Wednesday's analyst calls: Tesla earnings reaction, Airbnb gets an upgrade

Published Wed, Apr 24 20245:48 AM EDTUpdated Wed, Apr 24 20248:22 AM EDT

(This is CNBC Pro's live coverage of Wednesday's analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Tesla and Airbnb were among the biggest analyst calls for Wednesday. Analysts around the Street reacted to Tesla's latest quarterly results. While shares rallied on the back on the report, many of those covering the EV maker remained skeptical on the company's prospects going forward. Elsewhere, Mizuho upgraded Airbnb to buy. Check out the latest calls and chatter below. All times ET. 8:22 a.m.: Guggenheim downgrades Enphase Energy after earnings miss It's going to be tough for Enphase Energy to pull out of its slide after a rough first quarter, according to Guggenheim. Enphase reported 35 cents in adjusted earnings per share for the first quarter, below the 40 cents expected by analysts polled by LSEG. Revenue was also softer than expected. Guggenheim analyst Joseph Osha downgraded Enphase Energy to sell from neutral, saying that rebound scenarios look increasingly unlikely. "What is harder for us to see is how ENPH's end demand accelerates once the much anticipated inventory draw down is over with. The company faces some fundamental challenges that are not changing in our opinion, or are in some cases getting worse," Osha said in a note to clients. Osha added that Enphase could lose market share in the U.S. going forward. Guggenheim set a price target of $92 per share for Enphase Energy, which is about 20% below where the stock closed Tuesday. — Jesse Pound 8:20 a.m.: CyberArk could be a beneficiary of IBM's reported acquisition of HashiCorp, Bank of America says CyberArk is a possible beneficiary if IBM's reported acquisition of HashiCorp goes through, according to Bank of America Securities. Analyst Tal Liani said CyberArk could benefit from easing pricing pressures if IBM acquires HashiCorp, which was reported by the Wall Street Journal this week using unnamed sources. CyberArk and HashiCorp are competitors in the secrets management market, securing developer secrets such as application programming interface keys (API). "IBM's potential acquisition of HashiCorp could alleviate the competitive pressure, as historical trends indicate disruptive companies typically experience a slowdown in innovation as well as disruptions in GTM (go-to-market) efforts when acquired by large, legacy tech firms such as IBM," Liani wrote. The analyst maintained a buy rating on CyberArk with a $315 price target implying more than 30% upside. Shares are up more than 9% this year. They rose 1.2% in premarket trading. "We believe the acquisition will create a unique opportunity for CyberArk to expand its market share, stabilize pricing and reinforce its position as an industry leader in the Secrets Management space as HashiCorp will likely face friction from the acquisition," Liani added. — Sarah Min 8:10 a.m.: Deutsche Bank upgrades MSCI MSCI's slide after a disappointing earnings report has created a compelling entry point for long-term shareholders, Deutsche Bank said Wednesday. The provider of investment indexes reported revenue that missed analysts' expectations on Tuesday, sending the stock down more than 13%. "We see the issues that manifested in the quarter as largely cyclical, as opposed to structural," analyst Faiza Alwy wrote in a note. She expects net new sales to accelerate from here since the first quarter is typically a seasonally weak period. "The pipeline seems to be solid, and cancellation trends should improve noting $7m of impact from Swiss banks consolidation," Alwy said. Shares of MSCI were up 2.8% in premarket trading. — Michelle Fox 7:43 a.m.: KBW upgrades Globe Life, citing 'meaningful value' despite risks Keefe, Bruyette & Woods upgraded the insurance company Globe Life on Wednesday, despite recent weakness in the stock stemming from a DOJ subpoena and a short report alleging fraud. "We acknowledge ongoing risk from these accusations, but feel better following GL's response on the 1Q24 call that included a willingness to accelerate and possibly increase buybacks," KBW's Ryan Krueger said in a note. "Our updated analysis estimates GL's run-off value at ~$80 in a distressed run-off scenario that we assign a 35% weighting for valuation purposes." KBW upgraded Globe Life to outperform from market perform, but lowered its price target to $110 from $130. The shares rose more than 1% in premarket trading. The shares have fallen about 35% for the month. On Tuesday they gained 14%. — Tanaya Macheel 7:34 a.m.: Redburn Atlantic stands by sell rating for Disney Walt Disney is likely to face a challenging future, at least in the near-term, according to Redburn Atlantic. The investment firm reiterated its sell rating on the entertainment giant. Analyst Hamilton Faber did lift his price target to $100 from $82, which implies that shares of Disney could slide 12% from their Tuesday closing price. "We believe the majority of major catalysts are now in the past (e.g. activist attention, cost cutting), and the debate will refocus on top line trends," he wrote. Shares of Disney have rallied 26% this year. Faber thinks the company is more likely to miss consensus expectations than meet them, which will lead to near-term multiple pressure. For instance, consensus estimates that Disney will grow its direct-to-consumer revenue by 11% on average over the four years, which the analyst said would be "a challenge." "Disney+ engagement needs to be higher for pricing growth to be a material long-term growth driver." Faber added. Meanwhile, Disney faces another challenge as it balances making new content on lower budgets, with Faber citing "superhero fatigue" as a potential obstacle for the company. "The near-term decision to limit franchise releases will likely impact near-term streaming volume performance but does seem to be the right move for longer-term franchise health," he said. — Lisa Kailai Han 7:17 a.m.: Citi downgrades Molson Coors Notable beverage company Molson Coors is showing signs of a downward inflection, according to Citi. The firm downgraded shares to sell from neutral and lowered its target price to $56 from $66, implying shares falling 12.7% from Tuesday's close. Although