(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 posts.) A struggling electric vehicle maker and the parent company of two combat sport leagues were in focus among Thursday’s early analyst calls. Jefferies initiated Rivian with a buy rating, calling for more than 40% upside. Elsewhere, Goldman Sachs assigned a buy rating on TKO Group, noting shares can outperform going forward. Check out the latest calls and chatter below. All times ET. 8:03 a.m.: Stifel upgrades Micron to buy, sees 26% upside Stifel believes that Micron could be boosted by a cycle recover this year. The firm upgraded shares of the semiconductor manufacturer to a buy rating from hold, simultaneously raising its price target to $120 from $80. This updated objective now implies that shares of Micron could rally 26% from here. “Broader electronics demand has yet to strengthen to the degree we hoped, however our checks confirm DRAM [dynamic random access memory] supply is tightening and on a trajectory to recover into the 90s by mid-year. Thus we see the leverage returning for Micron (est. DRAM 80%+ of profits, historically), and believe consensus estimates for CY25 are well wrong and too low,” wrote analyst Brian Chin. Chin also pointed to increasing generative artificial intelligence demand, of which Micron is a beneficiary. “Buoyed by early cyclical (+increased AI secular) appeal, we see the stock breaking out to higher highs, perhaps aided by the most compelling growth-to-valuation ratio amongst larger cap ‘AI’ relevant stocks,” he added. — Lisa Kailai Han 7:28 a.m.: Jefferies downgrades Nordstrom to hold Investors should sit tight on Nordstrom , according to Jefferies. The firm downgraded shares of the department store chain to hold from buy. Analyst Ashley Helgans accompanied this move by lowering her price target to $17 from $18, corresponding to a 3% decline. Shares of Nordstrom are down 5% on the year. The stock fell last week after Nordstrom warned of a potential revenue decline in 2024 , despite beating its fourth-quarter sales expectations. JWN YTD mountain JWN year to date While Helgans sees signs of Nordstrom’s growth stabilizing, she cautioned that the firm’s margins still disappoint. “We view current valuation as fair given current trajectory and more time needed to restore the pre-pandemic algo than we had hoped,” she wrote. “We are encouraged Rack topline has accel’d and see potential for cont’d momentum, but lack of margin recovery, Nordstrom still lagging, and inconsistent execution move us to the sidelines.” Although Nordstrom’s full-price sales have continued to disappoint, Helgans sees promise in Nordstrom Rack, the company’s off-price chain. Additionally, sales could see a boost given improvements in the designer and aspirational luxury customer, she added. “Looking longer-term, we are intrigued by JWN’s recasting of its model to balance physical/digital with higher contribution from new/alt rev streams, localize trade areas to improve cost efficiency & customer experience, and more aggressively pursue growth in Rack. Exposure to higher-income consumers should provide support during an economic downturn, but Nordstrom sales have remained challenged,” Helgans said. — Lisa Kailai Han 7:07 a.m.: Jefferies lists Pinterest as a top pick as attractive entry point emerges Now’s the time to buy Pinterest , according to Jefferies. The investment firm reiterated its buy rating on shares of Pinterest, also listing the stock as a top pick. Analyst James Heaney’s $46 price target implies that Pinterest stock could rally 33% from their Wednesday closing price. Shares of Pinterest are down nearly 7% this year, creating an attractive entry point, the analyst said. “We would be buyers of the recent stock weakness (down 4% YTD vs. COMP +9%), as our bull case scenario suggests potential for 20%+ rev growth in ’24 coming from 1) higher ad loads, 2) 3P [third-party] ad partnerships, and 3) a return to growth in ad pricing (following 15-20% declines in ’23),” Heaney wrote. PINS YTD mountain PINS year to date Ad pricing, user growth, engagement and contributions from partnerships with Amazon and Google could drive Pinterest’s revenue growth to 20% in 2024. Amazon could respectively add 4% and 7% points to Pinterest’s revenue growth in 2024 and 2025, while the firm’s partnership with Google could help it better monetize its international business. Heaney also sees “significant potential” for the firm to expand its margins next year if it can lower its operating expenses. “We believe there is ample