Tuesday’s analyst calls: Ford Motor gets an upgrade, Alphabet to rally nearly 30%
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(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A legacy automaker and a tech giant were among the stocks being talked about by analysts on Tuesday. Goldman Sachs raised its rating on Ford Motor to buy from hold. Meanwhile, Pivotal Research initiated coverage of Google-parent Alphabet with a buy rating and a price target that implied upside of nearly 30%. Check out the latest calls and chatter below. All times ET. 6:38 a.m.: Pivotal Research initiates Meta as a buy Meta is emerging to be a dominant artificial intelligence force, according to Pivotal Research. Analyst Jeffrey Wlodarczak initiated coverage of the stock at a buy rating. His price target of $780 implies upside of 36% from Monday’s close. Shares of Meta, a “Magnificent Seven” member, have risen 62% this year. Wlodarczak believes that the stock could continue to rally as Instagram emerges as the dominant global social platform. META YTD mountain META year to date The analyst added that Meta’s senior management does not receive enough credit for its “aggressive forward thinking.” Meanwhile, Meta’s AI infrastructure investment could eventually allow the company a material share in search and a boost in efficiencies and monetization. “Looking forward we see a strong revenue growth outlook from increased usage/new products/better targeting/higher prices boosted by cost efficiencies (enabled by AI) and eventually materially declining Reality Labs losses combined with what appears to be an attractive valuation at 24X ’25 EPS,” the analyst wrote. “In a world that is constantly changing fueled by the rapid development of AI we feel comfortable that Zuckerberg can successfully navigate META to the win.” — Lisa Kailai Han 6:35 a.m.: Raymond James upgrades Atlassian to outperform Atlassian shares should do well going forward, according to Raymond James. Analyst Adam Tindle upgraded the software product developer to an outperform from his previous market perform rating. Simultaneously, the analyst set a new target price of $200, which is approximately 26% above Monday’s close. Shares of Atlassian are down 33% on the year, but Tindle sees the company’s fortunes changing. He believes that current guidance for the company’s fiscal 2025 cloud growth is too low: potential tailwinds “should result in cloud growth in the mid/high 20% range vs. the low 20% guidance range.” “We show developer seats metrics and note that this metric has been negative during TEAM’s period of missed Cloud metrics, but this is nearing positive territory, and we want to be ahead of this change with our rating on the stock,” the analyst added. “We also note that revenue sourced from Direct has been in material decline as Atlassian has had turnover in its go-to market organization and is without a CRO [chief revenue officer] at present, but we anticipate this will change in the near future and provide another catalyst.” — Lisa Kailai Han 6 a.m.: Citi downgrades HP to neutral HP Inc will fall victim to a deteriorating industry backdrop, according to Citi. The bank downgraded the personal computer maker to a neutral rating from buy, citing limited upside potential in the near term. Analyst Asiya Merchant maintained her price target of $37, which implies that shares of HP could rise 3%. The stock has gained 19% this year. Merchant pointed to limited near-term upside in the PC category for the downgrade. AI impacts to PC revenue also appear limited for now, with full uplift not materializing until at least next year. The analyst added that mounting Japanese competition, alongside a weakening China economy, might also weigh down HP’s earnings. “The company continues to experience Chinese market headwinds where both Chinese domestic hardware competition and macro headwinds persist, and more notably with no foreseeable print recovery expected, limiting any revenue upside and further pressuring margins hoped to be offset with ongoing cost control efforts,” Merchant wrote. She added: “While we believe continued cost-takeout efforts should be supportive of margins and earnings recovery ahead, the pressures of a likely protracted PC refresh, delayed AI impact, and continued print competition in Japan & China, as well as China macro environment should temper valuations nearer-term from its historical highs.” — Lisa Kailai Han 5:48 a.m.: Goldman Sachs upgrades Ford to buy, sees 23% upside ahead Ford’s robust portfolio gives it a leg up above its peers, according to Goldman Sachs. Analyst Mark Delaney upgraded the automobile manufacturer to buy from neutral. He also raised his price target to $13 from $12. The updated forecast implies that shares of Ford could rally 23% from Monday’s close. Ford is down 13% this year, but Delaney thinks the company’s growing software and services mix could bolster its shares. F YTD mountain F year to date “Overall, we believe this implies that software & physical services for the whole company could account for > $2 bn of EBIT in 2025 and > $4 bn in 2030,” the analyst wrote. “While calculating the effect on total company EBIT can be somewhat difficult with the EV business currently negative, we see these levels of profit and profit contribution as consistent with multiple expansion from our tech industry case studies.” Cost efficiencies in Ford’s electric vehicle unit could also offset some headwinds. Delaney added that Ford Pro, one of the company’s more profitable commercial businesses, could further drive revenue and profit opportunities. Ford Pro includes the newly released Super Duty vehicles. “The company believes its Super Duty portfolio offers best-in-class payload towing and horsepower torque that sets it apart from the competition,” the analyst said. “Ford also believes that its comprehensive supply chain and portfolio are a competitive advantage.” — Lisa Kailai Han 5:48 a.m.: Pivotal Research initiates Alphabet as a buy Google-parent Alphabet shares are too attractive to pass up, according to Pivotal Research. Analyst Jeffrey Wlodarczak initiated coverage of the tech giant with a buy rating. His price target of $215 indicates upside of 29.6% from Monday’s close. Alphabet shares are up more than 18% for the year. However, they’ve lost 9.4% over the past three months as antitrust worries swirl around the company. GOOGL YTD mountain GOOGL in 2024 Still, “if the status quo holds, GOOG appears to be in a very strong competitive position with a deep moat around their dominant core search business model (~90% market share ex China) and an obvious path to leverage 90%+ (ex China) global device presence (which we believe will dominate consumer AI assistant use), a strong AI platform and financial might to increase financial incentives to handset manufacturers for default AI placement,” Wlodarczak wrote. He added that Alphabet’s valuation “appears to discount very conservative post ’27 search revenue declines.” These can be offset by several factors, including a Vice President Kamala Harris win in the November U.S. presidential election. — Fred Imbert
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