Molson Coors had a record year in 2023 — benefiting heavily from competitor Anheuser-Busch's Bud Light controversy — it will be difficult to follow up such growth, according to analyst Filippo Falorni. "While TAP has sounded bullish on Q1 trends (still on normal comps) and spring shelf space resets, we believe cycling a record topline/profit year (TAP indicated it realized six years of profit growth in 2023) could be extremely difficult," said Falorni. "Scanner data for early April suggest sales/volume trends for TAP's beer brands have turned negative, which we expect to continue as comparisons get more difficult," he added. Shares of Molson Coors are up just 4.8% year to date, slightly lagging behind the S & P 500's 6.3% rise. — Hakyung Kim 6:48 a.m.: Loop Capital upgrades Sea Limited Southeast Asian tech giant Sea Limited could see a turnaround toward profitable growth, said Loop Capital. Analyst Rob Sanderson upgraded shares to buy from hold. He also hiked his price target to $92 from $59, suggesting shares rallying 48.3% from where they closed on Tuesday. The company, which has e-commerce, financial services and gaming businesses, has struggled with valuation pressure over the last two years due to share loss to TikTok and strong competition, Sanderson said. However, it posted its first profitable year in March 2023. CEO and chairman Forrest Li said he also expects 2024 to be a profitable year. However, 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," Sanderson wrote in a Wednesday note. Shares gained nearly 4% Wednesday before the bell. — Hakyung Kim 6:43 a.m.: Bank of America stays bullish on Spotify Bank of America reiterated its buy rating on Spotify after the streaming service posted a record quarterly profit. Spotify announced its first-quarter results on Tuesday, beating on top and bottom lines following a year of cost cutting and streamlining efforts. Analyst Jessica Reif Ehrlich raised her price target to $370 from $315, suggesting 22% upside from Tuesday's close. "SPOT is at an inflection point in profitability and free cash flow," the analyst said in a Tuesday note. She cited improving advertising and deeper penetration in existing markets. In addition, forthcoming price hikes, capital returns potential and new business lines also strengthen the story around Spotify, she added. — Hakyung Kim 6:04 a.m.: Citi raises price target on Amazon Amazon is becoming a more profitable organization, according to Citi. Analyst Ronald Josey raised his price target to $235 from $215, implying nearly 31% upside from Tuesday's close. He maintained his buy rating on the stock. The price target increase comes on the heels of Amazon's new grocery delivery subscription launch. "Amazon remains one of our top picks across the Internet sector," Josey said in a Wednesday note. He cited increased operating income projections amid strong top-line trends for his price target increase. Heading into the company's first quarter earnings release on April 30, Josey said he is focusing e-commerce strength, improving demand trends for Amazon Web Services and retail margin expansion. Advertising demand in its Prime Video segment and Grocery segment performance are also key focus areas, the analyst added. "Given faster shipping speeds, we believe conversion rates are improving as Amazon's retail business benefits from its regionalization approach with shorter transport distances as the overall cost to serve comes down," said Josey. "While on AWS, demand for new instances appears to be improving, led by GenAI, as optimizations wane." — Hakyung Kim 5:48 a.m.: Wall Street remains skeptical on Tesla Tesla shares are up 10% following its first quarter earnings announcement — but Wall Street analysts aren't feeling as enthusiastic on the stock. The electric vehicle maker missed on both top and bottom lines. Revenue fell 9% on a yearly basis, the steepest annual decline since 2012. Nonetheless, "the report was better than relatively low investor expectations," according to Goldman Sachs. Automatic non-GAAP gross margins, despite decline on a sequential and yearly basis, still topped estimates, per analyst Mark Delaney. Tesla's update that it is planning on launching a low-cost model — not the Model 2 — using elements from existing lines to "pull-in timing should help to mitigate intermediate to longer-term growth concerns," Delaney wrote in a note. TSLA YTD mountain TSLA year to date Goldman is sticking with its neutral rating on the stock due to ongoing questions and concerns around vehicle volumes, robotaxi outlook and concerns surrounding competition and demand. Its $175 price target suggests 21% upside from Tuesday's close. UBS is also staying on the sidelines. Analyst Joseph Spak reiterated his neutral rating while notching down his price target to $147 from $160. Spak believes near-term visibility is cloudy due to its pivot to AI. "TSLA took the ultimate bear case off the table as there is a new, lower-cost product coming," Spak said in a Tuesday note. But, "while we see improvement from 1Q24 levels, we see limited growth for [the] current lineup and lack of clarity on what these "new vehicles" could bring. "There are still several unanswered questions around the new low-cost vehicle," Spak noted. Wells Fargo's Colin Langan is more bearish. He kept his underweight rating on the stock following the quarterly results, citing rushed timing of the new models and a weak fundamental backdrop. "We suspect the release of deferred [full self-driving] sales explains most of the Q1 beat. Post call excitement, fundamental risks around demand & px pressure continue," Langan said in a client note on Tuesday. — Hakyung Kim 5:48 a.m.: Mizuho upgrades Airbnb Airbnb is on a roll, and Mizuho expects even more gains ahead. Analyst James Lee upgraded the short-term housing rental company to buy from neutral. His new price target of $200, up from $150, implies upside of 24%. Shares were up more than 1% in the premarket. The stock has been on fire this year, soaring 18.2%. ABNB YTD mountain ABNB year to date Lee cited three drivers for the upgrade. First, "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; (3) We see opportunities to beat room night growth with incremental demand from Summer Olympics and share gains from elevated hotel pricing." — Fred Imbert