room to gain leverage, especially given 3P partnerships have high incremental margins. If we assume PINS can achieve similar operating leverage as peers like TTD, we would expect the adj. EBITDA margin to comfortably reach the low-30s in the next couple of years (vs. current 22%),” he added. — Lisa Kailai Han 6:43 a.m.: Citi maintains hold on Tesla but sees promise ahead Things might be looking up soon for Tesla , according to Citi. The bank reiterated its hold rating for the battered electric vehicle manufacturer. A series of headwinds have sent Tesla stock sliding 29% this year, but analyst Itay Michaeli’s $224 price target implies that shares could rise 27% from here. However, the analyst noted his intention to remain on the sidelines until a more compelling entry point emerges. “Tactically, the Q1 setup looks tough with consensus still elevated (Citi < consensus) and recent datapoints suggesting Q1 will need a strong finish to hit our numbers. That said, we’ve been of the view that EV sentiment would likely not improve until spring/summer, in part on the back of new products,” he wrote. Specifically, Michaeli believes the Model 3 refresh will be a key determinant of Tesla’s sentiment in the next two seasons. Early consumer reception, taken from global site traffic patterns, already indicate an encouraging outlook. “Initial signs look encouraging with Jan/Feb funnel conversation showing solid improvement vs. 2023, albeit still lagging 2022. Bottom line: Tough to get bullish with consensus still high, but the Model 3 refresh is showing some early promise that’s worth keeping an eye on,” he added. — Lisa Kailai Han 6:33 a.m.: UBS lists Sherwin-Williams as the clear winner above competitors In a “winner takes most” scenario, there’s no doubt that Sherwin-Williams emerges on top, UBS said. The bank upgraded shares of the paint and coating manufacturer to buy from neutral. Analyst Joshua Spector accompanied this move by lifting his 12-month price target to $402 from $312. Spector’s updated price target implies that shares of Sherwin-Williams could rally 19%, adding onto the 8% the stock has already gained this year. As a catalyst, the analyst cited Sherwin-Williams’ position as the leader in the U.S. residential new build and repaint coatings market. “Combined, this makes up ~42% of SHW’s sales, with SHW ~2x larger than the next biggest competitor. While growth has been choppy over the last few years, SHW’s segment operating margins have expanded 120bps since 2019, and this includes significant reinvestment in people & stores,” he wrote. On the macro level, Spector also sees the firm in the “prime position” to capture growth from a rebound in the U.S. residential market. “In this cycle, with a higher level of investment and some market retreats from peers, we believe SHW can disproportionally win,” he wrote. “We also expect SHW to exhibit best in class pricing power.” — Lisa Kailai Han 6:17 a.m.: Here’s where the major banks stand on New York Community Bancorp Wall Street firms remain largely neutral on shares of New York Community Bancorp after Wednesday’s seesaw action. News that New York Community Bancorp was exploring a capital raise sent the stock plunging more than 40% at one point in the previous session. However, shares recovered following the regional bank’s announcement of a management shake-up and $1 billion capital raise, with the stock ending Wednesday’s trading session 7% higher. Plagued by potential loan losses on its balance sheet, shares of New York Community Bancorp have plummeted 66% this year. NYCB YTD mountain NYCB year to date “Capital raise and management change positive, but road remains foggy,” wrote Morgan Stanley analyst Manan Gosalia. “We still see a broad range of potential outcomes for NYCB, including higher funding costs, further reserve build, potential losses on their multifamily and other CRE portfolios, potential loan sales, and uncertainty about the extent to which expenses can be cut to offset revenue headwinds.” The analyst maintained his equal weight rating, although he cut his price target to $4 from $6, implying that shares could still rally 16% from here. Citi analyst Keith Horowitz likewise maintained his neutral rating on shares of New York Community Bancorp, as did JPMorgan analyst Steven Alexopoulos. “While the announced capital raise and new Board/CEO is one positive step forward for NYCB in its journey to recovery, there is more to be done including closing of the transaction. Even with shares trading at a 54% discount to