Monday's analyst calls: Cloud stock to rally nearly 30%, Covid vaccine maker gets downgrade
(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.) Analysts kicked off the week on Monday with high hopes for a cloud name and a downbeat outlook for a biotech stock. Morgan Stanley upgraded HashiCorp, citing an improving cloud market backdrop. On a more negative note, HSBC lowered its rating on Moderna to reduce, citing headwinds around the company’s cancer vaccine pipeline. Check out the latest calls and chatter below. All times ET. 5:56 a.m.: Jefferies raises Salesforce price target ahead of earnings Salesforce is an attractive buy for the long run, according to Jefferies. “Our CRM survey indicates a modest improvement in demand. Our checks indicate manufacturing and tech verticals are rebounding while public sector demand remains strong,” analyst Brent Thill said. He upped his price target by $25 to $350, implying roughly 19.5% upside for the company, which will report fiscal fourth-quarter results on Wednesday. Thill expects high-single-digit future subscription revenue growth for Salesforce in the near to medium-term, lending to an “attractive” risk-reward setup for the stock. Marginal improvement in customer plans to adopt artificial intelligence also lend to Jefferies’ investment thesis. Salesforce has the “second easiest comps of the year” in the fourth quarter, Thill said, adding that the company’s focus on driving top-line growth and higher margins will lead to higher valuation for shares over time. He forecasted 11% top-line growth, in line with Wall Street’s expectations, for fiscal year 2024. The stock, which has jumped more than 80% over the past year, added about 0.3% before the bell on Monday. — Pia Singh 5:52 a.m.: HashiCorp could benefit from resurgence in cloud migration projects, Morgan Stanley says Improvement in the cloud demand environment could bode well for HashiCorp’s top line, according to Morgan Stanley. Analyst Sanjit Singh upgraded the software company to overweight from equal weight and raised his price target by $7 to $30, which suggests more than 27% upside for the stock. “A resurgence in cloud initiatives is translating to better demand for HCP after a difficult year thus far,” Singh said, noting HashiCorp’s services in automating cloud infrastructure positioning and security. “While LT debates around monetization and competition have yet to be resolved, we think risk-reward now skews attractive given an improving cloud demand backdrop.” The firm expects cRPO bookings to bottom in the fourth quarter and improve throughout fiscal year 2025, which it said should lead to 20% revenue growth in fiscal year 2026 and beyond. A company’s cRPO, or current remaining performance obligations, refers to revenue in the upcoming 12 months. HashiCorp shares jumped about 6% in premarket trading. The stock is down roughly 6% this year. HCP YTD mountain HCP in 2024 — Pia Singh 5:52 a.m.: HSBC downgrades Moderna The outlook is not promising for Moderna , according to HSBC. The bank lowered its rating on the Covid-19 vaccine maker to reduce from hold. It also raised its price target to $86 from $75, but the new forecast still implies downside of more than 13% going forward. “Besides the COVID-19 vaccine outlook, Moderna’s personalised cancer vaccine programme … has been at the centre of debate regarding the company’s prospects,” analyst Yifeng Liu wrote. “Although two Phase 3 studies have kicked off in adjuvant melanoma and adjuvant NSCLC (in collaboration with Merck & Co.), the patient recruitment update should guide market’s confidence as data updates are not likely to be available in near term, given the relatively low event rate for these indications,” the analyst added. Moderna shares have gotten off to a sluggish start for the year, losing 3%. To be sure, the stock rallied more than 9% last week on the back of a surprise quarterly profit. MRNA YTD mountain MRNA year to date — Fred Imbert
