(This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A delivery giant and a social media giant were among the biggest analyst calls on Wednesday. UPS was upgraded by Redburn Atlantic to buy. Meanwhile, Wells Fargo called for 20% upside for Meta Platforms and raised one of its estimates for the company’s ad sales. Check out the latest calls and chatter below. All times ET. 6:52 a.m.: Wells Fargo downgrades Wolfspeed, citing Tesla exposure as a drag on growth The weak first quarter numbers for Tesla could have a ripple effect through its supply chain, including companies with indirect exposure such as Wolfspeed , according to Wells Fargo. Analyst Gary Mobley downgraded Wolfspeed to equal weight from overweight. Wolfspeed makes silicon carbide products that are used by various types of industrial companies. One of the key sources of demand are electric vehicle companies, and particularly Tesla, which saw its deliveries drop sharply during the first quarter. “TSLA still drives ~55% of SiC mkt demand, & w/TSLA volumes possibly declining in `24, & w/o a needed offset from BYD, MB, Hyundai and/or industrial, `24 SiC demand may fall short of expectations,” Mobley said in a note to clients. Wolfspeed’s business also appears to be in weaker shape than its competitors to power through a short-term drop in demand, according to Mobley. “What makes WOLF unique in this call is the one-third of its business that comes from the SiC merchant materials supply market. … The pure exposure WOLF has to the SiC mkt & the lack of profitability also make WOLF unique in this downgrade call,” the note said. Wells Fargo cut its price target on Wolfspeed to $30 per share from $55. The new target is less than 10% above where the stock closed Tuesday. — Jesse Pound 6:35 a.m.: Guggenheim cuts Tesla price target, projects negative volume growth for 2024 Tesla’s weak first-quarter deliveries appear to be more than a one-time blip for automaker, according to Guggenheim. Analyst Ronald Jewsikow reiterated his sell rating on the stock, saying in a note to clients that the supply chain issues highlighted by the company did not explain the big drop in deliveries. “We estimate the majority of delivery downside this quarter was a function of demand, not supply. We now model negative volume growth for FY24, highlight 2Q volume comparisons are challenging and sense a strategic shift from TSLA to defend pricing (correct long-term strategy, in our view) at the expense of volumes,” the note said. Guggenheim also cut its price target on Tesla to $122 per share from $132. That is roughly 27% below where the stock closed Tuesday. The weaker demand also means that Tesla’s inventory on hand has jumped, which should trickle down into a weaker cash position for the automaker, Jewsikow said. “We estimate TSLA has 33 days of inventory on hand, well below other OEMs but a significant increase from ~16 days last 1Q and ~18 days in 4Q23. All else being equal, we believe the increase in inventory is likely to be a ~$1.8bn [free cash flow] headwind,” the note said. — Jesse Pound 6:22 a.m.: JPMorgan downgrades Ally Financial to underweight JPMorgan analyst Richard Shane is not a believer in the rally Ally Financial has enjoyed over the past six months. Shares of the lender have jumped more than 50% since early October, but that increase has largely been multiple expansion, Shane said in a note to clients where he downgraded Ally to underweight from neutral. ALLY 6M mountain ALLY in past 6 months “ALLY’s [next twelve months] P/E multiple has increased ~3x turns since Sept 2023 as investor focus shifts from near-term headwinds to the company’s 4% [net interest margin] target by mid 2025. We believe the stock fully reflects this scenario, and we see limited upside potential based on the current valuation,” the note said. JPMorgan raised its price target on Ally to $39 per share from $37. The stock closed at $39.02 per share on Tuesday. — Jesse Pound 6:07 a.m.: KBW hikes Coinbase target after crypto volumes surge, still cautious on regulatory risk Strong trading volume in cryptocurrencies during the first quarter should help support the rally that Coinbase has enjoyed so far this year, according to specialty research firm Keefe, Bruyette & Woods. Analyst Kyle Voigt hiked his price target on Coinbase to $230 per share from $160. Shares of Coinbase are already up more than 40% year to date, rallying along with the price of bitcoin. “Volumes over the past few months have continued to surge, with March [average daily volume] of $5.1 bln vs. Feb ADV at $2.4 bln. Admittedly, volumes have been extremely volatile, but we still move our base case assumptions for forward ADV higher,” Voigt said in a note to clients. The increased trading volume goes hand in hand with a growing amount of USDC, a stablecoin, on Coinbase’s platform. USDC has a high gross margin for Coinbase, according to KBW. Despite those positive trends, the new price target from KBW is still below the stock’s closing level on Tuesday of $245.84. “However, despite acute instances of regulators warming to crypto (bitcoin ETF approval), we believe COIN’s ongoing legal battle with the SEC and otherwise uncertain regulatory environment make it extremely difficult for many institutional investors to own COIN,” the note said. — Jesse Pound 5:53 a.m.: Wells Fargo sees strong first quarter for Meta ad business, 20% upside for stock The continued strength of the U.S. consumer in the opening months of 2024 should help fuel the rally for shares of Meta Platforms , according to Wells Fargo. Analyst Ken Gawrelski raised one of his estimates for Meta’s advertising business in the first quarter, saying that it should be slightly better than Wall Street expects. “We view Meta as beneficiary of healthy 1Q eComm environment,” Gawrelski said. Wells Fargo did trim its price target for Meta slightly to $600 per share from $609, based in part on 2025 estimates. The lower target is still about 20% above where the stock closed Tuesday. Long-term, Meta still has more levers to pull to ensure that it continues to grow, Gawrelski said. “[We] see sustainable multiple expansion driven by clear engagement and product catalysts to support the next leg of META share growth, as positive revision cycle driven by macro tailwinds moderates. We view WhatsApp as an under-appreciated asset w/ sizable potential, should Meta invoke more direct monetization beyond Click-to-Message ads,” the note said. — Jesse Pound 5:53 a.m.: Redburn Atlantic upgrades UPS UPS could be in for strong gains after a slow start to the year, according to Redburn Atlantic. Analyst Oliver Holmes upgraded the package delivery giant to buy, raising its price target to $180. The news forecast implies upside of 20.7% from Tuesday’s close. “We believe UPS is at, or close to, trough revenue, volume, margin and share price levels,” Holmes wrote to clients. “We see cause for positivity with key macroeconomic data sets stable, if not showing signs of improvement. This, combined with UPS’ cyclical nature, supports our expectation that volumes will turn positive in [Q2 2024].” UPS shares have lagged in 2024, losing more than 5%, while the S & P 500 is up 9% in that time. The stock climbed nearly 1% in the premarket. UPS YTD mountain UPS in 2024 — Fred Imbert
