(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 e-commerce giant out of Latin America and a solar stock were among the stocks being talked about by analysts on Tuesday. Jefferies upgraded MercadoLibre to buy and raised its price target on the stock. Meanwhile, Sunnova Energy was downgraded by Piper Sandler to neutral. Check out the latest calls and chatter below. All times ET. 7:37 a.m.: Citi sees upside for Gap with earnings looming Gap is well positioned to impress a skeptical Wall Street with its first-quarter results, according to Citi. Analyst Paul Lejuez opened a 30-day positive catalyst watch on the retail stock, saying in a note to clients that the company was likely to beat earnings estimates when it reports next week. “With sentiment more mixed on GPS recently, we believe the risk/reward is favorable into 1Q EPS,” the note said. The retailer’s updated guidance should also show that it has its costs under control, according to Lejuez. “We expect mgmt to raise implied F24 EPS guidance from $1.30-1.35 to ~$1.40+ based on stronger [gross margin] (~75bps+ vs 50bps+ prior),” the note said. — Jesse Pound 6:49 a.m.: Citi increases price target on Dell on expanding AI market share Dell is shaping up to be a strong artificial intelligence play, according to Citi Research. Asiya Merchant kept her buy rating and and hiked up her price target by $45 to $170, which suggests shares could jump 16.9% from Monday’s close. The stock has rallied 90.1% this year. Hardware stocks already outperformed the broader market year to date, the analyst noted. Merchant remains optimistic that Dell can gain further market share in AI TAM, or total addressable market, as leading original equipment manufacturers remain “well-positioned for further share gains as AI momentum gathers steam across enterprises/GPU cloud providers,” she said. Other catalysts the analyst pointed to are a slight recovery in general purpose infrastructure and demand for flash-based storage offerings, based on the increasing complexity of AI workloads. “Competitive enterprise wins should enable bullish AI projections during the earnings call and demonstrate expanding market share across a diversified customer base given its full stack Offering,” Merchant said about Dell. — Pia Singh 6:20 a.m.: Baird downgrades Toast, says risk/reward is ‘balanced’ after strong run Baird thinks Toast , a restaurant management software company, could be overvalued. Nodding to the stock’s strong recent performance, analyst David Koning downgraded Toast shares to neutral and maintained his $28 price target. That implies the stock — which has advanced roughly 27.7% this year — could gain just another 3.9%, according to Kong. “We love the story, as Toast is the fastest grower in our coverage (30%+ recurring GP growth the past several quarters), yet with the big run in recent months, we now view risk/reward as balanced,” the analyst said in a Tuesday note. Koning expects good EBITDA margin expansion and strong location growth ahead for the company, but deceleration in the coming quarters. Location growth should slow to about 20-25% by late 2024 or early 2025, compared to Toast’s 32-27% year-over-year growth in the past five quarters, he said. TOST YTD mountain Toast YTD — Pia Singh 5:59 a.m.: Morgan Stanley thinks Taiwan Semiconductor could get a boost from positive Nvidia guidance Nvidia’s upcoming quarterly report could lead to a near-term boost for chip maker Taiwan Semiconductor , according to Morgan Stanley. “TSMC is the sole supplier for NVDA AI GPU, so we view NVDA’s July-quarter revenue guidance, due on May 22, as a key catalyst. We would expect TSMC’s share price to rise if NVDA’s guidance were to beat expectations,” Chan wrote in a Monday note to clients, adding that the market views Nvidia’s July revenue guidance as a key indicator for AI server supply chain shipment strength. Morgan Stanley thinks Nvidia’s revenue guidance will likely range between $26 billion and $28 billion. According to Chain, TSMC could derive 15% of its total revenue from AI-related demand in 2024, and the stock could move up 3% as its bull scenario and up 1% as its base case. He expects to see more output of Nvidia’s AI GPU from TSMC in 2024, he added. Nvidia shares are up more than 9% this year, while TSMC has advanced 41.8%. — Pia Singh 5:47 a.m.: Piper Sandler downgrades Sunnova Energy to neutral, sees further headwinds Piper Sandler is back on the sidelines on struggling commercial and residential solar energy company Sunnova Energy . Analyst Kashy Harrison downgraded the stock to neutral from overweight and lowered his price target to $4.50 from $9, implying 8.4% upside. Shares have lost more than 72% this year. Harrison said that although he upgraded Sunnova in December on the view that declining interest rates could put solar installers in a favorable position this year, interest rates instead have remained elevated and negatively impacted the company. Sunnova’s cash burn in the fourth quarter and looming maturities have led to questions surrounding its forward trajectory, dragging the stock down. “To be positive (or negative) from here, one must possess a strong view on rates or conviction on NOVA’s ability to: i) increase proceeds from securitizations in a volatile rate environment, ii) reduce costs, and iii) address ’26 maturities in a manner that drives a favorable equity re-rate,” Harrison wrote in a Monday note. “We lack requisite conviction on the story and downgrade NOVA.” Harrison added that she was looking for a more aggressive and comprehensive strategic Update from Sunnova, perhaps on headcount reductions or shrinking to expand cash, that could assuage the market’s concerns. — Pia Singh 5:47 a.m.: Jefferies upgrades MercadoLibre to buy MercadoLibre’s strong 2024 performance is only the beginning of a strong period for the company, according to Jefferies. Analyst Alex Wright upgraded the Latin American e-commerce giant to buy from hold. He also raised his price target to $2,100 from $1,400, implying upside of about 20% over the next 12 months. “We believe MELI is now established as a clear winner in e-commerce, and should benefit from ongoing penetration upside as well as further improvements to monetisation and profitability through advertising and scale benefits in logistics for example,” Wright wrote in a note to clients Monday. The analyst also raised his 2024 and 2025 revenue estimates by 10% and 15%, respectively. Shares have been on a tear year to date, rising more than 13%. Over the past 12 months, they are up 36%. MELI YTD mountain MELI year to date — Fred Imbert
Tuesday’s analyst calls: E-commerce giant to rally 20%, solar stock gets a downgrade
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