Wednesday's analyst calls: Carvana gets an upgrade, Goldman sees Tesla decline

Published Wed, Jul 10 20245:51 AM EDTUpdated Wed, Jul 10 202410:01 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 a pharmaceutical giant were among the stocks analysts were talking about on Wednesday. Goldman Sachs raised its price target on Tesla, but it still sees a a decline for the electric vehicle maker. Barclays also hiked its Eli Lilly target, indicating roughly 10% upside. Additionally, Needham upgraded Carvana to buy from hold, calling for more than 25% upside ahead. Check out the latest calls and chatter below. All times ET. 8:40 a.m.: Bernstein initiates coverage of bitcoin miners with AI data center strategies Bitcoin miners have emerged as attractive partners to AI data centers and Bernstein has added two stocks with a hybrid bitcoin/AI data center strategy to its coverage. The firm initiated IREN , formerly Iris Energy, with a $26 price target, implying about 78% upside; and Core Scientific with a $17 price target, implying it could run another 54% higher. It has an outperform rating on both names. Bernstein analyst Gautam Chhugani said in a note late Tuesday night that AI data center revenue provides downside protection to miners that deal with volatile bitcoin prices. For example, bitcoin has been in a slump for several months now and last week briefly extended the declines to more than 25% below its March all-time high. "Bitcoin miners are being undervalued for their 'strategic power portfolio' and monetization option into AI data centers, in a 'power' constrained world," Chhugani said. "We believe AI revenue line provides a downside floor to the miners, with bitcoin driving cyclical upside." Bernstein expects the price of bitcoin to reach $200,000 by 2025 end, led by "rapid" institutional adoption. "IREN and CORZ are best positioned to gain from the hybrid Bitcoin/AI opportunity, in our view. As IREN and CORZ pivot ~15% and ~40% of their power capacity towards AI, we expect 30%-35% of their 2025E EV to be derived from the AI vertical." — Tanaya Macheel 8:07 a.m.: Nomura downgrades Super Micro Computer on AI server order uncertainties Super Micro Computer appears to have limited growth potential ahead, according to Nomura. Analyst Donnie Teng downgraded shares to neutral from buy but kept her $930 price target, which implies just 3.8% potential upside. "After Supermicro's strong guidance for CY4Q23-CY1Q24, we believe Supermicro's performance potential changed from 'easy to beat low market expectations' in CY4Q23 to 'less room to beat already-high market expectations' in CY1Q24," Teng said in a note. Teng expects a mixed near-to-mid-term outlook, saying the company's dominance in liquid cooling solutions could be overshadowed by uncertainties in AI server orders. The transition between Nvidia's Hopper and Blackwell GPUs could affect orders, as GB200 shipments could be a "swing factor" for Super Micro, the analyst said. Teng also thinks Super Micro's June quarterly sales to come out in-line with its guidance as some of its liquid cooling projects were pushed to later quarters, giving the company less momentum to beat guidance. Super Micro shares have been on fire this year, rising 215%. — Pia Singh 7:38 a.m.: JPMorgan hikes Coca-Cola price target ahead of earnings Coca-Cola is hitting the marks that should lead to a second-quarter earnings beat and a rally for its stock, according to JPMorgan. Analyst Andrea Teixeira bumped up the price target on Coca-Cola to $72 per share from $68. The new target is almost 15% above where the stock closed Tuesday. "We continue to see upside to estimates for this year despite some strengthening in the USD as North America performance looks to be more resilient vs. peers and International picture appears to be improving," Teixeira said in a note to clients. Teixeira pointed out that while Coca-Cola trades at a premium to some of its peers, it has underperformed the broader market with a year-to-date gain of 6.4%. "While the relative valuation vs. PEP is high — now 13% premium vs. 5-year average ~1% — we believe a wider spread will remain until there is better visibility on stabilization/inflection in U.S. snacking trends," the note said. Coca-Cola is set to report its second-quarter earnings on July 23. — Jesse Pound 6:57 a.m.: Needham upgrades Carvana to buy, says stock can jump more than 25% Online car seller Carvana is a compelling investment that could lead to "significant value creation" in the long run, according to Needham. Analyst Chris Pierce upgraded his rating to buy from hold and assigned a $160 price target on Carvana, implying shares could jump 27.3%. The stock has gained a whopping 137.4% this year as its profits soared in the first quarter of this year, marking a turnaround for the company — which had lost nearly all of its value in 2022. "We think CVNA can grow unit sales and industry share by leveraging its digital-first customer experience and under-utilized physical footprint," Pierce said in a note. "After a volatile past we see CVNA becoming a profitable secular