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(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.) Analyst chatter Friday included another price target increase for Nvidia and a downgrade for a major apparel maker. UBS raised its price objective on Nvidia to $1,100, which implies 20% upside from Thursday’s close. RBC, meanwhile, lowered its rating on Nike following a mixed quarterly report that included weaker-than-expected guidance. Check out the latest calls and chatter below. All times ET. 6:50 a.m.: BTIG moves to sidelines on Papa John’s as CEO exits Papa Johns can struggle with CEO Rob Lynch leaving for Shake Shack, according to BTIG. Analyst Peter Saleh downgraded the pizza chain to neutral from buy. He also removed his price target on the stock. There’s a “sudden nature of this announcement and lack of seasoned leadership at Papa John’s amid recent turnover and departures,” Saleh told clients. “We think the company could struggle for the next year, until a new leader and game plan are announced.” Thursday’s announcement that Lynch was trading pizza for burgers marks the latest in what Saleh called “a long and deep string of executive turnover” at Papa Johns in recent years. He said it could take at least several months to find a new CEO, followed by at least another six months to create and implement a growth strategy. Saleh also said the announcement was somewhat “surprising,” given mixed results from Papa Johns and what the analyst described as some “notable missteps” from Lynch. There’s still reason to be optimistic on the increase in national advertising for Papa Johns about to begin, Saleh said. But he said to remain cautious due to a rise in development costs, mistakes in international markets, the challenged environment in the United Kingdom and dull development trends. Papa Johns shares finished Thursday’s session down nearly 5% following the news. The stock has dropped more than 10% in 2024. — Alex Harring 6:32 a.m.: Arista Networks can outperform Street’s earnings predictions, Goldman says Goldman Sachs has more confidence in its better-than-consensus expectations for Arista Networks , as the artificial intelligence networking business grows. Analyst Michael Ng has a buy rating on the stock and $356 price target. Ng’s price target reflects the potential for shares to advance 16.9% over Thursday’s close. “We gain confidence in our above consensus ANET revised estimates in 2024/2025,” he told clients. Specifically, Ng expects the network equipment company to record earnings per share of $7.61 and $8.91 in 2024 and 2025, respectively. Both are above consensus forecasts of analysts on Wall Street, he noted. There’s four main reasons for that optimism: Growing capital expenditures from customers of the Cloud Titan business, including Meta, Microsoft and Oracle. It’s important because this business can support Arista’s revenue guidance. Arista’s participation in the large-scale AI Research SuperCluster by Meta, which Ng said defines a role for the company in generative AI infrastructure. The increasing use of ethernet in AI networking, as well as new data on its performance during Broadcom’s AI Infrastructure Investment Meeting. Continued increases in the shipment forecasts for AI servers. Arista Networks added about 0.5% in Friday’s premarket trading. The stock has rallied almost 30% in 2024 after nearly doubling in share value during the prior year. — Alex Harring 6:13 a.m.: Buy overlooked Banc of California, KBW says Traders should buy into Banc of California shares “before it becomes obvious,” KBW said. Analyst Christopher McGratty upgraded the regional bank to outperform from market perform. McGratty also upped his price target to $18 from $16, reflecting the potential for a 20.4% upside over Thursday’s closing level. McGratty said the bank is focused on rebuilding its share holder base following its merger agreement with PacWest. He said the stock is following a similar pattern to many deal stocks, with underperformance from deal announcement to closing giving way to outperformance after the agreement finalizes. “In many ways, 2024 is a transitional year for BANC with the integration of the PACW acquisition likely dominating the near-term narrative, in our view,” he wrote to clients. “However, we also believe investors are beginning to look to 2025 or when full synergies have been realized.” Banc of California has said it has several avenues through which it can achieve profitability targets, creating a self-help nature that McGratty appreciated. While there is a large “profitability bridge” between the fourth quarters