Monday's analyst calls: Nvidia price target hike, shoe stock to rally more than 50%

Published Mon, Jul 1 20245:47 AM EDTUpdated Mon, Jul 1 20248:19 AM EDT

(This is CNBC Pro's live coverage of Monday's analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A major chipmaker and a shoe maker were among the stocks being talked about by analysts on Monday. Morgan Stanley hiked its price target on Nvidia to $144, implying upside of 16.5%. Meanwhile, UBS upgraded Birkenstock to buy from neutral. Check out the latest calls and chatter below. All times ET. 7:47 a.m.: Abbott Labs can climb more than 30%, Barclays says Shares of Abbott Laboratories appears to be too beaten down ahead of potential legal losses in a baby formula trial, according to Barclays. Abbott's stock has been struggling since March, when rival Reckitt Benckiser was ordered by pay $60 million in a similar trial. Barclays analyst Matt Miksic said the underperformance of the stock may have gone too far. "Given what we believe to be a discount in the stock disproportionate to the risks related to the litigation, we see the potential for rising investor interest in ABT leading up to and following the results of this first bellwether trial," the note said. "While we will not attempt to predict the outcome of this trial, if the outcome remains substantially below the Reckitt award ($60 mil), we would expect investors to become increasingly comfortable stepping back into the stock." Barclays maintained its price target on Abbott at $140 per share, which is more than 30% above where the stock closed Friday. — Jesse Pound 7:30 a.m.: JPMorgan initiates Amkor Technology at overweight Amkor Technology is the latest beneficiary of the artificial intelligence trade, according to JPMorgan. The bank initiated shares of the semiconductor manufacturing company at an overweight rating, setting a price target of $48. Amkor stock has rallied 20% this year. Analyst Peter Peng's price forecast implies that the stock could climb another 20% on the back of an industry cyclical recovery. "We see a positive fundamental setup for Amkor, driven by the broader semiconductor recovery on top of continued outsourcing demand trends, customer share gains, advanced packaging growth, and its geographical positioning/footprint," he wrote. Meanwhile, Amkor is also a beneficiary of the emerging artificial intelligence trend. The company is also headquartered in the U.S., which means that it should benefit from the semiconductor on-shoring trend, Peng added. — Lisa Kailai Han 7:26 a.m.: Piper Sandler moves off sidelines on beat-down Teleflex Piper Sandler has several reasons to be optimistic on Teleflex despite a poor run this year. Analyst Matt O'Brien upgraded shares of the medical device stock to overweight from neutral. O'Brien also hiked his price target by $40 to $245, which now implies upside of 16.5% from where the stock finished last week. "With some of the earnings pressures easing next year and a modest valuation (less than 14x '25E on a P/E basis), we believe now is the time to upgrade the stock," he wrote in a Monday note to clients. O'Brien listed the following as potential catalysts for the stock: UroLift sales in physicians offices starting to bottom Challenges at a competitor that can create a durable sales boost Strong revenue contributions from the Barrigel product line O'Brien's target price would reflect a turnaround for the stock, which has fallen more than 15% so far in 2024. — Alex Harring 7:24 a.m.: Royal Bank of Canada downgrades NextEra Energy Partners, says stock could plummet 58% Royal Bank of Canada sees a "challenging road ahead" for NextEra Energy Partners . Analyst Shelby Tucker downgraded the renewable energy stock to a sector perform rating from his previous outperform rating. The analyst accompanied the move by lowering his price target to $30 from $38. Shares of NextEra Energy Partners have fallen 9% this year. Tucker's updated rating implies that the stock could rise 21%. Tucker cited the firm's convertible equity portfolio financing liabilities as a reason of concern, making the analyst "uncomfortable" with the firm's future risk-return profile. "NEP's CEPF liability of $3.7B post-2026 quickly approaches, and we do not have full confidence in the suite of solutions being sufficient to maintain a healthy CAFD run-rate to satisfy its dividend payout," he wrote. Growth from wind repowerings will help offset some of the firm's financing headwinds, but will still prove insufficient, Tucker added. Against this backdrop, the analyst believes that NextEra will be forced to cut its dividend in the upcoming future. — Lisa Kailai Han 7:19 a.m.: Morgan Stanley reiterates optimism for Cedar Fair and Six Flags merger Morgan Stanley sees good things ahead for the newly-formed company between Cedar Fair and Six Flags Entertainment. Analyst Thomas Yeh stood by his overweight rating for the amusement park company and lifted his price target to $65 from $55. Yeh's updated forecast implies that shares could rally 20% from their current levels. Shares of Cedar Fair already gained nearly 37% this year. Despite this strong year-to-date runup, Yeh believes that the merger between the two companies, due to close on Monday, July 1, will bring further upside for the stock. "With the FUN-SIX merger closing without material conditions, synergy realization and Six Flags revenue catch-up are the key catalysts ahead," the analyst wrote. "Our OW rating on FUN is underpinned by our view that current valuation still underappreciates the growth potential of the proforma company." Besides new cost synergies, Yeh said the new company could also see a continuing attendance recovery, further lifting its margins. "2024 remains a year of accelerating revenue growth," he added. — Lisa Kailai Han 6:48 a.m.: Goldman Sachs upgrades Intercontinental Exchange to buy Goldman Sachs thinks the outlook ahead for Intercontinental Exchange looks rosy. The bank upgraded the financial exchange and clearing house to buy rating from neutral. It also lifted its 12-month price target to $167 from $143, corresponding to 22% upside. "After < 10% EPS growth over the last 3 years, we see ICE's EPS growth inflecting