growth story, with increasing retail unit sales and improving gross profit per unit metrics from leveraging a high-fixed-cost base." Pierce added that Carvana is just beginning to leverage its acquisitions of Adesa's 56 wholesale auction locations in April 2022 in an effort to drive growth and efficiency. The company also has an improving balance sheet, according to the analyst. — Pia Singh 6:28 a.m.: Jefferies names Walmart a top AI pick as retailer invests in automation Walmart remains a top pick for Jefferies given its progress in artificial intelligence and automation. Analyst Corey Tarlowe maintained his buy rating on shares. His $77 price target on Walmart suggests the stock could jump nearly 10.2% over the next 12 months. This year, the stock has gained about 33%. "We continue to believe that the company is in the early innings of a $20B+ EBIT growth opportunity and share below some of the latest developments that include a partnership with Fox Robotics and Sam's Clubs' new exit arch technology," Tarlowe wrote in a note to clients. Tarlowe noted that Walmart entered an agreement and took a minority stake in Fox Robotics, which operates the world's first autonomous, AI-powered forklift that is designed to fully automate the warehouse loading dock. The partnership includes 19 of these forklifts across four of WMT's distribution centers. Also part of Walmart's AI strategy is its automatic receipt verification arches at Sam's Club, a division of Walmart, which expedite the purchase-to-exit process, Tarlowe added. In February, Jefferies wrote that Walmart's operating income could nearly double by the end of fiscal 2029 from fiscal 2023, driven by automation efficiencies, advertising, food waste reductions and freight optimization innovations among other investments. — Pia Singh 6:04 a.m.: Target has 'exceptionally strong merchandising' but missing upside drivers, Piper Sandler says Piper Sandler thinks Target is a safe play for investors with a longer investment horizon. Analyst Peter Keith assumed coverage of the retailer with a neutral rating and $156 price target, suggesting shares can add 5.7% over the next year. Its shares seem "properly valued" for a retailer with this long-term outlook, he said. "We like TGT's strong omni-channel model and believe the company has exceptionally strong merchandising capabilities. Furthermore, we believe both the 2024 EPS guidance and medium-term EBIT margin target of 6% look reasonable," Keith said in a Wednesday note. He added, however, that "we don't see a discernable catalyst to push sales/margin above estimates near-term." Keith said Target provides both "best-in-class" merchandising with a strong focus on customer experience in its stores and online, and expects those traits to help revive the company's sales for the rest of the year. The pace of recovery remains uncertain, however, after a year of slowing Target sales related to boycotts, he said. The analyst also noted that Target has management transition risk and tariff risk as its CEO had agreed in 2022 to stay on for just three more years. Shares are up only 3.6% year to date. — Pia Singh 5:51 a.m.: Barclays expects Eli Lilly to beat earnings, gain nearly 10% Investors should pick up shares of Eli Lilly as the drugmaker looks well-positioned heading into earnings season, according to Barclays. Analyst Carter Gould kept his overweight rating and raised his price target by $112 to $1,025, which implies a roughly 9.9% potential increase for the stock. Gould is bullish on Eli Lilly ahead of its quarterly results due on Aug. 8, saying he sees an attractive set-up for the stock and expects the company to beat analysts' high consensus expectations. "We expect a strong Mounjaro print (+$71mn vs. cons) and in-line Zepbound numbers (+64% q/q), but see room for the company to raise guidance again – and progress ex- Obesity (i.e., Kisunla) adds a new dimension that was lacking over most of '23-'24," Gould said in a Wednesday note. He added he expects increasing appreciation and focus on the "disruptive effect" of Orforglipron, an oral nonpeptide GLP-1 receptor agonist, on the company's current share dynamics. This year, Eli Lilly shares have advanced nearly 60%. LLY YTD mountain LLY year to date — Pia Singh 5:51 a.m.: Goldman raises Tesla price target, but still sees stock slide Don't expect Tesla's recent momentum to last, according to Goldman Sachs. The bank raised its price target on the electric vehicle maker to $248 from $175. However, the new forecast implies downside of 5% from Tuesday's close. The target increase comes after Tesla reported better-than-expected deliveries for the second quarter earlier this month. Since then, shares are up 25%. TSLA mountain 2024-07-01 TSLA since July 2 "While we continue to believe that Tesla is well positioned for longer-term growth given its strong position in the EV and clean energy markets ... we expect weaker market conditions to weigh on earnings in the near to intermediate term. We also see valuation as full," analyst Mark Delaney wrote. He has a neutral rating on Tesla. — Fred Imbert