Goldman Ups Nvidia Target, Vale Gets UBS Nod

Key Takeaway

• Goldman Sachs raises Nvidia's price target, expecting nearly 20% gains due to strong AI demand; shares already up over 86% in 2024.
• UBS upgrades Vale to buy with a 19% upside potential, citing operational performance and easing ESG concerns.
• Citi and Oppenheimer bullish on Target and Freshpet, respectively, with significant price target hikes based on earnings optimism.

Analyst Optimism on Nvidia and Vale

Goldman Sachs has increased its price target on Nvidia, anticipating nearly 20% more gains, driven by robust demand for artificial intelligence (AI). This bullish outlook is supported by analyst Toshiya Hari, who also raised his full-year earnings estimates for 2025 to 2027 by approximately 8% on average. Hari's optimism is based on intra-quarter industry data points that suggest continued strong AI server demand and improving supply. Nvidia's shares have experienced a significant rally, with more than 86% gains in 2024.

UBS has upgraded Vale from neutral to buy, citing a strong risk-reward outlook. The firm raised its price target on U.S.-listed shares to $15 from $13, implying a 19% upside. Analyst Myles Allsop highlighted Vale's operational performance and the potential moderation of key ESG concerns as factors contributing to the improved outlook. Despite concerns about medium-term iron ore fundamentals, Allsop sees upside risk to Vale's stock, which has been underperforming due to ESG worries.

Retail and Healthcare Sector Movements

Citi has upgraded Target to buy from neutral, with a reiterated price target of $180 per share, suggesting nearly 14% upside. Analyst Paul Lejuez views Target as one of the winners in the retail landscape, with opportunities to improve EBIT margin in the coming years. Target's stock has climbed more than 11% in 2024, with first-quarter earnings expected on May 22.

TD Cowen downgraded CVS Health to hold from buy, citing uncertainties in the company's outlook for 2024. Analyst Charles Rhyee lowered the price target to $59 per share from $99, foreseeing potential downside from various factors, including Medicare Advantage MLR pressure and a weaker macro environment. CVS Health's stock has seen a nearly 30% pullback in 2024.

Freshpet and Gap Earnings Expectations

Oppenheimer sees more upside for Freshpet following its earnings report, with analyst Rupesh Parikh raising the price target to $135, suggesting 11.5% upside. Freshpet's adjusted EBITDA and revenue for the first quarter exceeded expectations, showcasing the company's potential for strong EBITDA margins going forward. The scaling of its kitchen in Ennis, Texas, is also expected to drive margin growth.

Citi upgraded Gap to buy from neutral, expecting the company to beat Wall Street's first-quarter earnings estimates. Analyst Paul Lejuez increased the target price to $28 per share from $21, citing strong sales and margin flow through. Gap's product assortment alignment with consumer demand for fashion and heritage brands is seen as a key driver for its performance.

Street Views

• Mike Mayo, Wells Fargo (Bullish on Goldman Sachs):

  "The increase reflects our view that estimates are more likely to increase than decrease going forward, aided by dry powder in private equity, improved IB [investment banking] trends, excess capital, and lending."

• Rupesh Parikh, Oppenheimer (Bullish on Freshpet):

  "We believe FRPT remains a beat-and-raise story and continue to view guidance as conservative."

• Charles Rhyee, TD Cowen (Neutral on CVS Health):

  "We believe CVS’s current outlook for 2024 is uncertain as the company has multiple sources of potential downside in the near term..."

• Paul Lejuez, Citi (Bullish on Target):

  "TGT has emerged as one of the winners within the retail landscape with an opportunity to improve EBIT margin in the years to come (particularly in F24)."

• Paul Lejuez, Citi (Bullish on Gap):

  "Similar to F23, we expect both sales/earnings upside in F24 and expect a significant 1Q beat... Given Gap’s legacy in denim..."

• Stephanie Yee, JPMorgan (Bullish on UL Solutions):

  "UL is the largest TIC player in North America... Since 2011...we expect UL to continue growing within the 5-6% range from 2024-2026."

• Toshiya Hari, Goldman Sachs (Bullish on Nvidia): > "reflect intra-quarter industry data points indicative of continued robust AI server demand and improving supply.”

• Myles Allsop , UBS(** Bullish **on Vale) :> "While we remain concerned about iron ore fundamentals medium-term & see downside to spot price , we believe overall risk-reward for Vale has improved ..."