All the talk on Wall Street from Thursday
(Here’s CNBC Pro’s live coverage of Thursday’s analyst calls and Wall Street chatter. Refresh every 20-30 minutes to see the latest posts.) A medical device maker and a discount retailer were among the stocks being talked about by analysts. Piper Sandler initiated coverage of Abbott Laboratories with an overweight rating. Meanwhile, JPMorgan downgraded Five Below to sell from neutral. Check out the latest calls and chatter below. All times ET. 6:25 a.m.: Jefferies recommends buying NextEra Energy Partners despite acquisition concerns Jefferies was immediately bullish on NextEra Energy Partners. Analyst Julien Dumoulin-Smith initiated coverage of the Florida-based renewable energy stock with a buy rating. Dumoulin-Smith’s $28 price target suggests an 8.4% upside from Wednesday’s close. The analyst said concerns around the stock are tied to NextEra’s need to clear $3.75 billion in acquisitions related to its convertible equity portfolio financing between 2025 and 2032. That could result in a dividend cut of as much as 50%. But Dumoulin-Smith said the market has “digested” that scenario. He said the company would see a “surprisingly high” average dividend yield of 7% over that seven-year period. “We believe the market is undervaluing NEE, which is likely to drive more constructive results, and shares are trading below DCF, suggesting upside potential pending resolution,” Dumoulin-Smith told clients in a note Wednesday. NextEra Energy Partners rose more than 2% in premarket trading Thursday after the call. The stock has fallen about 15% in 2024. NEP YTD mountain NEP year to date — Alex Harring 6:19 a.m.: Barclays initiates Hertz at underweight Barclays is opening coverage on Hertz with a top concern. Analyst Dan Levy initiated the car rental stock at underweight. Levy’s $3 price target suggests the penny stock could lose 18.9% from Wednesday’s close. “HTZ is facing a challenging environment,” Levy told clients in a note Thursday. “Accordingly, we believe HTZ shares will remain under pressure for the time being.” Levy noted that Hertz is in the process of overhauling its fleet with many electric vehicles being replaced, while also reworking its systems. He said liquidity is a major concern going forward, and EBITDA and free cash flow are both under pressure right now. Hertz shares fell more than 1% in premarket trading Thursday. The stock is down more than 64% this year. Elsewhere, Barclays initiated coverage of competitor Avis with an equal weight rating. While the stock has plummeted 52% in 2024, it was up more than 5% in premarket trading Thursday. — Alex Harring 5:54 a.m.: AI helps HubSpot compete, BofA says Bank of America is keeping an eye on HubSpot’s artificial intelligence work. Following the software company’s analyst day, BofA’s Brad Sills reiterated his buy rating. Sills’ $580 price target reflects 15.1% upside potential for the stock from Wednesday’s close. Sills pointed to the announcement of Breeze, the company’s AI platform, which he said would widen the company’s competitive moat, prompting the analyst to raise his earnings per share targets for both 2025 and 2026. “HubSpot remains in ‘AI first, monetization later’ mode,” Sills wrote to clients in a note on Wednesday. But, “given the depth and breadth of its offerings, [the company] could enter monetization phase perhaps as early as H2FY25.” Shares are down more than 13% in 2024, pulling back after more than doubling last year. — Alex Harring 5:46 a.m.: JPMorgan says Five Below is a sell JPMorgan turned bearish on Five Below, citing tough challenges for the value-focused retailer in a tough year. Analyst Matthew Boss downgraded the stock to underweight from neutral to $95. While Boss raised his price target by $6 to $95, that still implies a 5.2% downside from Wednesday’s close. Boss pointed to the fact that a basket of Five Below products has seen year-over-year sales declines in all but one of the last 10 quarters. The retailer will also see headwinds to its 2025 profit margins due to labor costs as it tries to “correct” its direction. The call is unusual on Wall Street. The majority of analysts polled by LSEG have a buy rating, and none previously had a sell or underperform rating. The downgrade comes as the stock has had a rough year, down about 53%. If that performance continues, 2024 would mark the worst year in Five Below’s history. YTD mountain YTD YTD YTD YTD YTD YTD YTD YTD — Alex Harring 5:46 a.m.: Piper Sandler says Abbott Laboratories is a buy According to Piper Sandler, there’s a compelling buying opportunity in Abbott Laboratories stock. Analyst Adam Maeder initiated coverage of the medical device maker with an overweight rating. His price target of $131 implies a 14% upside. Abbott shares have lagged the broader market, rising just 4% while the S&P 500 has risen more than 17%. Maeder pointed to headwinds from lawsuits over its infant formula, which is accused of causing necrotizing enterocolitis in premature infants. Still, “with ABT trading at 22.3x consensus 2025 adjusted EPS, we see an attractive entry point into what we believe is one of the higher-quality large-cap medical technology names,” Maeder said. “We see a path to sustainable top-line growth in HSD and expect ABT to return to double-digit adjusted EPS growth in 2025 (and beyond). We combine this financial profile with a stable dividend and a solid track record in recessionary environments and ultimately we see a resilient large-cap name that is undervalued,” the analyst said. ABT YTD ABT this year so far — Fred Imbert
