Analyst calls: All the market-moving chatter from Wall Street on Friday morning

Published Fri, Nov 3 20235:41 AM EDTUpdated Fri, Nov 3 20239:24 AM EDT

(This is CNBC Pro's live coverage of Thursday's analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest post.) A chunk of the Wall Street chatter Friday morning centered around Apple and its latest quarterly report. The tech giant posted fiscal third-quarter earnings that exceeded analyst expectations. However, revenue was down for a fourth straight quarter . Shares were down 3% in the premarket on the back of those results. Elsewhere on Wall Street this morning, Goldman Sachs named Monster Beverage a top pick. Check out the latest calls and chatter below. 9:15 a.m. ET: JPMorgan downgrades Fox despite strong quarter A solid quarterly report this week doesn't clear up the long-term concerns for Fox, according to JPMorgan. Analyst Philip Cusick downgraded the media stock to neutral from overweight, saying in a note to clients that the company has big-picture questions to answer despite a "solid" quarter. "We like Fox's concentrated news, sports, and broadcast strategy, which has buoyed shares vis-à-vis media peers during the industry-wide selloff of the last two years, but long-term strategic questions remain. We particularly question the lack of a wider digital strategy, as linear ecosystem subscriber losses remain elevated in the coming years and the pace of affiliate increases will fade, leaving Fox subject to a tough linear affiliate trend more similar to peers," the note said. On Thursday, Fox beat Wall Street estimates for revenue and adjusted earnings per share for its fiscal first quarter, according to StreetAccount. Shares rose about 1.6% on Thursday. JPMorgan lowered its price target on Fox to $36 per share from $40. That is 16% above where the stock closed Thursday. — Jesse Pound 9:01 a.m. ET: Investors should pick up shares of Starbucks after earnings, revenue beat, analysts say Analysts are bullish on Starbucks after the coffee maker surpassed Wall Street's expectations for its fiscal quarter on Thursday, delivering strong comparable-store sales growth and margin expansion. Bank of America analyst Sara Senatore maintained her buy rating and $121 price target on Starbucks. She cited Starbucks' new long-term growth algorithm as a revenue and earnings catalyst for the company, adding that the coffee maker has unmet customer demand, further potential to grow in the China market and additional cost savings opportunities to realize over the next three years. "Starbucks should trade at 1.5x relative to the S & P 500," Senatore said. "We believe that the multiple is justified given tailwinds as China reopens, increased investments associated with labor, operations, and unit development, as well as a return to a higher long term growth algorithm." JPMorgan analyst John Ivankoe also likes the stock, saying the company's strong fourth-quarter results were followed by an "equally solid" outlook for 2024. He maintained his overweight rating and upped his price target by $3 to $110, which indicates about 9.9% potential upside. — Pia Singh 8:37 a.m. ET: Oppenheimer says Expedia is 'arguably best bargain in travel' after earnings beat Expedia remains Oppenheimer's top online travel pick after the company delivered strong third-quarter numbers, the firm said in a Friday note. The online vacation booking company posted strong margin expansion and a quarterly profit of $425 million during the quarterly period, and also reiterated its 2023 outlook in its earnings release on Thursday. Expedia also announced a new $5 million share repurchase authorization. Analyst Jed Kelly maintained his 12 month-18 month price target of $135, which implies shares can jump roughly 42%. Shares climbed 10.4% in Friday premarket trading. "We believe the market is not properly reflecting improvements to EXPE's unified tech stack creating a more consistent earning grower, post COVID. Our base case assumes better brand cohesion and higher direct traffic mix equating to revenue/EBITDA growing," Kelly said, adding that Expedia is "arguably [the] best bargain in travel." The analyst noted that while Expedia experienced some travel disruption in early October from the war in the Middle East, global demand remains "healthy." — Pia Singh 7:56 a.m. ET: Citi upgrades Cedar Fair and Six Flags after merger announcement The deal to combine Cedar Fair and Six Flags into a theme park giant is getting a warm reception from at least one Wall Street analyst. Citi analyst James Hardiman upgraded both Six Flags and Cedar Fair to buy from neutral, saying in a note to clients that the merger should enhance the upside that already exists for both