BioMarin Pharmaceutical as a buy, recognizing the company's recent transition to profitability and the approval of two major products with ongoing launches. They believe BioMarin Pharmaceutical is undervalued and turning a corner in terms of its financial performance.
Iridium: Buy
Deutsche Bank upgraded Iridium from hold to buy, seeing an attractive entry point for the satellite company. They believe the recent pullback in the stock presents an opportunity, and the weakness is primarily driven by concerns around the direct-to-device opportunity.
Disney: Outperform
Raymond James initiated Disney as outperform, highlighting the compelling investment potential of the stock. They believe that despite negative sentiment in the media industry, Disney's expected cash flow growth and attractive valuations offer opportunities for attractive shareholder returns.
Ralph Lauren: Buy
Guggenheim upgraded Ralph Lauren from neutral to buy, seeing further upside ahead for the stock. They established a price target of $166, representing approximately 45% potential upside from current levels.
ESAB: Buy
Bank of America upgraded ESAB from neutral to buy, recognizing the Swedish industrial company's strong performance. They appreciate ESAB's better-than-expected execution, falling leverage, expanding margins, and outperforming growth, along with a renewed appreciation for its portfolio.
Simply Foods: Overweight
Morgan Stanley upgraded Simply Foods from equal weight to overweight, citing the company's attractive sales and earnings growth profile. They highlight the strong outlook for the active nutrition category, supported by the success of Quest, and the potential for a recovery in Atkins.
Nvidia: Outperform
Bernstein reiterated its outperform rating on Nvidia after a meeting with the company's management. They believe Nvidia continues to demonstrate positive and optimistic views on the AI opportunity, highlighting various aspects of their competitive advantage.
ASGN Incorporated: Overweight
Wells Fargo initiated coverage of ASGN Incorporated as overweight, recommending investors buy the dip. They see an opportunity in the company, which has lagged behind due to concerns over tech woes and a slowing macro environment. ASGN Incorporated's valuation discount to staffing and consulting peers and a different revenue mix make it an appealing investment.
Nike: Outperform
Wells Fargo reiterated Nike as outperform but lowered its price target on the stock. They express concerns about potential negative news in Nike's upcoming quarterly report but believe that sentiment continues to drift lower. They have adjusted their earnings per share (EPS) estimates below Street expectations.
Arm: Underperform
Bernstein initiated coverage of Arm as underperform, stating that it is too early to declare the semiconductor company a winner in the AI space. They remain conservative on Arm's ability to deliver increased royalty rates at the pace management is guiding.
PayPal: Market Perform
MoffettNathanson downgraded PayPal from outperform to market perform, expressing concerns about declining profit growth. They anticipate lackluster gross profit growth for PayPal, particularly in the face of strong momentum from Apple Pay.
Vertex: Overweight
Morgan Stanley upgraded Vertex from underweight to overweight, recognizing the tax solutions company as being underappreciated. They believe Vertex is at an inflection point, with accelerating revenue growth and improving free cash flow (FCF) margins.
In conclusion, these analyst calls provide valuable insights into the market's perception of various companies. Investors should consider these recommendations when making investment decisions, but it is important to conduct thorough research and analysis before making any financial commitments.
Conclusion
The latest analyst calls offer a wealth of information and insights into the current market sentiment and future prospects of various companies. For startups and new businesses, these calls can serve as a valuable resource to understand industry trends, competitive landscapes, and potential growth areas.
Impact on New Businesses
For instance, the outperform rating for Tenable Holdings highlights the growing importance of cybersecurity, suggesting that new businesses in this space could find a receptive market. Similarly, the overweight rating for L3Harris Technologies emphasizes the potential in the tech and defense sector.
Strategic Planning
These calls can also help new businesses in strategic planning. For example, the neutral rating for Tesla, despite its market leadership, could indicate a potential shift in the EV market. New entrants in this field might need to consider such factors when planning their market entry strategies.
In conclusion, while these analyst calls primarily target investors, they can also provide new businesses with critical insights into market trends and potential growth areas. However, as with any external advice, these should be considered as part of a broader, comprehensive business strategy.
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