Friday’s Biggest Analyst Calls: Rivian, Draftkings, Nio, Fox, Carvana, Pfizer and More

Friday's notable calls on Wall Street encompass a range of perspectives on various stocks:

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UBS has opted to double-downgrade Rivian, advising investors to sell shares in the electric vehicle maker. This move aligns with a growing cohort of analysts expressing concerns post the company's earnings report. UBS reevaluated its optimistic outlook, citing the rapidly evolving electric vehicle landscape, which prompted a reassessment of Rivian's demand prospects and deemed its current profitability and cash flow strategy burdensome on the path to sustainability.

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Barclays, in a contrasting move, upgraded DraftKings, elevating its rating on the sports betting stock from equal weight to overweight. The investment bank also raised the price target, emphasizing a more expansive market size than previously anticipated. Barclays views the recent pullback in stock value as an attractive entry point, being less concerned about increased competition compared to the preceding months.

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Citi upgraded Fox, shifting its rating to buy from neutral. This decision was influenced by Fox's recent collaboration on a sports streaming service with other media giants. Citi's analysis suggests that the joint venture will be advantageous for Fox, leading to a modest increase in revenue and EBITDA estimates in FY25 and FY26. Additionally, the joint venture is expected to position Fox more robustly, reducing exposure to the secular pressures affecting the Pay TV ecosystem.

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UBS upgraded Ross Stores, revising its stance on the stock from sell to neutral and expressing expectations for a solid quarterly report. UBS sees reduced risk to Ross Stores' long-term earnings outlook, attributing this shift to several factors: the fading of macroeconomic headwinds, confidence in Off-Price retailers gaining market share over Department Stores, and the identification of more margin expansion potential in Ross Stores than previously estimated.

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Raymond James upgraded Carvana to market perform from underperform following the fourth-quarter earnings results. While the previous downgrade was based on the belief that Street estimates for adjusted EBITDA were reasonable, the upgraded forecast now reflects better-than-expected GPU trends in QTD in 1Q24. Carvana's cautious navigation of sector pressures and structural improvements in the business contributed to the positive adjustment.

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Guggenheim initiated coverage of Pfizer with a buy rating and a $36 price target. The biopharmaceutical stock's underperformance over the past two years was noted, and Guggenheim believes that expectations for Pfizer's COVID assets have appropriately adjusted. The firm sees potential for near-term estimates to increase if Pfizer successfully commercializes significant opportunities, providing support to the stock's current ~6% dividend yield.

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Raymond James upgraded ATN International to strong buy from outperform after the company's earnings report. The selloff following the results was deemed surprising, potentially more related to fund flows than fundamentals. ATN International's strategic shift away from legacy U.S. wireless wholesale roaming business and its investment in fiber broadband and towers are expected to drive positive free cash flow, marking an inflection point.

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Morgan Stanley downgraded Brighthouse Financial, switching its rating to underweight from equal weight. Among annuities carriers, Morgan Stanley perceives Brighthouse as less favorably positioned than Equitable in the current macro environment. Despite Brighthouse working through challenges, Morgan Stanley foresees a longer path to capital returns and slower earnings generation relative to Equitable.

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JPMorgan downgraded Penumbra to neutral from overweight based on the company's recent track record, including a miss in 4Q and an in-line 3Q. While Penumbra is performing well on a growth basis, concerns about valuation and better opportunities in the coverage universe led to the downgrade.

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Rosenblatt initiated Adeia with a buy rating and a $15 price target. Adeia's profitability profile, strong growth potential in media and semiconductor IP, and undervaluation were highlighted. The firm recommended investors consider Adeia shares, emphasizing the stock's overlook since its separation from Xperi in October 2022.

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JPMorgan upgraded Fluence Energy to overweight from neutral following a short report-induced drop in share prices. The firm views the pullback as a buying opportunity, considering the encouraging trends of a building backlog and rebounding gross margins.

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Roth MKM initiated coverage of CPI Card Group with a buy rating and a $40 price target. The financial technology stock's accelerated traction in moving customers to higher-value contactless EMV cards during the COVID-19 pandemic was noted. The period of issuer inventory digestion is expected to clear by 2H24, lifting the outlook for CPI Card Group.

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JPMorgan downgraded Nio, the electric vehicle maker, to underweight from neutral. The downgrade reflects a cautious view on the company's sales and earnings momentum in a highly competitive market, with potential downside risks to consensus forecasts.

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Seaport upgraded Block to buy from neutral following its latest earnings release. The financial technology company's progress in organizational streamlining, focus on key businesses, and commitment to driving profitable growth impressed Seaport. The firm raised forecasts for adjusted EBITDA and sees Square on its way to executing against its Rule of 40 framework by 2026, with perceived room for further upside in the shares.

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