stocks. "Adding the $120M of cost synergies gets us to approximately $5.5B in equity value, or 45% upside to the current valuation, with this upside roughly evenly split between the value we see from the standalone companies and the additional value stemming from the synergies, with significantly more upside the more that we relax what we believe to be fairly-conservative profit and valuation assumptions," the note said. The initial reaction to the news was positive for Six Flags, whose shares rose 6.5% on Thursday. Shares of Cedar Fair dipped 1.4%. Both companies also reported third-quarter results on Thursday, and those showed positive trends for the theme park business, Hardiman said. "Lost in all of the merger discussion were some positive earnings takeaways from SIX and especially FUN on Thursday —Combined, the two would have beaten the Street by ~$17M on the EBITDA line (FUN +$39M; SIX -$22M) although both companies comfortably beat on the top line and the attendance line," the note said. — Jesse Pound 7:52 a.m. ET: Raymond James sees positive momentum for Regeneron Raymond James upgraded Regeneron shares to outperform from market perform following the company's third-quarter earnings announcement Thursday before the bell. Regeneron has several clinical updates in its oncology portfolio through 2024, according to analyst Dane Leone. He believes the most significant near-term catalyst could be the interim analysis of its Phase 3 trial of its treatment Dupixent in chronic obstructive pulmonary disease with evidence of type 2 inflammation. Leone set his price target at $950, which implies 16% upside potential from Thursday's close. "Our new price target represents 7x EV/ NTM sales, a premium to its large cap biotech peer group (5x), which we believe is justified given first in class opportunity for Dupixent in COPD, incremental optimism around the trajectory of the Eylea franchise, and the potential of inflecting the oncology portfolio during 2024," he wrote in a Thursday note. — Hakyung Kim 7:37 a.m. ET: KeyBanc assigns overweight rating on Uber, expects third-quarter growth to accelerate KeyBanc upgraded Uber ahead of the rideshare company's earnings scheduled for Tuesday, which it expects to come out in line with analysts' expectations. Analyst Justin Patterson rated the stock overweight with a price target of $60, suggesting shares can climb roughly 29% over the next twelve months. Shares inched up 1.2% in early Friday morning. UBER YTD mountain UBER in 2023 "We believe expense discipline at Uber should continue driving an EBITDA and FCF inflection, while advertising provides a lever to keep prices low to drive volumes," he wrote in a note. "Taken together, we are more comfortable projecting a mid-teens growth profile with a path to $7.7B in EBITDA by 2025E." Patterson said he expects Uber to deliver an acceleration of growth in the third quarter and stable margin improvement throughout 2024. He noted that Uber is still dominant in the rideshare space, maintaining the majority share of U.S. app downloads even though Lyft has grown downloads at a faster pace. Uber's multiple also has more opportunity to expand, particularly when comparing Airbnb's multiple premium despite its lower growth, he added. — Pia Singh 7:05 a.m. ET: HSBC upgrades Moderna, says shares are at a fair valuation HSBC analyst Yifeng Liu upgraded Moderna shares to hold but slashed his price target on the company, saying the stock's downside has "played out" after a disappointing earnings release. Liu's $69 price target, which is substantially lower than the previous target of $89, suggests shares can lose 3.1% from Thursday's close. "While there remains considerable uncertainty for products from the mRNA technology platform, the current share price has taken into account such risks, including weakened COVID-19 vaccine revenues," Liu said. "We think the company is now trading at a fair valuation." Moderna's total revenue topped analysts' expectations for the third quarter, but the company still reported a loss for the period after seeing demand decline for its Covid shots. Moderna also put a "softer tone" on its 2023 revenue outlook, Liu said, adding that the company now expects at least $6 billion in sales for the full year, which is $2 billion less than its previous guidance. According to the analyst, Moderna's revenue will slowly shift from being generated by Covid-19 products to instead being supported by RSV and combo vaccines. Its medium-term revenue is still being driven by its respiratory vaccines. — Pia Singh 6:50 a.m. ET: Stifel downgrades Papa John's, calls 'uncle' "OK Papa, We Call Uncle." That's what Stifel analyst Chris O'Cull wrote in his downgrade of Papa