Analysts' Calls: UBS Downgrades Rivian, Barclays Upgrades DraftKings, Citi Optimistic on Fox

Key Takeaway

• UBS downgrades Rivian due to concerns over its profitability in the evolving electric vehicle market.
• Barclays upgrades DraftKings, citing a larger market potential and an attractive entry point after a stock pullback.
• Citi upgrades Fox to buy, optimistic about revenue and EBITDA growth from a new sports streaming joint venture.

Market Analysts' Calls

UBS on Rivian

UBS decided to sell Rivian's stock, citing concerns about the rapidly changing electric vehicle landscape impacting the company's profitability and cash flow. The firm had previously been optimistic about Rivian's products and brand but now sees challenges ahead.

Barclays on DraftKings

Barclays upgraded DraftKings to overweight from equal weight, noting a larger market potential than previously anticipated. The investment bank sees the recent pullback in the stock price as an attractive entry point, with reduced concerns over increased competition.

Citi on Fox

Citi upgraded Fox to buy from neutral, highlighting a recent deal for a sports streaming service with other media giants. The bank believes this joint venture will positively impact Fox's revenue and EBITDA estimates in the coming years.

UBS on Ross Stores

UBS upgraded Ross Stores to a neutral-rated stock from a sell, expecting a solid quarterly report. The firm sees reduced risk to Ross Stores' long-term earnings outlook due to macro headwinds fading and increased confidence in the company's market share potential.

Street Views

• UBS Analyst on Rivian (Bearish on Rivian):

  "We had been optimistic on RIVN’s product and brand ultimately winning out. But a rapidly changing EV backdrop causes us to reassess our demand view and makes RIVN’s current strategy quite onerous on the ramp to profitability and cash flow."

• Barclays Analyst on DraftKings (Bullish on DraftKings):

  "We’re less concerned than we were 3-6 months ago over increased competition, and see the ~10% pullback off the highs post its (strong) 4Q report as an attractive near-term entry point."

• Citi Analyst on Fox (Bullish on Fox):

  "Our analysis shows that the JV will be a positive for Fox ... as such, we have modestly raised our revenue and EBITDA estimates in FY25 and FY26. Beyond the benefit to estimates, we suspect the JV could be a positive for the multiple, as it places Fox on a firmer footing as it reduces exposure to the secular pressures affecting the Pay TV ecosystem."

• UBS Analysts for Ross Stores (Neutral to Bullish shift for Ross Stores):

  "We now see less risk to ROST’s long-term earnings outlook for 3 reasons: 1) Macro headwinds have faded; 2) We have more conviction in our view ROST and other Off-Price retailers will continue to take market share over Department Stores; and 3) ROST has more margin expansion potential than previously thought."

• Raymond James Analysts for Carvana (Neutral upgrade from Bearish stance towards Carvana):

  "While 4Q23 was in-line with our expectations, we are raising our 2024 adj. EBITDA forecast to reflect better-than-expected GPU trends QTD in 1Q24 (favorable wholesale/retail spreads continuing along with structural improvements in the business)."

• Guggenheim Analysts initiating Pfizer coverage (Bullish stance towards Pfizer):

  "Pfizer shares have significantly underperformed... We believe expectations for Pfizer’s COVID assets have now appropriately come down...we see an opportunity for near-term estimates to increase if management is able to successfully commercialize large potential opportunities..."

-Rosenblatt analysts initiating Adeia coverage(Bullish) :

"We view Adeia's profitability profile among best..trading at x8 NTM earnings while we see ~5% CAGR