Monday's analyst calls: Big Ferrari downgrade, ride-sharing stock to surge 40% from here?
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(This is CNBC Pro’s live coverage of Monday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A major car stock and a pharmaceutical giant were part of the early morning analyst chatter Monday. Citi downgraded Ferrari to sell, citing concerns around the stock’s valuation after soaring to start 2024. On a more positive note, Guggenheim upgraded GSK to buy thanks to strength across multiple product pipelines. Elsewhere, RBC upgraded Lyft to outperform, calling for a major rally ahead. Check out the latest calls and chatter below. All times ET. 6:32 a.m.: Lyft gets an upgrade to outperform by RBC Capital Markets RBC Capital Markets upgraded Lyft , citing its market share dominance and potential DoorDash partnership as a possible growth catalyst. Analyst Brad Erickson upgraded Lyft shares to outperform from sector perform, and raised his price target by $6 to $23, implying roughly 40.7% potential increase. The stock has gained more than 9% this year. LYFT YTD mountain LYFT in 2024 “Our driver supply analysis continues pointing to U.S. ride hailing being more of a stable duopoly than not,” Erickson wrote in a Monday note, adding, “we have greater confidence in 2024 EBITDA estimates with insurance and driver incentive costs adequately embedded in the model.” Improvement in Lyft’s core business allows the company to build scale and marketplace efficiency, and also gives potential partners more confidence in being a sustainable competitor in the long run, Erickson said. Uber’s size and scale should lead to outsized profitability over time, according to the analyst. Additionally, “a partnership with DASH makes enormous sense and becomes more probable, in our view, every quarter the business looks more stable relative to UBER,” Erickson wrote in the note to clients. The companies would see higher frequency member usage and incremental gross profits from a partnership, he said. Shares were up more than 5% on the call. — Pia Singh 6:10 a.m.: DoorDash upgraded by RBC on new partnerships potential, higher order growth RBC Capital Markets upgraded DoorDash to outperform from sector perform. Analyst Brad Erickson raised his price target by $45 to $175, suggesting roughly 37% potential upside. The stock has added more than 28% so far this year. “We believe New Verticals/International may be on the doorstep of stabilizing profitability, we’ve underappreciated the resilience of DASH’s order growth due largely to frequency which should continue to be a multi-year mid-to-high-teens grower,” Erickson wrote in a Monday note. “Risks remain the consumer bogeyman and slower ramp to non-restaurant verticals, but we view these as low likelihood with likely upward revisions to estimates going forward.” According to the analyst, DoorDash’s potential to establish partnerships, particularly with ridesharing service Lyft, could “drive significant incremental orders” and put its loyalty program on closer equal footing with Uber. He sees a potential scenario where DashPass subscribers would receive Lyft Pink for free included in the membership, and vice versa, helping create higher gross profit and free cash flow. DoorDash is already expanding into new delivery categories where RBC believes “cross-platform loyalty” could help the company’s growth. — Pia Singh 5:46 a.m.: Guggenheim Securities upgrades GSK to buy, citing improved growth in 2024 and beyond Investors should pick up shares of drugmaker GSK , according to Guggenheim. Analyst Seamus Fernandez upgraded shares to buy from neutral and assigned a £20.31 price target, representing 21% upside to GSK’s latest close. Such a gain would take the U.S.-listed stock to around $50. “We see continued strength in GSK’s vaccine portfolio, with a strong foundation in Shingrix and growth potential in Arexvy as we predict expansion into ages 50-59 and third season data supporting repeat dosing,” Fernandez wrote in a Monday note, saying there’s “attractive upside potential in the stock” particularly if the overhang resolves from the series of lawsuits against its GSK’s heartburn drug, Zantac. The analyst added that he expects the company to post revenue upside and maintain stable margins throughout the next few years due to strong product performance. Sales of GSK’s shingles vaccination Shingrix, respiratory syncytial virus vaccine Arexvy and multiple myeloma Blenrep treatment should maintain and potentially grow sales, he added. U.S.-listed shares of GSK are up roughly 13.4% this year and have gained more than 21% over the past 12 months. — Pia Singh 5:46 a.m.: Citi downgrades Ferrari to sell The good times are over for Ferrari , according to Citi. The bank lowered its rating on the luxury sports car maker to sell from neutral. It also raised its price target on Milan-listed shares to €329 from €308, but that new forecast still implies 16% downside. Both the Milan and U.S.-listed shares have been on fire this year, soaring more than 25%. RACE YTD mountain RACE in 2024 “We understand that in equity markets that are now more concentrated in ‘quality’ stocks than ever, Ferrari could easily run further, and we may well be wrong in our timing,” analyst Harald Hendrikse wrote. “However, after a 30% rally since December, … we see the current valuation as rich and downgrade to Sell.” U.S.-listed shares of Ferrari were down more than 2% in the premarket. — Fred Imbert
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