higher into low-teens in 2025 and beyond," wrote analyst Alexander Blostein. As a catalyst, Blostein cited Intercontinental Exchange's global leadership in energy markets, supported by natural gas globalization and a widening customer base. "Importantly, recent growth has been driven entirely by higher Open Interest (up ~30% across Oil, Nat Gas, etc), underscoring widening product uptake even as Energy volatility remains below historical levels," he added. "Longer-term, AI-driven demand for power should add incremental tailwinds to ICE's Energy (Nat Gas) growth algo." All in all, Blostein expects growing margins from the company's exchange revenues business, alongside higher free cash flow, to drive a faster pace of share repurchases by the end of 2024. Shares of Intercontinental Exchange have added 7% this year. ICE YTD mountain ICE year to date — Lisa Kailai Han 6:27 a.m.: Deutsche Bank lifts its price target for Walmart Deutsche Bank thinks that a myriad of catalysts will push Walmart's stock higher. Analyst Krisztina Katai stood by her buy rating for the retail giant but upped her price target to $77 from $71. Shares of Walmart have added 29% this year. Katai's updated forecast is roughly 14% from where the stock closed on Friday. "Increased visibility into WMT's earnings power from its high-margin alternative businesses – allowing the market to value its two businesses separately – will result in further multiple upside, in our view, making the investment case on WMT compelling," Katai wrote. The analyst added that Walmart sees an opportunity for more gains as higher-income consumers shop at its stores — which could indicate that the brand's perception is changing. "Further, the quality of assortment is improving (e.g. WMT sells Apple computers), which we think will begin to drive upside as sales mix improves," she added. Katai also highlighted that additional profit opportunities could exist within alternative value streams, including advertising, membership, marketplace, fulfillment services and data monetization. Meanwhile, the company is also growing its e-commerce profitability, although it remains a loss leading business for the company. Additional catalysts for Walmart come from potential supply chain automation, private label penetration, store remodels and a growing international business. — Lisa Kailai Han 6 a.m.: Goldman Sachs initiates Verizon at a buy rating An improving industry backdrop will lend itself favorably to Verizon , according to Goldman Sachs. The bank initiated coverage of the telecommunications giant at a buy rating. Analyst James Schneider assigned the stock a 12-month price target of $50, which corresponds to a 21% increase from its Friday closing price. Shares of Verizon have climbed 9% in 2024. However, Schneider thinks the stock could continue climbing amid a favorable industry backdrop. "We see an improving competitive backdrop for mobile network operators in the US, punctuated by a period of declining capital intensity — a condition which has not existed in over a decade," he wrote. "We believe Verizon can deliver a sustained return to revenue, EBITDA, and free cash flow growth over the coming 18 months with potential for a buyback in 2025 — and think the stock can re-rate as this occurs." As a catalyst, Moore highlighted Verizon's improving execution in its core wireless business, which the analyst called a self-sustaining trend. He also noted Verizon's active deleveraging efforts, which could help its capital allocation story. Moore added that Verizon has a "significant runway" for its fixed wireless product cycle to grow among its consumer and business base. "Taken together with a continued moderate pace of FiOS net additions, we believe Verizon can grow its broadband business for the foreseeable future, thus mitigating ongoing business wireline declines," he said. — Lisa Kailai Han 5:47 a.m.: Morgan Stanley hikes its Nvidia price target Nvidia should continue rising as its next generation of chips arrives, according to Morgan Stanley. Analyst Joseph Moore raised his price target for Nvidia to $144 from $116. The new forecast implies shares could rally nearly 17% from Friday's close. Moore has an overweight rating on the stock. Nvidia has soared 149% this year. The analyst noted the artificial intelligence darling has a high bar to clear based on its valuation, but other factors mitigate this elevated multiple. NVDA YTD mountain NVDA year to date "We aren't pounding the table at these levels given the sharp appreciation since the last earnings report, but this remains the most compelling narrative in the AI semis space, and as we transition from H100 to H200 and then Blackwell, visibility and backlog will improve materially," he wrote. As a catalyst, Moore cited robust existing demand for Nvidia's current microarchitecture of chips, Hopper. "Hopper builds continue to go up, as H100 starts to transition to H200 (bringing better memory bandwidth from HBM3e as well as higher memory content), and we are hearing confidence that sales of both products will remain strong," he wrote. Meanwhile, "considerable enthusiasm" for Blackwell, Nvidia's next-generation AI GPU, could continue to propel the company's AI-related earnings higher, the analyst noted. — Lisa Kailai Han 5:47 a.m.: UBS upgrades Birkenstock to buy UBS sees major gains ahead for Birkenstock . The bank upgraded the shoe maker to buy from neutral. Its price target of $85, up from $52, implies upside of 56% over the next 12 months. "Our upgrade of BIRK is based on: 1) BIRK is successfully executing its [direct-to-consumer] expansion strategy better than we expected. 2) We see BIRK ramping rapidly in Asia-Pac. 3) We see [average sales prices] moving higher than previously thought, driven by a positive sales mix shift to DTC and successful intros of premium priced products in new categories." analyst Jay Sole wrote. He also noted that his previous neutral rating on the stock was based on brand momentum worries and execution risk from new factories opening, among others factors. Birkenstock shares have climbed nearly 12% year to date. Over the past three months, the stock is up 16%. BIRK YTD mountain BIRK year to date — Fred Imbert