5 Huge Analyst Calls: Tesla Slashed at Goldman; Pfizer Cut on 'Uncertainty'
Presenting the essential highlights from Wall Street analysts' insights over the past week: Tesla and Pfizer faced downward revisions, while Nvidia and Pinterest received positive upgrades. Additionally, Frontier Comms was commended with an outperform initiation.
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What occurred? On the evening of Sunday, Tesla (NASDAQ:) received a downgrade to Neutral at Goldman Sachs, which came with a $248 price objective.
What's the complete tale? Tesla is becoming monotonous and frankly quite uninteresting. Musk is allowing his self-importance to take precedence, but I digress.
On Monday morning, opportunistic resellers swiftly capitalized on the news of the downgrade that was announced on Sunday night, disseminating the information at both 4AM and 6AM. Goldman Sachs failed to astonish anyone with their explanation of the reason behind the downgrade.
...we are of the opinion that the stock currently more accurately represents our optimistic perspective on the company's ability to expand and its strong market position.
Goldman holds the view that their assessment, which is 187 times their enterprise value to free cash flow ratio for the upcoming 12 months, remains reasonably justified in some way.
The concept of being neutral at Goldman Sachs is explained as follows:
Any stock that is not marked as a Buy or a Sell on an Investment List with a current rating (for example, a stock that is not declared as Rating Suspended, Not Rated, Coverage Suspended, or Not Covered), is considered as Neutral.
What was the reaction of the stock market? The share prices of Tesla, known for their unpredictable fluctuations every day, declined in the initial premarket trading, reaching a value of $253 and then dropping to $249. However, as expected, they quickly recovered and rose again by 6AM and later 7AM - likely to deceive individual traders.
The stocks were traded all day until they reached a closing price in the range of $241. Interestingly, this turned out to be the lowest point in the entire week. However, they swiftly soared towards the end of the week and concluded at a price around $261.
What occurred? On Tuesday, Wolfe commenced a rating of Outperform on Frontier Comms (NASDAQ:) with a target price of $27.
What's the whole scoop? Wolfe is attempting to get ahead of the crowd in order to acquire Frontier Communications stocks. The company stated:
Assessment - the foundation of a multi-level structure: If Frontier decides to stop laying fiber cables, the worth of the existing fiber infrastructure is arguably equivalent to the EV ($1.2B TTM EBITDA x 11 = $13B) without taking into account the added value from future customer and pricing improvements or the potential for upgrades. The decrease in FYBR's equity value of 36% or $2.3B so far this year greatly exaggerates the pressure of building costs: a cost of $100 per home to upgrade for 5 million homes results in a loss of value of $500M. While we are concerned that costs might continue to rise, one-time increases in building costs are not as significant to return on investment as the rate of adoption and pricing.
As Wolfe also pointed out, this overly optimistic perspective relies on FYBR's ability to provide superior service to meet the ever-growing data needs of consumers.
Wolfe defines exceeding expectations as:
The safety measures are estimated to surpass the scope of coverage for analysts' industry in the upcoming year.
What was the equity's response? FYBR experienced the typical fluctuation in headlines that resulted in a $1.80 increase, reaching a high of $17. The shares concluded the day with an approximately 8% surge, reaching $17.53.
What occurred? During the night on Tuesday, Wells Fargo raised Pinterest's status to Overweight and set a price target of $34.
What is the complete account? In addition to Wells Fargo deeming a 25 times multiplier on 2024 EBITDA as legitimate, the catalyst for the change was the subsequent remarks. (Also remember that Wells is a preferred platform for professional scalpers to gradually release ratings to news agencies.)
We think Pinterest is taking a smart approach by getting help from external companies to make money and overcome issues with accurately tracking and expanding on a large scale. One of their partnerships with Amazon is set to launch by the end of 2023, just in time for the busy holiday season. They are also planning to work with other big retail advertising networks in the near future. This strategy will let Pinterest concentrate on increasing user interaction and making the overall experience better. By outsourcing their monetization efforts and seeing initial improvements in user engagement and advertising load, Pinterest should expect a significant increase in revenue and profits.
A person who is carrying excess weight at Wells is referred to as:
Anticipated stock performance for the upcoming year indicates a projected total gain of 10% or more.
What was the response of the stock market? The announcement was made shortly before midnight on Tuesday and quickly spread among traders and online forums when the market opened at 4AM. The stock price of PINS surged by approximately $1 by 5AM and maintained a steady trading value around the mid-$27 range before regular market hours. By the end of the day, PINS had increased by 6.6%, with a closing price of $28.14.
What occurred? On Thursday, Pfizer (NYSE:) was downgraded by Credit Suisse to a Neutral rating, along with a $40 target price.
What's the whole story? Credit Suisse made negative remarks, stating that the highly anticipated "catalyst" associated with these names seems to have vanished. They expressed their views by saying:
The valuation of the company looks good, but there is a period of uncertainty ahead and not many significant factors to drive growth. As a result, we have revised our estimates for earnings per share in 2023 to $3.30 from $3.32, and in 2030 to $3.09 from $3.25. Despite this, the valuation still seems reasonable compared to our peers, as our price-to-earnings ratio is 10.6x while theirs is 16.3x. Additionally, our stock offers the highest dividend yield in our industry, with a rate of 4.2% compared to our competitors' 3.0%. However, we have been disappointed that the anticipated positive changes in our pipeline and business development have not materialized this year. It will be challenging to improve investor sentiment considering the uncertainty surrounding commercial pricing in the midst of the COVID-19 pandemic, reduced business development activities, and a lack of significant catalysts on the horizon. In order for us to have confidence in management's ambitious expectations for peak sales, COVID-19 response, and flu prevention, we need to see effective execution.
Being impartial or unbiased at Credit Suisse is referred to as:
The stock is anticipated to yield a similar overall gain as compared to the appropriate benchmark within the upcoming year.
What was the response of the stock market? The stocks experienced fluctuations before the official trading session for short-term traders, and by the close of the day, the stock's value remained almost the same. If we disregard the significant trade that occurred at 4 AM, affecting the Systematic Internaliser Price due to updates in the private trading market, the stock mostly stayed within a range of $0.60 before ultimately decreasing slightly to just below $36.
What occurred? Last Friday, Daiwa improved Nvidia's (NASDAQ:) rating to Outperform, setting a price target of $475.
"What's the complete narrative? It appears that there is a growing demand for "Artificial Intelligence" these days. Daiwa recently joined the bandwagon by getting involved in the long trade of NVDA, expressing their thoughts:"
We obviously overlooked the significant surge in the stocks, but this marks the start of what we perceive as a fresh era of technology. Every corporation will surely desire not only to employ a system like ChatGPT, relying on publicly available information, but also to do the same with their own exclusive data. Graphics processing units (GPUs) play a crucial role in the training process, which can be deemed as an emerging market.
How did the stock market respond? The stock price soared by nearly 4% from $408 to $423.02 at the close of trading. There was a frenzy of buying before the market opened at 4AM in New York City, with all the professional traders opting for long-term investments.