of 2023 and 2024 as the integration of PacWest plays out, the analyst said investors shouldn’t be deterred. McGratty also noted the stock is cheap compared with peers. It also has a favorable risk-reward ratio with limited downside risk, he said. Shares have climbed more than 11% in 2024. That puts the stock on pace for its first positive year since 2021. BANC YTD mountain BANC year to date — Alex Harring 5:53 a.m.: Best Buy to rally 25%, JPMorgan says Investors should pick up shares of Best Buy as consumer trends become more constructive, JPMorgan said. Analyst Christopher Horvers upgraded his rating on the electronics retailer to overweight from neutral and raised his price target by $12 to $101. Horvers’ new target implies a 25.6% upside. “We think it makes sense to potentially be one to two quarters early on BBY given margin control/upside given computing trends could kick in during back to school (July-Sept),” he said. And that’s “with the relative valuation and margin flow-through indicating a spring-loaded stock.” Horvers listed four main reasons for his improved outlook: The wallet pull-forward in computers, TVs and appliances should be at or near its end point. Pull-forward occurs when the price of goods with long shelf lives go on promotion and consumers capitalize on the discounted price. Deflationary headwinds are expected to begin moderating in the second half of 2024, which can aid unit growth dynamics. Computing innovation can bring in products at higher price points, also helping combat deflation. The company’s margin outlook if conservative, with long-term margin expectations of 4.1% well below the levels of 4.9% pre-Covid and 6% at peak. Unlike other stocks that have experienced a pandemic pull forward, Best Buy still has a relatively cheap valuation. The price-to-earnings multiple is about 6% below historical valuations, while other cyclical names tend to be significantly higher. Best Buy shares rose nearly 2% in Friday premarket trading. But the stock has underperformed the broader market this year, adding less than 3%. — Alex Harring 5:40 a.m.: Nvidia on ‘cusp of an entirely new wave of demand,’ UBS says UBS sees more room for Nvidia to run after the artificial intelligence powerhouse’s latest conference. Analyst Timothy Arcuri hiked his price target on the chipmaker by $300 to $1,100, which now implies the stock can rally another 20.3% over Thursday’s close. He also maintained his buy rating on Nvidia, which he said has essentially created its own market and has client interest just getting started. “We believe NVDA sits on the cusp of an entirely new wave of demand from global enterprises and sovereigns – with each sovereign potentially as big as a large US cloud customer,” Arcuri wrote to clients. Following the GTC conference and announce of its new generation of chips called Blackwell , Arcuri said he now expects another solid growth year in 2025 that should bring revenue near $150 billion. That would imply growth of around 30%. NIMs, or new pre-packaged and pre-trained modular AI models, also announced can help the “distribution flywheel” for Nvidia, the analyst added. To be sure, his concerns around topics such as supply and ability to beat consensus estimates have not totally disappeared following the updates. However, he said any near-term weakness from these would just create a buying opportunity “given what we think is still out in front of us.” The upgrade comes amid a monster rally for the stock as investors play the AI craze. Shares have soared more than 80% in 2024 alone, adding to last year’s gain of almost 240%. — Alex Harring 5:40 a.m.: RBC downgrades Nike after earnings RBC lowered its rating on Nike to sector perform and trimmed its price target on the stock to $100 from $110 — in line with Thursday’s close. The downgrade comes after the apparel giant’s fiscal third-quarter report included a lackluster outlook amid slowing sales in China . “Nike’s unexpected first glance guide for 1H25E implies no revenue growth for cal 2024, which leaves little to play for in the near term,” analyst Piral Dadhania wrote. “Organisational restructuring + product transition over the next few quarters add further uncertainty and guidance risk in our view.” “We have no doubt Nike will emerge on the other side a better company in a better phase of its business cycle; however, for now we prefer to follow the momentum,” Dadhania added. Nike shares were down more than 6% in the premarket. For the year, the stock is down 7.1%. NKE YTD mountain NKE year to date — Fred Imbert
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