Friday’s analyst calls: Solar stock with big upside, top retail plays for 2024

Posted By: EN Todayon: December 15, 2023In: Renewable Energy News

(This is CNBC Pro’s live coverage of Friday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Friday’s analyst calls included a big solar call along with retail plays for the new year. Jefferies initiated First Solar with a buy rating and a price target that implies major upside going forward. Shares have have been on a tear this week, up more than 8%. KeyBanc, meanwhile, highlighted Walmart and Ollie’s Bargain Outlet as its top retail plays for 2024. Check out the latest calls and chatter below. 5:58 a.m. ET: Morgan Stanley remains overweight on Tesla Despite Tesla’s Autopilot software issues that prompted a recall of over 2 million vehicles, Morgan Stanley analyst Adam Jonas is staying overweight on the stock. “Tesla is still leading on edge AI that ‘moves,'” Jonas wrote in a Friday note. “In our opinion, Tesla is far more than an auto company,” he added. In addition to his overweight rating, Jonas has a $380 price target and ‘top pick’ designation on shares. His price target suggests shares could rally by more than 51% from Thursday’s close. “Our OW thesis is highly dependent upon these business lines becoming far greater drivers of earnings with clear milestones/proof-points backed by accompanying financial disclosure,” Jonas said. Her also underscored the company’s strong balance sheet and “self-funded business model.” The company will likely gain more market share as other electric vehicle competitors reduce their investments, he added. Tesla shares have more than doubled in 2023. TSLA YTD mountain TSLA in 2023 — Hakyung Kim 5:48 a.m. ET: Wall Street remains constructive on Costco Costco’s better-than-expected fiscal first-quarter results has analysts thinking it’s still a good time to own the wholesale retailer. The company posted a beat on both top and bottom lines in the prior quarter. Costco reported first quarter earnings of $3.58 per share on revenue of $57.80 billion. Analysts had expected earnings of $3.42 on revenue of $57.72 billion, according to LSEG. The company also announced it would pay shareholders a dividend payment of $15 per share. The stock is up more than 38% year to date. COST YTD mountain COST in 2023 Costco is “the gift that keeps on giving,” JPMorgan Christopher Horvers wrote in a Friday note. “We believe COST remains the most balanced way to play both offense and defense as its model particularly resonates as consumers seek value.” Horvers has an overweight rating on the stock. He notched up his price target by $8 to $660, which represents just 4.6% upside from Thursday’s close. “Santa brought a special Christmas gift,” Deutsche analyst Krisztina Katai said of Costco’s quarterly results — which she believes justifies its premium valuation. Katai has a buy rating and $695 price target on shares. UBS raised its price target to $725 from $640, representing nearly 15% upside potential. The firm also has a buy rating on shares. “At a high level, we believe COST’s 1Q provided further evidence that the stock fits well with what the market is looking for right now, a high-quality business that will be more insulated from ongoing macro pressures than the rest of the pack, by and large,” analyst Michael Lasser wrote in a Friday note. Shares were up 1.6% Friday during premarket trading. — Hakyung Kim 5:37 a.m. ET: KeyBanc names Walmart and Ollie’s Bargain Outlet its top retail picks for 2024 KeyBanc analyst Bradley Thomas thinks Walmart and Ollie’s could be big winners in the new year as the backdrop for consumers remains challenged. He named both stocks the firm’s top retail picks. “The near-term outlook for consumer spending remains at risk, with elevated interest rates, a weaker labor market, and higher living expenses (including student loan repayments) remaining overhangs on ability and intent to spend,” Thomas wrote. “We continue to watch consumer credit conditions closely, and softer housing activity will be a headwind for home-related spending in 1H. This backdrop favors WMT and OLLI.” Walmart shares are up more than 7% in 2023, lagging the S & P 500’s 22.9% gain. Ollie’s, however, has surged more than 52% this year. OLLI YTD mountain OLLI in 2023 — Fred Imbert 5:37 a.m. ET: Jefferies is bullish on First Solar “All aboard the solar coaster,” says Jefferies. The firm initiated a buy rating on First Solar , as well as a price target of $211. The price target suggests shares could jump by a third from Thursday’s close. “Solar is here to stay,” analyst Dushyant Ailani wrote in a Thursday note. “Within our coverage, our top pick is FSLR ($211 PT) as it meets our key criteria including strong backlog (sold out through ’26), supportive pricing in a declining pricing environment, strong balance sheet, gross margins (ex-45X) ramping from 18% in ’23 to 25% in ’25.” Shares jumped 2.3% Friday in the premarket after jumping nearly 8% during Thursday’s session. The stock is now up 5.6% year to date. First Solar has struggled in what has been a difficult year for renewable energy companies due to high interest rates. However, the the stock has rallied after the Federal Reserve indicated that it would cut rates in 2024 during its latest policy meeting. — Hakyung Kim