[ad_1]
(This is CNBC Pro’s live coverage of Friday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Apple and a food delivery stock were among the names being talked about by analysts on Friday. Raymond James hiked its price target on Apple to $250. Meanwhile, Redburn Atlantic initiated coverage of DoorDash with a buy rating and a price target implying upside of more than 60%. Check out the latest calls and chatter below. All times ET. 7:12 a.m.: Duolingo is a buy, according to Bank of America Bank of America says Duolingo is a growth leader in its internet sector coverage. The firm raised his rating on the stock to buy from neutral while maintaining its $245 price target on shares, which suggests 45.5% upside potential from Thursday’s close price. The stock has tumbled 31% on the back of its first quarter earnings in early May. Ahead of Duolingo’s second quarter earnings announcement on Aug. 7, analyst Curtis Nagle expects the company to post revenue in-line with expectations and a slight EBITDA beat. DUOL YTD line Duolingo shares “Duolingo boasts the highest growth in our internet coverage, above average margins and in our view ample opportunity for user/revenue/EBITDA upside. We also see share buybacks as increasingly likely given high cash on the balance sheet (~10% of mkt. cap), growing cash flow, no debt and no obvious M & A beyond small ‘bolt-on’ deals,” Nagle said in a note Friday. He forecasts vast user growth opportunities for Duolingo given low penetration across all markets. Asia, particularly China, could be the company’s biggest near-to-medium user growth opportunity market, he added. “While Duolingo trades at a premium valuation, it is now below the historic average (7x ’25E EV/Sales vs. 8x) and on an EV/EBITDA basis Duolingo trades inline with other high growth subscription companies despite higher growth/margins and estimate revisions,” Nagle said. —Hakyung Kim 7:05 a.m.: Deutsche lowers rating on Southwest Airlines Deutsche Bank is stepping to the sidelines on Southwest Airlines after its disappointing second-quarter results. Analyst Michael Linenberg lowered his rating on the carrier to hold from buy. He also notched down his price target to $29 from $32, indicating 9.4% downside potential from Thursday’s close. “Despite reporting record revenues driven by record passenger volumes, Southwest continues to experience margin pressure as its revenue generation continues to lag its elevated cost structure (of which the latter is an industry-wide phenomenon),” Linenberg wrote in a note on Thursday. Southwest’s profits fell 46% in the second quarter from the same period in the prior year. Revenue per available seat mile, a gauge of airline pricing power, also dropped nearly 4%. The company made headlines Thursday when it announced sweeping changes including the elimination of open seating and adding overnight flights and seats with extra legroom. “While we are encouraged by Southwest’s plans to add assigned seats, a premium onboard product, and the launch of red-eye flights, these initiatives will take time to roll out and are not without execution risk,” he added. The U.S. market will likely stay over supplied through most of August, Linenberg said. This will put further downward pressure Southwest, which derives around 95% of its revenue from the domestic market, he added. Shares of Southwest Airlines are down 2.7% year to date but rose 0.7% in premarket trading Friday. —Hakyung Kim 6:43 a.m.: NXP Semiconductors still a buy, BofA says Bank of America is staying bullish on NXP Semiconductors even after its second-quarter earnings miss and disappointing forward outlook. Analyst Vivek Arya reiterated his buy rating on the Dutch-based chipmaker in a client note on Thursday. NXP is his top pick for its pipeline across various auto segments, such as EV battery management and auto processors. “The stock has recently come under pressure on Q3 outlook miss, but NXPI stressed the delta was to maintain a clean channel, which we believe positions the company well for the next upcycle,” Arya wrote. NXPI YTD line NXP share performance Although NXP lowered its full-year outlook, performance in the second half is forecast to improve from the first half of the year, the analyst said. Its autos segment will also likely rebound starting the third quarter on China strength, he added. The next catalyst for the stock is its analyst day on Nov. 7, where it is expected to provide its targets from 2024 to 2027, according to Arya. He has a $320 price target on shares, indicating 30% upside from Thursday’s close. —Hakyung Kim 6:15 a.m.: Bank of America reiterates buy call on Harley-Davidson after earnings Harley-Davidson is an outperformer in a difficult environment, according to Bank of America. The motorcycle company’s second quarter earnings per share and shipment topped analyst Alexander Perry’s estimates. He forecasts inventory levels to decline and for its stable retail trends to continue, particularly in the U.S. with the success of its new touring lineup. With this in mind, Perry reiterated his buy rating on shares. He also kept $50 price target on shares, which indicates 37% upside potential from Thursday’s close. “HOG continues to outperform other powersports peers in a difficult macro environment. We expect HOG’s new touring innovation to [potentially] drive a multi-year upgrade cycle from its addressable market of ~1.5mm Harley touring riders. We also see the potential cascading of new innovation into other segments including Cruisers (Softail),” Perry wrote in a Thursday note. Shares rallied more than 7% Thursday. — Hakyung Kim 5:55 a.m.: Morgan Stanley slashes outlook on WW International Morgan Stanley is losing confidence in Weight Watchers parent company WW International . The rise of obesity medication such as Ozempic and Mounjaro presents a long-term headwind on WW’s core business, according to analyst Nathan Feather. Although the company has managed to offset the threat to its core business with the growth in its clinical segment, even this has now flatlined — calling into question the company’s outlook, Feather said. The analyst downgraded shares to equal weight from overweight. He also cut his price target to $1.25 from $6.25, which was 7 cents below Thursday’s close price. “With both segments seemingly backtracking, we no longer have conviction [that] Clinic will be able to ramp fast enough to offset the headwinds on the core and move to EW as we wait for greater clarity,” Feather wrote in a Friday note. Feather also highlighted concerns in the company’s liquidity profile. WW has $1.4 million in debt, but negative free cash flow in 2024 and less than $100 million in cash, he added. Shares have plunged nearly 85% in 2024. WW YTD mountain WW year to date — Hakyung Kim 5:33 a.m.: Redburn Atlantic initiates DoorDash as a buy DoorDash is a stand-out name in the food delivery sector, according to Redburn Atlantic. Analyst James Cordwell initiated coverage on Doordash with a buy rating. His price target of $170 indicates 68% upside from Thursday’s close. Out of the four food delivery stocks in his coverage, DoorDash is the only stock he named a buy. “While consensus essentially reflects a mean reversion in trends at the different platforms, we believe the sector is more likely to be characterized by winner-takes-most dynamics, leaving our estimates for DoorDash substantially ahead of consensus,” Cordwell wrote in a Friday note. To be sure, he noted that DoorDash’s first-quarter adjusted EBITDA came in just in-line with consensus estimates, even as gross order value topped expectations. “As an immediate reaction to the results, the stock was punished given market assumptions that adjusted EBITDA margin expansion would remain the priority. However, in our view, the company is pursuing the right strategy and will, in time, be rewarded accordingly,” the analyst added. Shares are up just 1.9% in 2024. DASH YTD mountain AAPL year to date — Hakyung Kim 5:33 a.m.: Raymond James raises Apple price target Raymond James is getting more bullish on Apple ahead of earnings. Analysts Srini Pajjuri raised his price target on the iPhone maker to $250 from $200, implying upside of 15% from Thursday’s close. He also reiterated his outperform rating on shares. Pajjuri called Apple, which reports earnings next week, a “more stable AI play for volatile times.” “We do not expect near-term results to change the AI narrative … and remain optimistic that upcoming AI features will drive a multi-year iPhone upgrade cycle,” he said. “Early signs are already emerging as our conversations in the supply chain point to upward revision to iPhone 16 builds (by 5-10%) in 2H24. Supply chain data also points to material changes to iPhone 17 internals, suggesting that Apple is looking to do more AI on the device.” Apple shares are up nearly 13% for the year. In the past week, though, they are down 3% amid a broad tech sell-off. AAPL YTD mountain AAPL year to date — Fred Imbert
[ad_2]
Source link