(This is CNBC Pro’s live coverage of Friday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Friday’s early calls include an upgrade to a restaurant software stock and a big downgrade to a solar name. Baird upgraded Toast to outperform, noting there’s strong upside ahead even after the company’s disappointing third-quarter report this week. Meanwhile, Bank of America threw in the towel on FTC Solar, double downgrading it to underperform from buy. Check out the latest calls and chatter below. 6:19 a.m. ET: JPMorgan reiterates overweight rating for Netflix, lifts price target JPMorgan is standing by its overweight rating on shares of Netflix , lifting its price target to $510 from $480. Shares of the streaming company are up more than 47% in 2023. Analyst Doug Anmuth’s updated price target of $510 could mean that there’s still 17% room for the stock to go. Anmuth attributed his bullishness to Netflix’s “ability to accelerate revenue growth in 2024, expand margins, & drive multi-year FCF growth,” he wrote in a Friday note. Specifically, Anmuth highlighted paid sharing as the driver behind two straight quarters of strong subscriber growth, and anticipates Netflix to reap those benefits for several more quarters. However, he believes that the company’s focus will soon turn to “building Ad tier scale through a combination of adjustments to plans & pricing, bundles w/ISPs & devices, & strategic marketing.” “After NFLX begins targeted price increases in the US, UK, & FR in 4Q, we look for the company to expand those efforts to other markets in ’24, ultimately returning to a more regular pricing cadence,” he wrote. The analyst added that Netflix is also due to have a strong slate of content for its fourth quarter. — Lisa Kailai Han 6:12 a.m. ET: Stifel upgrades Henry Schein, highlights ‘compelling’ valuation Henry Schein has a rosy outlook ahead, according to Stifel. The firm upgraded shares of the healthcare distributor to buy from neutral. Analyst Jonathan Block’s price target of $70 signifies a 13% upside from the stock’s Thursday closing price of $62.16. Henry Schein stock has fallen 22% since the start of the year. HSIC YTD mountain HSIC in 2023 “Across a handful of metrics the stock is trading at trough valuation, and we believe several multi-year headwinds — such as the pace of practice consolidation and loss of market share to pure online providers — are abating,” Block wrote. The analyst noted that a near-term resolution to the firm’s ongoing cybersecurity incident would only have a “modest impact” on market share. “This may allow 2024 EPS estimates to look close to 2023’s current guidance (~$5.27 midpoint) and if correct, valuation appears compelling,” Block added. “In short, while 2023 results are an unknown, diligence suggests the cybersecurity impact may prove transitory, past structural headwinds are easing, and the business transformation (to higher-margin products) continues.” — Lisa Kailai Han 6:09 a.m. ET: Near-term headwinds will pressure shares of Freyr, BTIG says BTIG downgraded shares of Freyr to neutral from its previous buy rating following the company’s disastrous third-quarter earnings call. Shares of the battery manufacturer were down nearly 40% during Thursday’s trading session after the company missed its earnings estimates. Analyst Gregory Lewis explained that because Freyr still counts as a pre-revenue company, near-term stock drivers remain project execution and the ability to bring a commercial product to market. FREY 1D mountain FREY falls “The key takeaway from the call was the delay to the full commissioning of the CQP plant (came online this summer) which is critical to FREY’s ability to scale a commercial battery cell. The delay to the commissioning process is on the casting and unit cell assembly equipment which is now being targeted for sometime in 2024,” Lewis wrote. The analyst added that another hit to the company came in the form of a pause to its Giga Arctic buildout, due to a lack of funding from Norway and the European Union. The initial buildout of the battery factory had a targeted start date in 2025. — Lisa Kailai Han 5:40 a.m. ET: Stephens initiates ‘iconic brand’ Portillo’s at overweight, sees 35% upside A year-to-date sell-off makes for an attractive entry point for shares of Portillo’s , according to Stephens analyst Joshua Long. Long initiated coverage of the stock at an overweight rating, accompanied by a $20 price target. This implies nearly 35% potential upside from the stock’s Thursday close of $14.85. Shares of the fast-casual chain are down 9% since the start of the year. “PTLO shares have underperformed the market this year but held up decently given the widespread pressures facing the broader restaurant industry on account of slowing traffic trends into year-end and concerns around the resiliency of the consumer in the face of a cloudy macro backdrop,” Long wrote. “We are looking through this near-term noise towards what we believe is a compelling entry point into a high-quality growth story positioned to execute against national expansion plans.” The analyst added that while the “iconic brand” has already been generating “industry-leading sales volumes,” the company seems to be early on its growth trajectory. Long thinks that Portillo’s has the potential to grow its unit count by more than 10 times over the next several decades. — Lisa Kailai Han 5:34 a.m. ET: RBC downgrades Plug Power, cites ‘unprecedented challenges’ RBC Capital Markets downgraded shares of Plug Power to sector perform from outperform due to a series of “unprecedented challenges” that caused a shortage in third-quarter hydrogen supply. The firm accompanied the downgrade by slashing its price target to $5 from $12. That is 15% below where shares closed on Thursday. Shares were down more than 29% in the premarket. The move comes after Plug Power posted a wider-than-expected loss for the third quarter along with disappointing revenue. PLUG 1D mountain PLUG falls “Mgmt expressed confidence in executing a liquidity transaction near-term and continues to see a path for margin improvement through next year. However, at this time we think it prudent to move to the sidelines and await execution of these events and until we see more material progress on initiatives to reduce the cash burn and improve margins,” wrote analyst Chris Dendrinos. Dendrinos noted that while management expects “line of sight for relief,” this is not likely to be felt in the near term. As a result, the analyst lowered his 2023 revenue forecast to $1.05 billion and expects another quarter of negative gross margins at -15%. — Lisa Kailai Han 5:02 a.m. ET: Toast gets upgrade from Baird Baird analyst David Koning raised his rating on Toast to outperform, citing in part an attractive valuation. “We like big market share gainers … we like restaurants, we like fintech, and we like Toast at 4x 2024E revenue,” Koning said. “While the stock was a bit burnt to a crisp on Q3 earnings, we appreciate the strong growth profile.” The restaurant software stock is down more than 20% this week on the back of disappointing third-quarter results. Fourth-quarter guidance was also lackluster. TOST mountain 2023-11-03 TOST this week Still, Baird sees upside ahead. Koning has a price target of $18 per share, implying upside of nearly 30% over the next 12 months. — Fred Imbert 5:02 a.m. ET: Bank of America downgrades FTC Solar Bank of America lowered its rating on FTC Solar to underperform from buy and slashed its price target to 20 cents per share from $4. The new target implies downside of 55% from Thursday’s close. The downgrade comes after the company announced its CEO and CFO had transitioned out of their roles, which raises credibility questions for analyst Julien Dumoulin-Smith. “Lack of clarity on a revenue recovery and standing liquidity issues ($5mm available in cash drawdown at next period end) layer on real financial risk. FTC will need to renegotiate its credit facility in early 2024 which could come with less favorable terms,” Dumoulin-Smith said. FTC Solar also announced weaker-than-expected guidance for the fourth quarter on Thursday. Solar stocks have had a rough year broadly. The Invesco Solar ETF (TAN) has fallen 43% in that time. FTC Solar shares are down a whopping 83%. FTCI YTD mountain FTCI in 2023 — Fred Imbert
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