(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A media giant and a sports betting company were among the stocks being talked about by analysts on Tuesday. Goldman Sachs initiated coverage of Disney with a buy rating and a price target that implies more than 20% upside. Meanwhile, Raymond James downgraded Penn Entertainment to market perform from outperform. Elsewhere, Piper Sandler raised its price target on Uber, calling for nearly 25% upside. Check out the latest calls and chatter below. All times ET. 7:09 a.m.: UBS upgrades Cloudflare to neutral The time has come for Cloudflare to turn the tide, according to UBS. The bank upgraded shares of the cloud and cybersecurity firm to a neutral rating from sell. Analyst Roger Boyd accompanied the move by upping his 12-month price target to $82 from $76. Cloudflare has slipped 6% this year. Boyd’s new price forecast implies that the stock could gain 4% from its current level. “Following some GTM momentum, better SASE checks, the 1Q guide-down and a valuation de-rating, we think shares capture a more balanced risk/reward,” Boyd wrote. “We think growth headwinds are reflected with shares down 12% since 1Q.” Additionally, the analyst pointed to a refreshed artificial intelligence opportunity for the stock. Meanwhile, Cloudflare’s traction in enterprise security looks promising, as does its ability to compete in the secure access service edge space. — Lisa Kailai Han 6:55 a.m.: TD Cowen says Gap’s earnings growth potential is ‘underappreciated’ TD Cowen believes that Gap’s earnings growth potential looks “underappreciated.” The financial firm upgraded the retail chain to a buy rating from hold. Analyst Jonna Kim simultaneously raised her price target to $30 from $28, citing a likelihood in earnings upside. Kim’s updated price forecast implies a 21% rise for the stock. Gap has gained nearly 19% this year. As a catalyst, Kim cited “potential upside to FY24 Street estimates given solid topline momentum combined with margin expansion on continued inventory & expense management.” The analyst added that this year’s back-to-school season could be a near-term catalyst for Gap and Old Navy, with a new denim cycle positioning the brands better for the season as compared to last year. As additional strengths, Kim cited Old Navy’s improving product assortment, early signs of recovery at Athleta and Gap’s collaborations that have contributed to “driving cultural relevance.” — Lisa Kailai Han 6:27 a.m.: Citi upgrades Chinese electric vehicle manufacturer XPeng to neutral The risk-reward for XPeng has neutralized, according to Citi. The bank upgraded shares of the Chinese electric vehicle manufacturer to a neutral rating from sell. Analyst Jeff Chung simultaneously set a price target of $8.30 for the stock, implying that shares could add 5%. As one catalyst, Chung referenced XPeng’s strong product pipeline. “According to IHS, Xpeng will usher in a stronger model cycle than competitors and launch 8 products (including facelifts) in 2024-26E, with product age dropping from 24 months in 2024E to 17 months in 2025E,” he wrote. “We expect it to launch a smaller size car (MONA) as well as potential PHEV models which enhance Xpeng’s export business over the longer term.” The analyst also cited XPeng’s partnership with Volkswagen as a contributing factor to improving the former’s gross profit margin and increasing XPeng’s access to autonomous driving data. Additionally, XPeng valuation’s risk-reward now seems neutral, with Chung’s sell call having played out over the past 18 months, he noted. Shares of XPeng have slipped nearly 46% in 2024. — Lisa Kailai Han 5:57 a.m.: JPMorgan downgrades Sea to neutral The outlook for Sea could be tarnished by growing competitive pressures, according to JPMorgan. The bank downgraded shares of the Singapore-based tech firm to a neutral rating from overweight. Analyst Ranjan Sharma accompanied the move by lowering his price target to $78 from $84, which implies that shares could still add nearly 3% from here. Sea stock has rallied an eye-watering 87% in 2024. SE YTD mountain SE year to date “SE’s share price has gained 116% from its lows in Jan-24 mainly driven by positive earnings revisions within ecommerce. Incremental increases in competition are now likely to cap positive earnings