peers, we stay on the sidelines with key questions around the risk and return profiles of the company still to be addressed,” Alexopoulos wrote. Horowitz similarly sees “a lot of work ahead” for the regional bank, adding that he prefers its long-term outlook over its near-term one. Horowitz’s price target of $3.50, down from $5, corresponds to just a 1% gain for the stock from here. — Lisa Kailai Han 5:52 a.m.: JPMorgan downgrades Victoria’s Secret to underweight, sees 41% downside ahead A combination of macro and micro headwinds might send Victoria’s Secret plummeting, according to JPMorgan. Analyst Matthew Boss downgraded shares of the intimates retailer to underweight from neutral. He also cut his December 2024 price target to $15 from $22, implying that the stock could plunge 41% from Wednesday’s close. Shares of Victoria’s Secret have already slid 3% this year. Boss believes one reason for further downside stems from macro challenges posed by a “challenged consumer” shifting more toward value retailers such as Amazon, as well as sportswear players like Lululemon taking market share in the sports bra category. “While VSCO is the leading market share player in US lingerie (~20% share) and women’s mass fragrance (~30% share) categories and has outlined structural cost reductions of ~ $160M over the next 2 years, top-line growth and gross profit dollars have declined sequentially tied to an increasingly cautious macroeconomic backdrop, hindering the brand’s growth and profitability profile,” the analyst wrote. On the micro level, same-store-sales trends continue to stumble, with any positive performance from November eroding by December. “Management cited no improvement in same-store-sales trends observed in February/1QTD relative to 4Q’s -6% results, despite 3 merchandising/marketing initiatives across the assortment,” Boss said. “Operating margins have eroded by ~750bps over the past 2 years, we see margins constrained about the next 12-24 months with limited visibility to a return to topline growth.” The downgrade comes after Victoria’s Secret posted mixed quarterly results, sending shares down more than 29%. — Lisa Kailai Han 5:35 a.m.: Jefferies initiates Rivian at a buy, cites competitive advantages Rivian has a leg up on its peers, according to Jefferies. The investment firm initiated coverage of the electric vehicle manufacturer at a buy rating. Although shares of Rivian have stumbled 53% this year, Jefferies’ $16 price target implies that the stock could rise 45% from here. “From the start, Rivian has been gifted more time and capital than most start-up peers to ‘do things right.’ In our view, management has indeed created a well-defined life-style brand with leading sustainability and environmental credentials as well as pioneered an EV last-mile delivery van platform,” wrote analyst Philippe Houchois. The analyst justified his price target by pointing to Rivian’s unique IP, brand equity, software stack and renovated production assets. These factors could attract public investors as well as potential outside corporate interest in the context of industry consolidation, Houchois wrote. However, he added that Rivian’s success will depend on two “critical if not existential” tests in 2024 — reducing unit variable production costs to viable levels, and demonstrating that the R2 platform can be developed at a much lower cost than the R1 model. RIVN YTD mountain RIVN year to date — Lisa Kailai Han 5:35 a.m.: Goldman says buy UFC and WWE parent TKO Group The future is looking bright for TKO Group , according to Goldman Sachs. Analyst Stephen Laszczyk initiated coverage of the UFC and WWE parent company with a buy rating and a price target of $102. That forecast implies upside of more than 28%. Laszczyk cited three reasons for his bullish outlook on the stock: “The strong secular tailwinds in the sports media & live entertainment industries,” “Execution against robust revenue & expense synergy opportunities,” “The operating leverage that is built into TKO’s relatively fixed expense structure.” “We believe that TKO Group is well-positioned, through the recent combination of the UFC and WWE, to achieve high-single-digit annualized growth in Revenue and low-double-digit annualized growth in Adjusted EBITDA,” he added. Shares of TKO Group have lagged the broader marker year to date, losing 2.8%, while the S & P 500 is up 7%. Over the past six months, the stock has fallen 20%. TKO YTD bar TKO year to date — Fred Imbert
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