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Equities

Analyst Calls: Buy on Apple, Nike; Mixed on Tech, Consumer Sectors

Wall Street adjusts ratings on tech and consumer sectors, with key calls on Nvidia, Apple, and Rivian amidst market shifts.

By Alex P. Chase

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5/8, 08:38 EDT
Apple Inc.
Datadog, Inc.
Hexcel Corporation
International Flavors & Fragrances, Inc.
Micron Technology, Inc.
Nike, Inc.
Nutanix, Inc.
NVIDIA Corporation
Old Dominion Freight Line, Inc.
Ferrari N.V.
Rivian Automotive, Inc.
Block, Inc.
ZoomInfo Technologies Inc.
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Key Takeaway

  • Bank of America reiterates buy on Apple, highlighting AI advancements; Morgan Stanley remains bullish on Nike, citing an overblown market reaction.
  • Baird upgrades Datadog to outperform, advising to buy the dip; Rivian retains buy rating despite profitability concerns.
  • Analysts show mixed reactions to tech and consumer sectors, with upgrades for potential growth and downgrades due to performance concerns.

Wall Street's Latest Moves

Wall Street analysts have made several significant calls, affecting a wide range of sectors from technology to consumer goods and energy. Wells Fargo upgraded Hexcel Corporation, citing less risk related to the 737 MAX and potential upside to numbers. Baird shifted its stance on Old Dominion to outperform, following a positive earnings report. Meanwhile, Bank of America maintained its buy rating on Apple, impressed by the innovation in its latest iPad event, particularly the advancements in AI functionality enabled by the new M4 chip.

In the realm of sports and leisure, Morgan Stanley reiterated its overweight rating on Nike, suggesting that the market's negative reaction to its shares is overblown. Citi continues to see Reddit as a buy, anticipating growth from its advertising capabilities. Barclays remains optimistic about Disney, downplaying concerns about its theme park income growth. Rivian retains a buy rating from Bank of America despite recent earnings revealing challenges, while Rosenblatt downgrades Nasdaq due to a need for business model adjustments.

Analysts' Perspectives on Tech and Consumer Sectors

The technology and consumer sectors have seen a flurry of activity, with upgrades and downgrades reflecting analysts' assessments of future performance. JPMorgan upgraded International Flavors, seeing potential upside in the coming year. Baird upgraded Datadog to outperform, advising investors to buy the dip. Raymond James turned bullish on Nutanix, citing opportunities for the company to gain market share. Morgan Stanley upgraded Energizer, noting improving business fundamentals.

Conversely, Roth MKM downgraded Shoals Technologies following its earnings report, and Goldman Sachs downgraded ZoomInfo, pointing to weakening trends. Barclays downgraded Victoria’s Secret, concerned about sustained negative comps and market share loss. Deutsche Bank shifted its view on Boston Beer to hold, citing valuation and less pessimism about the company's profit and loss management.

Rivian and Datadog: A Closer Look

Rivian's recent earnings have sparked mixed reactions from analysts, with some maintaining a cautious stance due to the competitive EV market and concerns over profitability. Goldman Sachs and Barclays highlighted the uncertainty surrounding Rivian's cost reduction efforts and the challenges of achieving positive gross profit. Baird, however, sees an opportunity in Datadog, upgrading the stock to outperform after a significant sell-off, highlighting the company's leading position in cloud-native observability.

Street Views

  • Wells Fargo on Hexcel Corporation (Bullish on Hexcel Corporation):

    "We are upgrading HXL to Overweight as we see upside to numbers, less 737 MAX risk vs peers and a stock unfairly punished for its CEO transition."

  • Baird on Old Dominion (Bullish on Old Dominion):

    "Upgrading ODFL to Outperform, remain opportunistic buyers."

  • Bank of America on Apple (Bullish on Apple):

    "Beyond the impressive hardware, what we liked includes: 1) Apple continues to innovate on its own silicon 2) advanced Neural Engine in the M4 chip will allow for AI enabled functionality like isolating subjects from their background in 4-K video using Apple’s Final Cut Pro, and detecting documents and using AI to rearrange frames and remove shadows in an image..."

  • Morgan Stanley on Nike (Bullish on Nike):

    "NKE has gained the most share in the global sportswear category of any brand in our analysis on both a y/y & vs. ’19 basis."

  • Citi on Reddit (Bullish on Reddit):

    "And as Reddit builds out its ad stack, we look for Search (1B+ monthly queries) and video monetization to potentially begin in ’24, creating a medium-term catalyst for growth."

  • Barclays reiterates Disney as overweight:

    "We believe concerns with respect to theme park operating income growth are overdone and misses some of the nuances behind the guidance framework."

  • Bank of America reiterates Rivian as buy:

    "RIVN still in right place/time with right product/strategy."

  • Rosenblatt downgrades Nasdaq:> "Further, market data revenue is likely to remain pressured by the aforementioned market share loss and tighter regulation... Broadly, the flywheel is in need of some repair.”

  • JPMorgan upgrades International Flavors:> "We rate IFF Overweight for year-ahead performance.”

  • Baird upgrades Datadog:> "Buyers [should be]on weakness...we are raising our rating from Neutral to Outperform.”

  • Raymond James upgrades Nutanix:> "We have gained a better appreciation for Nutanix’s opportunity...Broadcom’s efforts...will lead some customers to seek alternatives from Nutanix.”

  • Morgan Stanley upgrades Energizer:> "Upgrade...as Valuation Looks Reasonable After Stock Underperformance and Fundamentals Should Improve From Here.”

  • Roth MKM downgrades Shoals:> "SHLS delivered a mixed Q1, weak Q2 outlook and lowered its recently issued 2024 guide.”

  • Goldman Sachs downgrades ZoomInfo :> "We downgrade ZI ...and lower our PT. Weakening trends”

  • Barclays downgrades Victoria's Secret :> We downgrade shares ...based [on] expectation[s]of sustained negative comps through 2024; YTD elevated promotions persist despite cleaner inventory; margin[EPS risk coupled with valuation multiple contraction.

Deutsche Bank upgrades Boston Beer :> [Due]to valuation.“However,...less pessimistic about SAM’s ability...

Bank of America reiterates Nvidia/Micron :> Broadly speaking beneficiaries[of AI PC adoption include INTC], AMD..., NVDA...

Stephens upgrades Redfin :> We are upgrading shares[of RDFN...]raising our PT.

Barclays reiterates Block : > We see SQ’s inclusion[in S&P500...]a potential catalyst.

UBS reiterates Ferrari : Defensive equity story[Reiterate Buy].