revisions and share price in the near-term, in our view,” Sharma wrote. The analyst added that this increased competition mainly comes from TikTok in Indonesia and Temu in the Philippines and Malaysia. Additionally, cross-border regulation and tax increases could also place a damper on the e-commerce business. — Lisa Kailai Han 5:50 a.m.: Piper Sandler calls Uber a ‘sleeping giant,’ sees 25% upside ahead Advertising opportunities in the gig economy make Uber a “sleeping giant,” according to Piper Sandler. The firm reiterated its overweight rating on Uber and raised its price target to $88 from $86. Analyst Thomas Champion’s updated price forecast corresponds to a roughly 25% upside for the ride-hailing stock. “Like all two-sided marketplaces, Gig Economy names have a high-margin Advertising opportunity that AMZN has proven out,” Champion wrote. “But, UBER’s scale makes it a sleeping giant.” The analyst pointed out that Uber has beaten expectations for its EBITDA metrics over the last 10 quarter by 15% on average. Therefore, Champion believes that the company’s margin opportunity may still be underappreciated. He added that Uber shows the most promise when it comes to long-term advertisement opportunities. “Thinking through potential LT ad attach rates at $ scale combined, UBER appears to have the most upside potential through ’27 at an incremental $4.3BN we estimate,” Champion said. Another upcoming catalyst for the stock could be that Uber recently opened its ride ads to programmatic buying at Google Display & Video 360, Trade Desk and Yahoo DSP. This could translate to access to around $46 billion in annual ad spend, Champion noted. Shares of Uber are up nearly 15% on the year. — Lisa Kailai Han 5:41 a.m.: Goldman Sachs initiates Disney with a buy rating Disney has room for upside growth ahead, according to Goldman Sachs. The bank initiated coverage of the entertainment giant at a buy rating, setting a 12-month target price of $125. This implies that shares of Disney could rally 23% from Monday’s close. Disney has added 13% this year. “Disney is a high quality EPS compounder, which should deliver a 14% EPS CAGR (F2024E-2030E) driven by 6% revenue growth, 9% EBIT growth, and contributions from share buybacks & other income,” wrote analyst Michael Ng. “This mid-term growth is supported by its content, which is underpinned by world-class storytelling and a portfolio of long-term marquee sports rights at ESPN.” As a catalyst, the analyst referenced Disney’s direct-to-consumer platform, which he said was among the few streaming services strong enough to compete against Netflix. Content sales and licensing also hit a cyclical bottom in 2023, but profitability should return in the segment this year. Ng also cited ESPN’s direct-to-consumer initiatives and strong industry fundamentals within the cruises and theme parks verticals as additional strengths for the company. These investments — which include the launch of three new cruise ships and the Disneyland Forward expansion — could contribute around $10 billion in annual profits after completion, he added. — Lisa Kailai Han 5:41 a.m.: Raymond James downgrades Penn Entertainment It’s time to cash in on Penn Entertainment shares, according to Raymond James. Analyst RJ Milligan downgraded the casino and sports betting company to market perform from outperform. He also removed his $20 price target, which implied just 3% upside from Monday’s close. Milligan noted that recent activist pressure and M & A rumors have recently pushed shares higher, limiting further upside ahead. Indeed, the stock is up nearly 21% over the past month. “Given the path to profitability in digital still remains uncertain, and we don’t expect any dramatic shift in strategy (e.g., an outright sale of the company) in the near-term, we are recommending investors take profits and look for better risk-adjusted opportunities in the sector,” the analyst added. “We also question whether PENN would even be a willing seller in the near-term — the company has made a massive bet on its partnership with ESPN and would likely want to see how successful (or unsuccessful) they will be through the NFL season,” he said. Despite the recent gains, Penn shares are down more than 25% year to date. NVDA YTD mountain NVDA year to date — Fred Imbert
