Here are Wednesday’s biggest calls on Wall Street:
Bank of America upgrades Tesla to buy from neutral
Bank of America said it sees a slew of “positive catalysts” ahead for Tesla shares following earnings on Tuesday.
“Tesla’s 1Q:24 results were better than expected which, coupled with management commentary, addressed key concerns heading into the quarter and revitalized the growth narrative. Additionally, a positive catalyst path is building.”
Bernstein reiterates Tesla as underperform
Bernstein said it still sees minimal positive catalysts ahead for Tesla following earnings on Tuesday.
“We struggle with why Tesla needs a discrete robo-taxi offering, and we believe widespread deployment of FSD [full self driving] is 5 - 10 years away, and that FSD will not necessarily be a winner take all market. While Musk encourages all investors to try the current version of FSD, our first-hand experience with the offering reveals everyday shortfalls.”
Jefferies reiterates Microsoft as buy
Jefferies said it’s bullish heading into earnings on Thursday.
“We view MSFT better-positioned than most (AI & improving cloud trends) & are fans of LT consolidation story.”
Citi reiterates Amazon as buy
Citi raised its price target on the stock to $235 per share from $215.
“While on AWS, demand for new instances appears to be improving, led by GenAI, as optimizations wane. Amazon remains one of our top picks across the Internet sector and given greater OI [operating income] visibility amid strong top-line trends, we raise our TP to $235.”
Loop upgrades Sea Limited to buy from hold
Loop said in its upgrade of the Singapore-based tech conglomerate that “sustainable profitable growth” is finally underway for Sea Limited.
“The recent announcement of a commission rate increase by the combined TikTok-Tokopedia, its first move since merging to satisfy Indonesian regulators, has sparked a revaluation in the stock. In our view, this signals that the shift to sustained profitable growth is finally underway and serves as a significant catalyst for revaluation of the stock.”
KeyBanc initiates Super Micro as sector weight
Key initiated Super Micro Computer with an equal weight rating mainly on valuation.
“Customers of Super Micro include AI-infrastructure leaders such as CoreWeave, Tesla, Meta, X, and Nutanix.”
Redburn Atlantic Equities reiterates Disney as sell
Redburn raised its price target on the stock to $100 per share from $82 but said it’s standing by its sell rating on Disney shares.
“However, longer term expectations hinge on streaming with consensus currently expecting the unit to deliver three quarters of incremental OI [operating income] over the next four years.”
Mizuho upgrades Airbnb to buy from neutral
Mizuho said it sees a slew of positive catalysts ahead for the vacation rental company.
“Our deep dive into ABNB’s key metrics led us to identify three drivers for our upgrade: (1) We expect the potential launch of sponsored listings to generate double-digit EBITDA upside long-term; (2) We believe FY24E consensus room night growth has been de-risked, leaving limited downside concerns.”
Morgan Stanley reiterates Walmart as overweight
Morgan Stanley said it’s sticking with its overweight rating on the stock and that the “fintech flywheel [is] spinning.”
“WMT’s majority-owned fintech JV, ‘One,’ is expanding into BNPL. While likely an immaterial standalone revenue/profit contribution to WMT, this is critical to driving the ‘Flywheel’ and increasing customer engagement/retention.”
Guggenheim downgrades Enphase to sell from neutral
Guggenheim said the solar company is overvalued following earnings on Tuesday.
“We are downgrading our investment rating for ENPH from Neutral to Sell. As the process of excess channel inventory draw down proceeds, we think it’s going to become apparent that the market is overvaluing any reasonable recovery scenario for ENPH’s business.”
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