John's shares to hold from buy. O'Cull also cut his price target to $65 from $81, citing disappointing third-quarter earnings. "The company also lowered its unit opening guidance for 2023 and indicated that 2024 would be a challenging year for international development and N.A. comp growth," he said. "Our Hold thesis reflects our view that performance during the next several quarters will be volatile given the U.K. market turnaround, sales and development obstacles in key international markets, like the Middle East, and our view that the promotional activity in the U.S. QSR Pizza segment has intensified." Papa John's shares have struggled in 2023, losing 23.5%. PZZA YTD mountain PZZA in 2023 — Fred Imbert 6:11 a.m. ET: New Tesla truck poses 'threat' to global truck manufacturers Tesla's new Semi truck puts original equipment manufacturers at risk, according to Morgan Stanley. "We expect the Tesla Semi to deliver a competitive payload, creating a highly efficient, high range, fast charging, software-defined, Class 8 truck. This poses a threat to Truck OEMs worldwide," analyst Shaqeal Kirunda wrote in a note. The electric truck has both higher efficiency and longer range than incumbent OEM BEV, or battery electric vehicle, offerings, Kirunda wrote. The analyst expects Tesla to present a competitive payload in 2024 and thinks the EV maker can achieve this, as Tesla has a competitive advantage in battery production and its Semi truck is BEV native, rather than a diesel truck being transformed with an electric powertrain. Kirunda noted that delays in production and supply chain have currently limited the Semi truck to pilot phases, but that some key Tesla customers — including PepsiCo —have begun to use a small number of the trucks. Volvo, which the firm said has already made strides with its electric vehicle offerings, seems to be best protected against disruptions caused by Tesla's product. Shares of Tesla were down less than 1% in premarket trading. . — Pia Singh, Michael Bloom 5:51 a.m. ET: Here's what analysts have to say about Apple's earnings Apple reported fiscal fourth-quarter earnings after the closing bell on Thursday that beat analyst expectations for sales and earnings per share but indicated a decline in overall sales for the fourth quarter in a row. Shares dipped 3.4% in premarket trading Friday. Here's what some of the major shops on Wall Street have to say about the results: Morgan Stanley maintained its overweight rating on the stock and kept its price target of $210, noting that Thursday's results "strengthen the bull case" for investors. The firm expects Apple's average revenue per unit to increase once macroeconomic headwinds lessen. Goldman Sachs reiterated its buy rating on the stock and its 12-month price target of $227, which implies 27.8% potential upside for Apple. The bank noted that "this was a solid quarter" with gross margin strength driven by strong iPhone results and an acceleration in services revenue. Like Morgan Stanley, the firm is confident that the iPhone active installed base will compound and reach a record in the fourth quarter, in part, by expanding into emerging markets and a growing base in other Apple products. JPMorgan kept its overweight rating, but cut its price target by $5 to $225, based on its 2025 earnings estimate. The firm likes Apple's iPhone and Services revenues, tight discipline on operating expenses, its revenue growth catalysts and upside to earnings. These qualities should lead "Apple to deliver to sell-side consensus EPS expectations for F1Q24 despite a softer revenue outlook," according to the firm. Wells Fargo reiterated its overweight rating on the stock, noting Apple's strong balance sheet and free cash flow generation, as well as its growing recurring paid subscriber base. The firm, which also kept its $225 price target, said it thinks Apple's fourth-quarter results could be "largely uneventful." — Pia Singh, Michael Bloom 5:40 a.m. ET: Goldman names Monster Beverage a top pick Goldman Sachs analyst Bonnie Herzog called Monster one of the bank's top picks after the energy drink maker posted its third-quarter results. The company reported adjusted earnings per share of 41 cents, beating a StreetAccount forecast of 40 cents per share. "We continue to favor strong volume-led growth stories across the Staples universe (we model FY23/FY24 vols of +10.4%/+13.1%), with MNST being a standout. Against this backdrop, we are increasingly bullish on the stock, though maintain our FY23/FY24 EPS est of $1.54/$1.85 to be conservative," Herzog said. The analyst has a buy rating on Monster along with a $62 per share price target. That forecast implies upside of more than 17%. — Fred Imbert, Michael Bloom