Thursday’s Analyst Calls and Wall Street Chatter
Deutsche Bank Downgrades Albemarle, Cites Pricing Uncertainty
Deutsche Bank has downgraded shares of Albemarle to a hold rating due to pricing uncertainty in the lithium industry. Analyst Corinne Blanchard believes that a cautious approach is necessary given the volatility in lithium prices. Despite expectations of a rebound in Q2, details on the magnitude of the rebound remain scant. Blanchard has adjusted the price target to $135 a share, implying less than 2% upside from Wednesday’s close. While the lithium market for Albemarle is forecasted to be adequately supplied through 2026, uncertainties persist regarding mid-cycle pricing normalization. Albemarle shares have experienced an 8% decline in early 2024 after a 33.4% drop last year.
Goldman Sachs Downgrades Lyft, Cites Balanced Risk-Reward
Goldman Sachs has downgraded Lyft to a neutral rating, citing a balanced risk-reward situation. The stock has risen nearly 35% since the last quarterly earnings report in November. Analyst Eric Sheridan remains positive about the company’s operating trajectory and expects a reacceleration in revenue growth and double-digit ride-volume growth. However, he remains cautious about execution risks, including potential contribution margin headwinds, insurance cost increases, and threats from various topline outcomes resulting from product initiatives. The firm’s price target has been increased to $15 a share, representing about 12% upside from Wednesday’s close.
Barclays Upgrades Chewy, Says “Dog Days Are Over”
Barclays has upgraded Chewy to an overweight rating, stating that the “dog days are over” for the company following a challenging period in 2023. Analyst Trevor Young expects resilient demand and a growth inflection in the second half of 2024. The bank has adjusted its price target to $30, indicating over 50% upside from Wednesday’s close. Young believes that Chewy’s stock valuation is attractive at 15 times 2025 EBITDA and sees potential for 30% EBITDA growth and upside to consensus due to high-margin advertising and the scaling of vet clinic and insurance segments. While Chewy faces competition from Amazon, Young believes it is relatively insulated from China-based Temu.
Baird Upgrades Salesforce
Baird has upgraded Salesforce to an outperform rating and raised its price target on the cloud computing giant to $300 from $240. Analyst Rob Oliver noted the company’s strong performance last year and its willingness to deliver margins. Salesforce shares nearly doubled in 2023 after a significant decline in 2022. With the current valuation near historical lows and expectations muted, Oliver sees upside potential from current levels. Factors such as price increases, potential return of front office spend, and improved sales execution should drive this upside. Salesforce shares were up 1% in the premarket on Thursday.
