Tuesday's Biggest Analyst Calls: Nvidia, Amazon, Alphabet, Mcdonald's, Adobe, Tesla & More

On Tuesday, Wall Street analysts issued several key ratings updates, covering a range of companies across various industries. Here’s a breakdown of the biggest calls:

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Valvoline: Stephens Initiates Coverage at Overweight

Stephens began coverage on Valvoline, an automotive retailer, with an Overweight rating and set a price target of $49. The firm is optimistic about the company’s positioning in the market.

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Alphabet: Evercore ISI Adds Tactical Outperform

Evercore ISI gave Alphabet a "tactical outperform" rating ahead of its upcoming earnings. The firm noted that Alphabet’s stock has underperformed during the quarter, but expectations for Q3 remain relatively modest. For Search, they expect a 1% quarter-over-quarter growth, with YouTube and Cloud services seeing 3% growth each. Evercore believes Alphabet’s overall operating margins will also be under scrutiny during the earnings release.

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Tesla and Rivian: Wells Fargo Remains Cautious

Wells Fargo reiterated its Underweight rating on Tesla and an Equal Weight rating on Rivian. Both electric vehicle manufacturers reported disappointing Q3 delivery numbers. Wells Fargo expects Tesla to continue using aggressive financing promotions globally to maintain volumes, estimating that the company’s Q3 promotions resulted in an effective price cut of around 8%. They anticipate both companies will miss Q3 estimates.

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Cadence Design and Synopsys: Berenberg Initiates Buy Ratings

Berenberg initiated coverage on semiconductor design companies Cadence Design and Synopsys with Buy ratings. These two firms are among the largest providers of semiconductor design solutions, and their products are critical during the development stages of the semiconductor lifecycle.

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Netflix: Wedbush Reiterates Outperform

Wedbush reiterated its Outperform rating on Netflix, raising the price target to $775 from $725. The firm believes Netflix is well-positioned to increase its revenue from its ad-supported tier, particularly as it improves its advertising capabilities and partnerships. They also see potential growth through the addition of more live events, which could drive ad revenue further into 2025.

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Nvidia: Evercore ISI Reiterates Top Pick

Evercore ISI continues to highlight Nvidia as one of its top picks, alongside companies like Marvell Technology, Broadcom, AMD, and Advanced Labs. The firm is bullish on these tech companies heading into their earnings reports.

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Consolidated Edison: Citi Upgrades to Buy

Citi upgraded Consolidated Edison (ConEd) from Neutral to Buy, highlighting that the utility company's financial performance is tied to weakness in data center-exposed utilities. Citi’s analysts believe that ConEd’s earnings and return on equity are linked to this sector, and they see an opportunity in the current market.

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Duke Energy: Mizuho Upgrades to Outperform

Mizuho upgraded Duke Energy from Neutral to Outperform, recommending that investors take advantage of the recent selloff following storms in the Southeastern U.S. The firm views the decline in share price as a buying opportunity.

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Doximity: Barclays Upgrades to Overweight

Barclays upgraded Doximity, an online networking service for medical professionals, to Overweight with a new price target of $52. Barclays is optimistic about Doximity’s growth potential, particularly as it expands its self-service ad sales capabilities.

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Etsy: Goldman Sachs Downgrades to Sell

Goldman Sachs downgraded Etsy from Neutral to Sell, lowering its price target to $45 from $70. The firm expressed concerns about Etsy’s long-term market share, as well as potential margin compression in 2025. They cited a lack of visibility into gross margin sales as a risk factor.

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Mobileye: RBC Downgrades to Sector Perform

RBC downgraded Mobileye to Sector Perform from Outperform, pointing to negative catalysts in the autonomous vehicle market. The firm noted recent guidance cuts from major automakers like BMW, Mercedes, Volkswagen, and Stellantis as a cause for concern, and they are cautious about any near-term wins for Mobileye.

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Enphase Energy: RBC Downgrades to Sector Perform

RBC also downgraded Enphase Energy to Sector Perform from Outperform. The downgrade reflects a shift in valuation methodology and rising competition in the solar energy market, which RBC believes will result in slower growth for Enphase next year, a factor not reflected in current consensus estimates.

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DHT Holdings: BTIG Initiates Buy Rating

BTIG initiated coverage on DHT Holdings with a Buy rating. The firm highlighted DHT’s position as a pure-play crude oil tanker company, focusing on very large crude carriers (VLCC). BTIG expects a multi-year upcycle in the tanker market and sees DHT as well-positioned to benefit from it, offering investors an attractive dividend as part of the value proposition.

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McDonald’s: Morgan Stanley Reiterates Overweight

Morgan Stanley reiterated its Overweight rating on McDonald’s, raising its price target to $340 from $296. The firm trimmed its estimates for the second half of 2024 but remains confident in McDonald’s momentum, particularly in the U.S. market, heading into 2025.

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Amazon: Goldman Sachs Reiterates Buy

Goldman Sachs reiterated its Buy rating on Amazon ahead of the company’s earnings later this month. The firm remains optimistic about Amazon’s long-term revenue growth and margin expansion, particularly as the company continues to invest in long-term growth initiatives.

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SM Energy: TD Cowen Upgrades to Buy

TD Cowen upgraded SM Energy from Hold to Buy, raising the price target to $60. The firm sees multiple resource catalysts for the energy company and believes the stock offers an attractive value proposition despite recent declines in commodity prices.

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Advance Auto Parts: Wedbush Upgrades to Outperform

Wedbush upgraded Advance Auto Parts from Neutral to Outperform, citing the stock’s attractive valuation and negative market sentiment as key drivers behind the upgrade. The firm believes the current market undervalues the company’s potential.

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AIG: BMO Downgrades to Market Perform

BMO downgraded AIG from Outperform to Market Perform, citing persistent pricing softness in the large-employer insurance market. The firm also lowered its earnings estimates for AIG through 2025 and 2026 due to higher underlying loss ratios in North America and international markets.

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Bruker: Barclays Initiates Overweight

Barclays initiated coverage on Bruker, a biotech solutions company, with an Overweight rating. The firm is bullish on Bruker’s recent acquisitions, which have reshaped the company’s portfolio and given it a more comprehensive approach to multi-omics research.

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Adobe: Goldman Sachs Reiterates Buy

After attending Adobe’s MAX 2024 conference, Goldman Sachs reiterated its Buy rating and set a $640 price target. The firm is confident in Adobe’s ability to innovate, particularly with AI and collaboration tools, which should drive long-term user growth and higher retention.

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Constellation Energy: Citi Initiates Neutral

Citi initiated coverage on Constellation Energy with a Neutral rating, expressing caution due to the delayed restart of the company’s Three Mile Island nuclear plant. While the free cash flow outlook has improved, Citi is concerned about potential disappointments in colocation power deals.

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