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HomeStocks in FocusWeekly Street Calls: Procter & Gamble Upgraded, Tesla Downgraded.

Weekly Street Calls: Procter & Gamble Upgraded, Tesla Downgraded.

Weekly Street Calls

Last week, Wall Street analysts upgraded Procter & Gamble, Dollar General (NYSE:DG), UiPath (NYSE:PATH), and Thor Industries (NYSE:THO) and downgraded Tesla.

Procter & Gamble


What happened? Truist raised Procter & Gamble (NYSE:PG) to Buy with a $175 target on Monday.

The complete story?

Truist’s upgrade is based on a 25.5x FY25 EPS forecast, compared to the big cap HPC/Personal Care median and PG’s 5-year average. Analysts believe investors will focus on volume-growing Consumer Packaged Goods businesses in 2024.

Procter & Gamble’s China business comments suggest enterprise-level volume recovery in the next quarters. Truist’s buy implies the stock’s total return is expected to outperform the S&P 500 or relevant benchmark over the next 12-18 months.

How did stocks react?

The premarket upgrade lifted Procter & Gamble stock from $160.23 to $161.71. The regular session commenced at $161.43 and ended at $161.55, up 0.75%.

The Dollar General


What happened?

JPMorgan raised Dollar General to Neutral with $159 target on Tuesday.

The complete story?

JPMorgan analysts predict a 4Q EPS of $1.87, above the Street’s $1.74, and a FY24 EPS of $7.42, below $7.47. The forecast is based on management’s original FY24 comp forecast of +1.9% same-store sales and a flat to +1% buy-side bar.

The analysts’ flat Q4 comp in Q4 keeps the company’s Q3 CAGR at +4.1%, citing year-over-year same-store sales tailwinds from late December’s Winter Storm Elliott and the extra Holiday shopping day. They expect FY 2024 EPS of $7.42, led by +1.9% same-store sales, beating consensus by 1.3%. JPMorgan defines neutral as performing in line with the average total return of stocks in the Research Analyst’s coverage universe.

How did stocks react?

Dollar General stock rose 0.50 percent from $158.78 to $161.3 premarket. Regular session DG began at $161.24 and concluded at $161.22, down 1.19%.

Tesla


What happened? Wells Fargo cut Tesla to Underweight with a $125 target on Wednesday.

The complete story?

Wells Fargo has downgraded Tesla’s stock due to concerns about the price reduction’s impact on sales volume and unfavorable EPS revisions. The bank’s 2024 and 2025 EPS predictions are 32% and 52% below consensus.

Tesla’s Model 2 is struggling economically, with its stock selling at 58x the consensus ’24 EPS and 89x Wells Fargo’s projection. Tesla’s core market growth has stalled, with EU and China sales flat and US sales down since Q2. Wells Fargo expects sales volumes to remain constant in 2024 and fall in 2025 due to decreasing lease residuals, customer unhappiness, and the loss of Tesla’s luxury brand premium.

How did stocks react?

Tesla shares fell 2% from $176.94 to $174.38 premarket. Regular session TSLA began at $173.14 and finished at $169.48, down 4.54%.

UiPath:

What happened?

On Thursday, JPMorgan raised UiPath to Overweight with a $28 target.

The complete story?

JPMorgan has raised UiPath shares to Overweight (OW) from Neutral, predicting a shift from decelerating Annual Recurring Revenue (ARR) growth to steady growth as the company participates in GenAI automation initiatives and improves profitability.

The bank’s decision comes after a more positive outlook on UiPath’s recent quarters, including FQ4, and the potential end to rapid ARR growth deceleration. JPMorgan sees the low $20s share price as an opportunity for accumulation, despite flat after-market trading influenced by soft Q1 revenue guidance and the current cRPO trend.

The bank expects UiPath to outperform the average total return of the stocks in the Research Analyst’s coverage universe over the duration of the price target.


How did stocks react?

UiPath fell 6.88% from $25.22 to $22.75.

Thor Industries


What happened?

Citi raised Thor Industries (NYSE:THO) to Buy with a $122 target Friday.

The complete story?

Citi analysts predict a revival of the RV industry after a recent slump and market correction. They predict a better outlook in April or May, which could encourage dealers to order, stabilize OEM guidance, and boost the company’s stock value.

Citi also initiated a 90-day upside catalyst watch, anticipating an improvement in the RV market in April-May after 32 months of losses. This expected rebound could inspire dealers to raise orders, OEMs to provide guidance, and investors to re-engage with THO’s story, potentially boosting market prices.

How did stocks react?

Thor ended the regular session at $103.81, up 2.86% from $103.30.

Analysts Make Big Moves in AI Sector

Here are this week’s top AI analyst movements.

Wedbush upgrades Nvidia PT to $1,000 before GTC.

Wedbush equities analyst Matt Bryson has raised Nvidia’s target price from $850 to $1,000 before the GTC. He believes the news flow and Oracle’s recent statements about strong cloud service demand and capital spending estimates for Q1 and Q2 2025 will boost NVDA’s stock. Bryson expects Nvidia’s new Blackwell architecture to outperform Hopper, which he claims outperformed the A100 by 9X in training and 30X in inference.

Goldman: AI bubble not yet.
Goldman Sachs analysts have raised their long-term growth rate projection for AI in the U.S. stock market to 11%, despite the surge in AI leaders like NVDA. The top ten Technology, Media, and Telecom (TMT) firms’ predicted third-year profits growth is 15%, slightly above the S&P 500’s median but below March 2000’s 24% or October 2021’s 18%. The largest 10 TMT stocks are valued at 28x, lower than the Tech Bubble peak and late 2021’s 43x.

Citi releases investors’ top and worst AI stocks.
Citi Research analysts have revealed that investors have expressed their preferences for AI stocks, with popular stocks being Nvidia, AMD, Broadcom, equipment firms, and NXP Semiconductors, while least liked were Micron Technology, ON Semiconductor, and Microchip Technology.

The analysts also raised concerns about whether AI is a bubble and how long semi stocks can sustain these valuations. They believe 2024 will replicate 1999, and they have strengthened their top selection Micron, while also addressing investor fears about an AI bubble potentially lasting into 2025.

BofA raises Super Micro PT amid AI server growth.
Bank of America analysts have increased Super Micro’s price objective from $1,040 to $1,280 due to growing AI server sector revenues. They believe SMCI’s competitive strength lies in its building block design, which accelerates technology integration and time to market. SMCI’s connections with Intel, Nvidia, and AMD are also emphasized. Key benefits for the AI server maker include liquid cooling systems and customization options.

Citi launches PureStorage at Buy
Citi Research analysts have given a Buy rating and $65 target to Pure Storage, citing its position as a “leading beneficiary of AI-induced transition to flash-based storage.”

The move comes amid concerns over Meta’s shift from externally supplied storage hardware to in-house hardware. Pure Storage’s reasonable cost relative to SSD and HDD choices and recent AI-related wins make it in a good position. The company is in the fastest-growing external storage market sector.

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