Wednesday’s analyst calls: Nike earnings reaction, Harley-Davidson gets a downgrade
(This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) An apparel giant and a motorcycle maker were among the stocks being talked about by analysts on Wednesday. Baird downgraded Harley-Davidson to neutral from buy. Meanwhile, several analysts on the Street reacted to Nike’s latest quarterly figures. Check out the latest calls and chatter below. All times ET. 6:43 a.m.: Barclays upgrades Diamondback Energy Diamondback Energy shares are attractive, says Barclays. The firm upgraded the oil stock to overweight from equal weight. It adjusted its price target to $210 from $216. “We believe FANG has one of the clearest positive event paths in our coverage universe in the coming quarters as the company fully integrates Endeavor,” analyst Betty Jiang wrote in a Wednesday note. The analyst referred to Diamondback Energy’s $26 billion merger agreement with Endeavor Energy Resources announced earlier this year. Jiang expects Diamondback Energy’s 2025 oil production to come in 6% above consensus expectations while releasing a more capital efficient program. “Management recently highlighted in-basin gas generation, which we believe would be a way for FANG to further reduce operating costs,” Jiang added. The stock advanced more than 3% Wednesday before the bell. Year to date, it’s up more than 14%. — Hakyung Kim 6:28 a.m.: Evercore ISI upgrades M & T Bank M & T Bank could see more upsides ahead as the Federal Reserve continues to lower interest rates, according to Evercore ISI. The firm upgraded shares to outperform from in-line. It also raised its price target to $210 from $187, suggesting shares could rise more than 17% from Tuesday’s close. Analyst John Pancari cited improving fundamentals and capital return as upside drivers of the stock. The recent Fed rate cut and soft-landing likelihood has already helped the stock outperform in recent months, he noted. Shares are up 26% in 2024. MTB YTD mountain MTB year to date “We see further outperformance as a favorable inflection in MTB’s fundamentals could support a more constructive earnings outlook. We also believe MTB’s earnings could prove more resilient than expected, helped by fixed asset repricing, funding flexibility, and EA upside,” Pancari said in a research note on Wednesday. Lower rates will also benefit the company’s commercial real estate-related loan balances, he added. — Hakyung Kim 5:58 a.m.: JPMorgan downgrades MercadoLibre JPMorgan is stepping to the sidelines on Latin American e-commerce company MercadoLibre . Analyst Marcelo Santos downgraded shares to neutral from overweight. He maintained his $2,400 price target, which implies 16.2% upside potential from Tuesday’s close. Santos sees limited gains ahead for the stock, which has already rallied 31.5% in 2024. “On one side, the company has a very promising [long-term] outlook with LatAm e-commerce still being very underpenetrated,” Santo wrote in a note on Wednesday. “On the other side, MELI is still in an investment phase, and is unlikely to meet or beat consensus estimates given increasing expenses with logistics and the ramp- up of the credit card business, which carries a structurally lower margin,” the analyst added. Foreign exchange losses are another short-term headwind for the stock, Santos noted. — Hakyung Kim 5:46 a.m.: Nike is ‘getting back in shape,’ say analysts Nike’s fiscal first-quarter results show promising signs of a new chapter for the struggling athletic wear company, according to analysts. The company posted mixed quarterly results. Although its earnings per share of 70 cents topped an LSEG consensus estimate of 52 cents per share, its revenue of $11.59 billion fell short of the $11.65 billion forecast. Nike is gearing up for new CEO Elliott Hill to take over on Oct. 14. As a result, it withdrew its guidance for the full year and pushed off its investor day. Shares slipped 5% Wednesday premarket. NKE 5D mountain NKE falls Nonetheless, some analysts on Wall Street are optimistic. Bank of America’s Lorraine Hutchinson reiterated her buy rating while trimming her price target to $100 from $104. The “next chapter begins with a clean slate,” Hutchinson wrote in a Wednesday note. “We think the fundamental reset ahead of Hill taking over as CEO later this note tempers the risk of a sales miss and gives Hill the flexibility to implement his strategy.” She cited early indications of success in its running segment as another tailwind. Deutsche Bank analyst Krisztina Katai also maintained her buy rating and inched down her price target by $3 to $92. Nike is “getting back in shape … one step at a time,” Katai said in a research note on Thursday. “NKE’s 1Q print reinforced our view that the turnaround will be a marathon, not a sprint,” Katai wrote. “This is why we are optimistic about incoming CEO Elliott Hill. He brings back much-needed institutional knowledge. … We expect a renewed focus on product, both in core and specialty running, and greater engagement with consumers as NKE rebuilds its wholesale relationships.” Meanwhile, JPMorgan analyst Matthew Boss remained on the sidelines with his neutral rating. He believes the difficult macro environment globally complicates Nike’s recovery story and highlighted elevated marketplace inventories that will require greater-than-expected promotional activity. Boss lowered his price target to $77 from $80. — Hakyung Kim 5:46 a.m.: Baird downgrades Harley-Davidson to neutral Don’t expect a major breakout from Harley-Davidson anytime soon, according to Baird. Analyst Craig Kennison downgraded the motorcycle maker to neutral from buy. He also lowered his price target on shares to $40 from $42, implying upside of just 5.2% over the next 12 months. “We contacted Harley-Davidson dealers for an update on Q3 trends. Dealers reported weak retail, excess inventory, and caustic sentiment – all of which suggest risk to guidance,” Kennison wrote. “Dealer frustration is boiling over, a dynamic that may force change. We see value in the brand, but it is best to sit this ride out as pressure builds from riders, dealers, and shareholders.” Harley-Davidson shares are up just 3.2% year to date. HOG YTD mountain HOG in 2024 — Fred Imbert
