Thursday's Biggest Analyst Calls: Nvidia, Microsoft, Netflix, Cvs, Honeywell, Nike, Aig, Sunnova & More

Here are some of the key stock recommendations from Wall Street analysts on Thursday:

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Morgan Stanley Reiterates Nvidia as a Top Pick
Morgan Stanley continues to favor Nvidia, especially after several meetings with the company’s management. According to the firm, Nvidia remains well-positioned for long-term growth in the artificial intelligence (AI) sector. Management’s insights suggest that the AI investment cycle is still in its early stages, with significant potential ahead. This underlines Morgan Stanley’s confidence in Nvidia’s future, solidifying its place as one of their top picks.

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Morgan Stanley Reiterates Netflix as Outperform
Morgan Stanley also maintained its “outperform” rating on Netflix and raised the price target from $780 to $820 per share. The firm remains bullish on Netflix for several reasons: a long runway for revenue growth, expectations for operating leverage and earnings per share (EPS) that surpass consensus estimates, and a competitive edge that continues to strengthen. The firm’s confidence is further boosted by upcoming earnings results that are expected to reflect these favorable conditions.

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Barclays Upgrades CVS to Overweight
Barclays has upgraded CVS from “equal weight” to “overweight,” citing the company as a “new margin story.” The price target has been adjusted from $63 to $82, reflecting optimism surrounding CVS’s margin expansion and future profitability. Barclays sees potential for the stock to perform well as the company’s business strategy evolves.

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JPMorgan Downgrades Honeywell to Neutral
After maintaining an overweight rating on Honeywell for 15 years, JPMorgan has downgraded the stock to “neutral.” The decision comes despite new management’s positive direction, which JPMorgan believes is beneficial for the company’s long-term future. However, concerns surrounding a recent spin-off that could dilute earnings have caused the firm to step back. JPMorgan notes that while the stock is cheap, it remains a consensus long for sell-side analysts, leaving little room for further gains in the near term.

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Goldman Sachs Reiterates Microsoft as Buy
Goldman Sachs has reaffirmed its buy rating on Microsoft but has lowered the price target from $515 to $500 per share. Despite the price adjustment, the firm remains optimistic about Microsoft’s future, particularly its first-mover advantage in AI and continued focus on innovation in the space. Goldman Sachs believes Microsoft is well-positioned to remain a leader in AI, with a solid outlook for growth in this area.

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UBS Upgrades Tronox to Buy
UBS upgraded chemical manufacturer Tronox from “neutral” to “buy,” raising its price target to $19. The firm sees around 35% upside potential for the stock, driven by improving business conditions and growth prospects in the chemicals sector.

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Jefferies Initiates Sunnova as Buy
Jefferies initiated coverage on solar company Sunnova with a buy rating. According to Jefferies, Sunnova is poised to be a top turnaround story in clean energy after revising its 2024-2026 cash flow outlook upward by 70%. The company’s outlook improved after new domestic content guidelines were issued, which are expected to boost its performance in the coming years.

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TD Cowen Downgrades Pepsi to Hold
TD Cowen downgraded Pepsi from “buy” to “hold,” noting that the company’s aggressive pricing strategy in its three largest U.S. categories may have gone too far. The firm believes this will strain Pepsi’s value proposition to consumers, potentially weakening its pricing power in the near term.

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UBS Upgrades EVgo to Buy
UBS upgraded electric vehicle charging company EVgo from “neutral” to “buy” following a recent Department of Energy loan commitment. The $1.05 billion loan provides increased visibility for EVgo’s stall deployment plans beyond 2025, potentially accelerating its growth trajectory. UBS is optimistic about the company’s future as it capitalizes on this new funding.

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Goldman Sachs Initiates Builders FirstSource as Buy
Goldman Sachs initiated coverage of Builders FirstSource with a buy rating, citing the company’s strong positioning to benefit from a housing market recovery. The firm expects Builders FirstSource to outperform in the coming years, driven by macroeconomic trends, industry dynamics, and company-specific factors that should enable above-average earnings growth.

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RBC Upgrades Medtronic to Overweight
RBC upgraded Medtronic from “sector weight” to “overweight,” expressing increased confidence in the company’s core business. The firm believes Medtronic is poised for mid-single-digit sales growth, supported by positive healthcare utilization trends. Additionally, RBC sees several growth opportunities for the company, positioning it for potential upside in the near term.

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Bernstein Downgrades PayPal to Market Perform
Bernstein downgraded PayPal from “outperform” to “market perform,” citing uncertainty in the stock’s future path. While the firm had previously upgraded PayPal due to better product velocity and attractive valuation, current conditions have prompted a more cautious approach.

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Barclays Downgrades Cirrus to Equal Weight
Barclays downgraded Cirrus from “overweight” to “equal weight,” expressing concerns that expectations for the company’s handset business are too high. The firm anticipates that December numbers may be lower than expected, which could act as a negative catalyst for the stock.

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Bank of America Upgrades Brinker to Neutral
Bank of America upgraded Brinker, the parent company of Chili’s, from “underperform” to “neutral,” citing a more balanced risk/reward profile. The upgrade reflects optimism surrounding Chili’s turnaround efforts under CEO Kevin Hochman, which have led to a year-to-date rally in the stock.

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Truist Upgrades Nike to Buy
Truist upgraded Nike from “hold” to “buy,” noting that investor expectations have finally adjusted to the reality of the company’s turnaround process. While the process remains long and uncertain, the firm is more optimistic about Nike’s shares moving forward.

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BTIG Initiates Birkenstock as Buy
BTIG initiated coverage of Birkenstock with a buy rating, highlighting the company’s strong brand legacy and expansion potential. The firm expects Birkenstock to deliver double-digit top-line growth with stable to improving margins, making it a compelling retail growth story.

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Cantor Fitzgerald Initiates Mara Holdings as Overweight
Cantor Fitzgerald initiated coverage of bitcoin miner Mara Holdings with an “overweight” rating, noting that the company provides a way for investors to gain exposure to Bitcoin.

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Wolfe Upgrades L3Harris Technologies to Outperform
Wolfe upgraded L3Harris Technologies from “peer perform” to “outperform,” citing confidence in a turning point for the company’s sales and earnings growth. The firm also expects mid-teens free cash flow growth, making the stock an attractive pure-play defense option at a reasonable price.

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JPMorgan Upgrades AIG to Overweight
JPMorgan upgraded insurance company AIG from “neutral” to “overweight,” highlighting its outsized EPS growth and capital flexibility. The firm believes AIG’s valuation is attractive, especially given its lower exposure to risks faced by commercial lines carriers.

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Bank of America Reiterates Alphabet as Buy
Bank of America reiterated its buy rating on Alphabet, despite reports of a potential breakup by the Department of Justice. The firm remains optimistic about Google’s position in the search market and expects the company’s counterproposals to provide a more positive outcome.

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