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Tuesday’s analyst calls: Tesla a top pick, Costco gets a downgrade
Published Tue, Sep 10 2024•5:54 AM EDT|Updated 12 Min Ago
Hakyung Kim @in/hakyungkim/ @hakyungkim_
Fred Imbert @foimbert
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(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) An electric vehicle maker and a wholesale retailer were among the stocks being talked about by analysts on Tuesday. Deutsche Bank resumed coverage of Tesla with a buy rating, calling it a top pick. Meanwhile, Redburn Atlantic downgraded Costco to neutral from buy. Check out the latest calls and chatter below. All times ET. 6:20 a.m.: Bernstein is bullish on GE Aerospace GE Aerospace is a winner with several upside opportunities, according to Bernstein. The firm initiated coverage on GE Aerospace with an outperform rating. Its target price of $201 per share indicates 25% upside potential from where shares closed on Monday. The aviation company is “not cheap, but in a unique position for growth,” according to analyst Douglas Harned. He cited high demand but lack of supply in the commercial aviation industry as a positive backdrop for GE Aerospace. “GE is the largest player in aircraft propulsion and consistently delivers the highest margins,” Harned wrote. “Near-term, GE is set to continue benefiting from engine aftermarket demand.” To be sure, Harned cited risks such as supply chain shortfalls pressuring third-quarter results. Year to date, shares are up nearly 30%. — Hakyung Kim 5:54 a.m.: Redburn Atlantic downgrades Costco Redburn Atlantic is stepping to the sidelines on Costco . Analyst Daniela Nedialkova lowered her rating on shares to neutral from buy. She did increase her price target to $890 per share from $860, but that only implies upside of 1.5% from Monday’s close. Although Costco is a “high-quality growth compounder” thanks to its differentiated business model and growing membership base, Nedialkova thinks upside catalysts for this year have largely been price in. “While ongoing comp/market share gains should continue to drive decent earnings growth (c10% pa), the current risk-reward profile is skewing less favourably given the even higher than normal expectations priced into a starting point of 50x P/E on FY25,” the analyst wrote in a note Tuesday. “When valuation is high, there is simply less risk,” she added. Shares have surged nearly 36% year to date. COST YTD mountain COST year to date — Hakyung Kim 5:54 a.m.: Deutsche Bank names Tesla a top pick Tesla’s recent momentum is only the beginning of a strong period, according to Deutsche Bank. Analyst Edison Yu resumed coverage of the EV maker with a buy rating and a price target of $295, which implies upside of 36%. Yu also named Tesla a top pick. “At the core, we do not see Tesla as an automaker but rather a technology platform attempting to reshape multiple industries, deserving of a unique type of valuation framework,” the analyst wrote. “Near-term, automotive deliveries/margin have indeed been softer but we view this as temporary ahead of new models/refreshes coming in the pipeline. Long-term, Tesla is an emerging leader in autonomous driving (robotaxi) and humanoid robots (Optimus ... which represent some of the most clear and lucrative applications of end-to-end AI,” he added. Tesla shares are down nearly 13% year to date. However, they have soared 24% over the past three months. TSLA 3M mountain TSLA 3-mo chart — Fred Imbert
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